Frequently Asked Questions

Please refer to the register of licensed firms published on VARA’s website.

VARA’s licensing framework has been established to regulate and supervise Virtual Asset Service Providers [VASP] in furtherance of VARA’s aim to foster consumer protection and prevent illicit finance. This framework consists of compulsory rulebooks and the activity-based rulebooks set out below.

1. Various Licence categories are available based on the activity that the VASP intends to offer the market, noting that each activity is ‘discrete’ and hence must be applied for explicitly, based on the requirements for each as stipulated by VARA:

• - VA Advisory Services
• - VA Broker-Dealer Service
• - VA Custody Service
• - VA Exchange Services
• - VA Lending and Borrowing Services
• - VA Management and Investment Services
• - VA Transfer and Settlement Services

2. Additionally, issuers of Virtual Assets will have to obtain approval from VARA under the VA Issuance Rulebook.

3. Key Notes:
No VA activity is ‘exempt’ from regulatory supervision; as such any VA service or activity requires a VARA licence, registration or No Objection Certificate [NOC].

• VA Proprietary Trading will require a VARA NOC to confirm that the VA activity may be undertaken with regulatory oversight without a VA Licence. Additionally, proprietary trading above certain trading volumes is an activity that must be registered with VARA; 
• DLT [Distributed Ledger Technology] service providers that are carrying out any VA activity falling within the categories described above require a VARA Licence; DLT service providers that do not currently offer any VA activities may voluntarily register themselves with VARA, should they so choose – to have the option of catering for VA activities in the future.

Applications for a Virtual Asset Service Provider Licence are now being accepted, and you can initiate the process by contacting the DET [Mainland], or any FZA [Free Zone] in the emirate of Dubai [excluding the Dubai International Financial Centre]. VARA will be available to provide clarifications on the licensing process and licensed activities. Note that submission of applications or any documents must be made through the relevant commercial licensor [either DET or FZA].

Any entity wishing to carry out regulated Virtual Asset activities and services in or from the emirate of Dubai must apply for a Virtual Asset Service Provider Licence.

Please refer to the Licence Applications page on our website.

VASPs can provide services to retail customers upon approval of a Virtual Asset Service Provider Licence. At VARA’s discretion, certain VASPs may be approved to only provide services to Qualified Investors and institutional clients.

There are no nationality restrictions on persons submitting a VARA license application. Note that the application has to be made on behalf of a legal entity established with DET or a Free Zone [excluding DIFC].

1. VASPs need to ensure that their Senior Management team comprises suitably qualified individuals and that they appoint two ‘Responsible Individuals’ [RIs].
2. Each Responsible Individual shall be a full-time employee of the VASP; a Fit and Proper Person; a resident of the UAE or a holder of a UAE passport. Fit and Proper Persons must be approved by VARA.

A Limited Liability Company [LLC] or FZ CO is preferable for this sector. Applications from sole proprietorships will not be accepted by VARA.

1. The VA licence is an annual licence.
2. The renewal is for 12 months.
3. Renewal notification will be issued 90 days in advance.
4. An annual supervision fee is required to be paid at the time of renewal.

Please refer to the Licence Applications page on our website.

VARA requires VASPs to have a physical presence in Dubai to conduct VA activities from Dubai.

The VA activities set out below require a private office to conduct business:

• -VA Broker-Dealer Services
• -VA Custody Services
• -VA Exchange Services
• -VA Lending and Borrowing Services
• -VA Management and Investment Services
• -VA Transfer and Settlement Services

There is no minimum size/space requirement from VARA. VASPs should check space requirements with their respective commercial licensors [DET/FZ] based on their staffing needs.

Details of VARA’s Licensing and Supervision fees can be found in Schedule 2 of the Virtual Assets and Related Activities Regulations 2023.

Details of VARA’s Capital and Prudential Requirements can be found in Part VI of the Company Rulebook.

1. Enforcement actions will include Cease and Desist Orders, Reprimands, Warnings, Fines and Penalties [e.g. licence suspensions, or scope of service or market limitations].
2. VARA will supervise the virtual assets market in the emirate via on-chain and off-chain methods to ensure compliance with VARA’s Regulations and Rulebooks. Failure to comply may result in substantial punitive measures which could include material fines and penalties [including potential entity closure].
3. All relevant actions are coordinated with relevant government and commercial licensing bodies. More information about VARA’s fines and enforcement can be found at Regulations and Guidelines page of our website.

Entities will be required to hold a VARA Licence or Acknowledgment of Application Notice [AAN] if they carry out any of the following VA activities, namely:

• -VA Advisory Services
• -VA Broker-Dealer Services
• -VA Custody Services
• -VA Exchange Services
• -VA Lending and Borrowing Services
• -VA Management and Investment Services
• -VA Transfer and Settlement Services

AAN’s are issued to firms carrying on VA activities in the emirate of Dubai [excluding DIFC] prior to 7 February 2023.

