VARA In-Principle Approval (IPA): What It Allows and What It Does Not
Last updated: 3 November 2026
Key takeaways:
- An In-Principle Approval (IPA) from VARA is a milestone, not a licence.
- IPA holders are strictly prohibited from initiating operations, conducting any virtual asset activities or servicing clients until they have obtained their full licence.
- VARA’s Marketing Regulations apply to IPA holders in full, so until the licence is issued, a company should not call itself “VARA licensed”, onboard UAE residents or run campaigns aimed at UAE users.
- The IPA period is for preparation: incorporation, hiring, systems, capital, insurance and closing VARA’s conditions.
- Older VARA press releases describe a different regime in which some companies could operate while licensing. The current IPA allows no operations at all.
VARA’s public register has two tabs: one for licensed virtual asset service providers and one for companies holding In-Principle Approval (IPA). For a founder, getting onto the second list feels like crossing the finish line, and some announce it as “licensed by VARA” the same day. That is a mistake, and in Dubai it can be an expensive one. An IPA is a milestone, not a licence.
Where the IPA sits in the process
VARA’s licensing process has two stages.In the first, the applicant submits VARA’s Initial Disclosure Questionnaire on VARA Connect, VARA’s online portal, pays the initial fees, half of the application fee, and receives an Approval to Incorporate (ATI). In the second, it submits the full licence application, goes through VARA’s review, pays the rest of the fees and the first year’s supervision fee, and receives its licence, which may carry operational conditions.
On its register, VARA describes the IPA as “a conditional step in the licensing process”, issued so that applicants can complete the final requirements needed to secure a licence.
What an IPA allows
An IPA lets a company prepare for launch: complete incorporation, hire the required staff, build and test its systems, put capital and insurance in place, and close the conditions VARA has set.This is not a waiting room. VARA gives the company a set period to complete these preparatory steps, and an IPA is not a status it can hold indefinitely.
What an IPA does not allow
VARA is direct about this: applicants holding an IPA are strictly prohibited from initiating operations, conducting any virtual asset activities or servicing clients until they have obtained their full licence. This follows from the general rule that no one may carry out a virtual asset activity in Dubai by way of business, or purport to do so, without a VARA licence.
Marketing is restricted too. Under VARA’s Marketing Regulations, marketing of a virtual asset activity in or targeting the UAE may be carried out only by a VARA-licensed company or on its behalf with its approval. Unlicensed companies may promote virtual assets only within a narrow exemption: they may not let UAE residents sign up or onboard as clients, and must show a prominent disclaimer that they are not licensed by VARA. VARA’s guidance limits this exemption to physical events in Dubai. An IPA holder is not licensed, so these restrictions apply to it in full.
In our view, three common practices therefore carry real risk before the licence: calling the company “VARA licensed” or “VARA approved” without qualification, opening a waiting list or pre-registration for UAE residents, and running campaigns aimed at UAE users that promote the coming service.
Why old press releases confuse founders
In 2022 and 2023, VARA used a different regime with provisional approvals and preparatory and operational licences under a minimum viable product approach. Under that regime, some companies were allowed to keep operating while they completed licensing. Founders who read those announcements sometimes assume that the IPA works the same way. It does not: the current IPA allows no operations at all.
Where the term comes from
“In-principle approval” is a familiar term in the UAE’s financial free zones. In Abu Dhabi Global Market, the Financial Services Regulatory Authority issues an IPA with pre-conditions, including obtaining a commercial licence, and grants permission to carry on regulated activities only after they are met. In the Dubai International Financial Centre, the regulator has publicly stated that approval in principle does not give a firm any regulated status. VARA’s IPA follows the same logic.
How long does an IPA last?
VARA does not publish a standard validity period for the IPA or the ATI: the time allowed to complete the remaining requirements is set for each applicant.It reserves wide discretion over licensing and may grant a licence for a specified period or subject it to conditions. Companies should therefore plan to close the remaining requirements quickly rather than assume the IPA will wait for them.
The cost of getting it wrong
In October 2025, VARA fined nineteen firms between AED 100,000 and AED 600,000 for unlicensed activity and breaches of its Marketing Regulations, and ordered them to stop operating. For a company with an IPA, a premature launch can cost not only a fine but the licence it was about to receive.
What we recommend
- Describe your status accurately: “has received In-Principle Approval from VARA and is completing the licensing process”, not “licensed”.
- Do not onboard clients, open waiting lists for UAE residents or run user campaigns until the licence is issued.
- Use the IPA period to close every condition: staff, systems, capital, insurance and policies.
- Budget for the remaining application fee and the first year’s supervision fee, which are due before the licence.
The bottom line
An IPA tells the market that VARA is prepared to license you, provided you finish the job. It does not let you start the business. Companies that keep that distinction clear move from IPA to licence faster and without fines. AMLzone can help you close the remaining requirements and prepare your launch communications so that they stay within VARA’s rules.
Sources
1. VARA, “Public Register”. https://www.vara.ae/en/licenses-and-register/public-register/
2. VARA, “Licence Applications”. https://www.vara.ae/en/licenses-and-register/licence-applications/
3. VARA, “Public Register”. https://www.vara.ae/en/licenses-and-register/public-register/
4. VARA, “Public Register”. https://www.vara.ae/en/licenses-and-register/public-register/
5. VARA, Virtual Assets and Related Activities Regulations 2023, Regulation III.A.1. https://rulebooks.vara.ae/rulebook/general-prohibition-and-exemptions
6. VARA, Marketing Regulations 2024, Regulations I.B.3 and I.F.1. https://rulebooks.vara.ae/sites/default/files/en_net_file_store/VARA_EN_419_VER1.pdf
7. VARA, Marketing Regulations Guidance. https://rulebooks.vara.ae/entiresection/418
8. VARA, “BitOasis becomes the first Broker-Dealer to secure MVP Operational Licence from Dubai’s Virtual Asset Regulatory Authority”, 1 May 2023. https://www.vara.ae/en/news/bitoasis-becomes-the-first-broker-dealer-to-secure-mvp-operational-licence-from-dubais-virtual-asset-regulatory-authority/
9. ADGM FSRA, “General Application Process”. https://www.adgm.com/financial-services-regulatory-authority/fsra-general-application-process
10. DFSA, “Clarification on regulatory status of Polynome Group”, 14 June 2024. https://www.dfsa.ae/alerts/clarification-regulatory-status-polynome-group
11. VARA, “Licence Applications”; VARA, Virtual Assets and Related Activities Regulations 2023, Regulation IV.B.1. https://www.vara.ae/en/licenses-and-register/licence-applications/
12. VARA, “VARA Steps Up Enforcement to Safeguard Dubai’s Virtual Asset Market: 19 Unlicensed Firms Penalised and Public Warning Issued”, 7 October 2025. https://www.vara.ae/en/regulations/regulatory-notices/vara-steps-up-enforcement-to-safeguard-dubai-s-virtual-asset-market-19-unlicensed-firms-penalised-and-public-warning-issued/
03.11.2026
