Understanding VARA and Its Role
The Virtual Assets Regulatory Authority (VARA) is Dubai’s independent regulator for virtual assets and related activities. It oversees all of Dubai’s mainland and free zones (except DIFC) and is responsible for creating, enforcing, and supervising the regulatory framework that governs digital assets.
In practice, VARA’s mandate includes:

• Developing regulations and rulebooks for virtual asset service providers (VASPs)
• Reviewing and approving license applications
• Supervising licensed entities and their ongoing compliance
• Enforcing AML/CFT, cybersecurity, and conduct standards

At AMLzone, our team continuously monitors updates to VARA’s rulebooks to ensure that our clients always remain ahead of new requirements and expectations.


Who Needs a VARA License
Any company providing virtual asset services in or from Dubai—whether on the mainland or within a free zone (excluding DIFC)—must obtain a VARA license before launching operations.
The main categories of businesses that fall under VARA’s scope include:

• Exchanges: spot, derivative, or order-book platforms
• Broker-Dealers: intermediaries executing or matching client trades
• Custodians: entities safeguarding client digital assets
• Lending and Borrowing Platforms
• Investment Managers and Advisors
• Transfer and Settlement Providers

Even companies focused on proprietary trading (trading their own capital) may require a No-Objection Certificate (NOC) from VARA, depending on the size and nature of their activities.
AMLzone assists clients in defining their activity perimeter precisely, preventing misclassification and delays during the review process.


VARA License Categories
VARA organizes the market into several regulated activity types. You may apply for one or multiple licenses depending on your business model.
Advisory Services — Providing advice on buying, selling, or investing in Virtual Assets, including market analysis and portfolio recommendations.
Broker-Dealer Services — Acting as an intermediary by soliciting or executing client orders related to virtual assets, whether on behalf of others or for proprietary trading.
Custody Services — Safekeeping and managing clients’ virtual assets in segregated wallets or accounts, ensuring asset protection and regulatory compliance.
Exchange Services — Operating a digital platform or matching engine that allows users to trade, swap, or exchange virtual assets.
Lending and Borrowing Services — Facilitating loans, collateralized borrowing, or yield-based products using virtual assets as collateral or funding source.
Virtual Asset Management and Investment Services — Managing virtual asset portfolios, funds, or collective investment schemes on behalf of clients.
Transfer and Settlement Services — Enabling the transfer, clearing, or settlement of transactions involving virtual assets.
Virtual Asset Issuance (Category 1) — Issuing or creating specific virtual assets in line with VARA’s defined rules and disclosure requirements.

Each category has a dedicated rulebook, along with four mandatory rulebooks that apply to all VASPs.
AMLzone helps clients identify the right combination of licenses and prepares tailored documentation to meet each rulebook’s expectations.


What VARA Looks for in an Application
VARA’s licensing assessment covers your legal, financial, governance, risk management, and technology setup. Key elements include:
1. Legal Structure
You must incorporate in Dubai (mainland or eligible free zone). Custody services must be housed in a separate licensed entity. AMLzone works with corporate formation partners to ensure your structure aligns with VARA’s standards.
2. Capital Requirements
Paid-up capital thresholds depend on the activity type—for example, AED 100,000 for Advisory and up to AED 1.5 million for Exchange Services. VARA also requires firms to maintain Net Liquid Assets and Reserve Assets.
AMLzone helps clients calculate capital levels accurately and set up internal reporting for ongoing compliance.
3. AML/KYC and Risk Management
You must implement a full AML/CFT program aligned with VARA’s Compliance & Risk Management Rulebook, covering customer due diligence, transaction monitoring, sanctions screening, and blockchain analytics.
AMLzone designs and deploys these frameworks, integrating both on-chain and off-chain monitoring systems.
4. Technology and Security Controls
Firms must comply with the Technology & Information Rulebook, ensuring robust cybersecurity, data protection, and secure development practices. AMLzone’s experts assist in creating technical documentation, incident-response procedures, and governance policies aligned with UAE’s Personal Data Protection Law (PDPL).
5. “Fit and Proper” Management
Directors and Responsible Individuals must demonstrate integrity, competence, and relevant experience. VARA requires at least two full-time Responsible Individuals who are UAE residents or passport holders.


Step-by-Step Licensing Process
The VARA licensing journey unfolds in two main stages:
Stage 1 – Approval to Incorporate (ATI)

1. Submit an Initial Disclosure Questionnaire (IDQ) via Dubai Economy & Tourism or your chosen free zone authority.
2. Provide your business plan, ownership details, and initial compliance framework.
3. Pay the preliminary application fee (typically 50%).
4. Once approved, you may complete legal incorporation and begin operational setup.

Note: ATI does not authorize you to operate yet.

Stage 2 – Full VARA License

1. Submit a comprehensive application pack (governance, AML, technology, financials).
2. Participate in interviews or clarification sessions with VARA.
3. Pay the remaining license and supervision fees.
4. Receive your full VASP License and commence operations under ongoing supervision.

AML ZONE manages the entire process, from document preparation and submission to regulator engagement, ensuring clarity and efficiency at every step.


Documentation Checklist
While each application is unique, typical documentation includes:

• Certificate of incorporation and corporate structure chart
• Ultimate Beneficial Owner (UBO) disclosures
• Fit and proper declarations for directors and key persons
• Governance and compliance policies
• AML/CFT and sanctions screening procedures
• Technology and cybersecurity framework
• Financial projections and capital evidence
• Insurance and wind-down plan

AML ZONE provides a customized document matrix, mapping every VARA rulebook requirement to the exact control or policy in your organization.


Ongoing Compliance After Licensing
Obtaining a license is only the beginning. VARA requires all licensed entities to maintain continuous compliance with capital, reporting, and operational standards.
Key obligations include:

• Maintaining minimum Paid-Up Capital and liquidity levels
• Performing daily reserve reconciliations
• Submitting monthly and quarterly compliance reports
• Undergoing regular audits (financial, reserve, cybersecurity)
• Updating AML/KYC systems and staff training programs

AMLzone offers outsourced compliance support and RegTech integration to help licensed firms meet these ongoing obligations efficiently.


Fees, Capital, and TimelinesApplication Fees
Depending on your activity type:

• Advisory Services: AED 40,000 (application), AED 80,000 (annual supervision)
• Exchange / Broker / Custody: AED 100,000 (application), AED 200,000 (annual supervision)
• Transfer & Settlement: AED 40,000 (application), AED 80,000 (annual supervision)

Capital Thresholds

• Advisory: AED 100,000
• Broker-Dealer: AED 400,000–600,000
• Custody: AED 600,000
• Exchange: AED 800,000–1,500,000
• Lending / Investment / Settlement: AED 280,000–500,000

Timelines
Typically, Stage 1 takes several weeks, while Stage 2 can take several months, depending on the business model’s complexity and the completeness of the submission.
AMLzone ensures your application is fully compliant and strategically structured, reducing review times and minimizing back-and-forth with VARA.


Common Pitfalls—and How AML ZONE Assist You Avoid Them

1. Unclear business model: We help define your activity perimeter and map it to the right VARA license.
2. Incomplete documentation: AMLzone prepares a complete, regulator-ready submission package.
3. Weak AML framework: Our specialists implement crypto-specific AML solutions with risk scoring and blockchain analytics.
4. Technology gaps: We build or review your cybersecurity and data governance documentation.

Capital miscalculations: AML ZONE ensures accurate financial modeling aligned with VARA thresholds.


Why Choose AMLzone for VARA Licensing

• Proven Experience: Our consultants specialize in virtual asset regulation, AML frameworks, and risk management.
• End-to-End Support: From scoping and incorporation to license approval and ongoing compliance.
• RegTech Integration: Access to AML ZONE’S vetted partners for KYC, blockchain analytics, and transaction monitoring.
• Local Expertise, Global Standards: We align your operations with UAE’s framework and international FATF guidelines.

Final Thoughts
Dubai’s Virtual Asset Regulatory Authority offers one of the world’s most structured and transparent frameworks for digital-asset businesses. Achieving a VARA license is not merely a regulatory formality—it’s a mark of trust, stability, and credibility.
At AML ZONE, we view licensing not as a hurdle but as a foundation for sustainable growth. Whether you’re an emerging startup or an established fintech, our experts help you navigate every phase—preparation, submission, and ongoing compliance—so you can focus on scaling your business with confidence