Entities that issue Virtual Assets [for example, new token releases, or minting of NFTs] must seek approval from VARA regarding the issuance of the Virtual Asset as described in the VA Issuance Rulebook. Such entities should also determine if any of their activities relating to the Virtual Assets fall within the categories of VA Activities described above.

No VA activity is ‘exempt’ from regulatory supervision; as such any VA service or activity requires a VARA license, registration, or No Objection Certificate [NOC].

1. VA Proprietary Trading will require a VARA NOC to confirm that the VA activity may be undertaken with regulatory oversight without a VA Licence. Additionally, proprietary trading above certain trading volumes is an activity that must be registered with VARA;

DLT [Distributed Ledger Technology] service providers that are carrying out any VA activity falling within the categories described above require a VARA Licence; DLT service providers that do not currently offer any VA activities may voluntarily register themselves with VARA, should they so choose – to have the option of catering for VA activities in the future.

1. Proprietary Traders that trade their own funds and are not trading it as a service to friends-family and/or third-party mass market – i.e. no clients - are not required to hold a VARA Licence at this time. Proprietary trading does not include VA activities where using own funds to buy/ sell VAs with a third party at the initiation of the third party.
2. Proprietary Traders by the aforementioned definition - regardless of whether it is being undertaken as a business, are required to register with VARA, and will be subject to regulatory oversight.

Distributed Ledger Technology [DLT] Service Providers are required to hold a VARA Licence if they are providing or carrying out any of the below-mentioned VA activities:

• -VA Advisory Services
• -VA Broker-Dealer Services
• -VA Custody Services
• -VA Exchange Services
• -VA Lending and Borrowing Services
• -VA Management and Investment Services
• -VA Transfer and Settlement Services

1. This is a broad sector and it is critical to understand exactly which services are being undertaken to respond more comprehensively;
2. At the first instance, entities offering Metaverse services are generally not required to hold a VARA licence at this time.
3. If any such entities are conducting VA activities regulated by VARA in and/or from Dubai [excluding DIFC] then a VARA Virtual Asset Service Provider Licence will be required.

Entities that possess NFT Marketplace Commercial Licences with Free Zones must obtain a VA Exchange Licence and/or a VA Broker-Dealer Licence from VARA, depending on the exact activities of the marketplace.

You may apply for an activity amendment through the Department of Economy and Tourism [Mainland], or any Free Zone except DIFC.

There is a two-stage process.

• Stage 1 – Initial Disclosure Questionnaire [IDQ] – VASPs are required to fill an IDQ with DET or an FZA, which will be screened by the commercial licensing bodies, then transferred to VARA for assessment.
  1. Based on the assessment, VASPs may be rejected or additional information may be requested
  2. Eligible VASP’s will receive an Application Acknowledgement Notice [AAN].
  3. The VASP is then required to satisfy detailed licensing requirements as set out by VARA based on the VA activity the VASP proposes to carry out.
• Stage 2 – Upon completion of such requirements, the VASP will or will not be issued a Virtual Asset Service Provider Licence.

VASPs may be rejected if they are unable to fulfill VARA licensing requirements.

Please refer to the Licence Applications page on our website.

VASPs that receive an AAN must complete the full VA license application and ensure submission by 31.August.2023.

Please refer to the Licence Applications page on our website.

Renewal of Commercial licences for existing legacy firms that have received an AAN [with no change in the VA activity applied for] does not need VARA’s approval.

Amendment of commercial licences [change of name/ UBO/ address] of existing legacy VASPs requires VARA’s approval. VARA will issue an amended AAN to the VASP, as required.

Change of a VA Activity requires VARA review. A new IDQ will need to be submitted.

Withdrawal of Commercial licenses requires DET or the Free Zone Authority to notify VARA.

1. VARA will withdraw its AAN.
2. VARA will assess customer impact.
3. VASP will be required to return funds/ marketing update//fulfill its financial commitments.

VARA will withdraw the AAN for any entity that cannot fulfill Virtual Asset Service Provider Licence requirements.

VARA can withdraw the AAN in certain scenarios including but not limited to:

1. VASPs not fulfilling Virtual Asset Service Provider Licence requirements;
2. VASPs conducting illicit activity; or
3. VASPs not falling under VARA’s regulatory regime.

1. All event organisers are required to apply for events permits in Dubai [excluding DIFC] through the e-Permit system of the Department of Economy and Tourism.
2. You may apply for a VA event permit through the e-Permit system, by selecting the category [VA event].
3. You will be required to confirm your adherence to VARA’s Marketing Regulations and Guidelines:
   • ADMINISTRATIVE ORDER NO. 01/2022: REGULATORY GUIDELINES ON MARKETING, ADVERTISING AND PROMOTIONS RELATED TO VIRTUAL ASSETS
   • ADMINISTRATIVE ORDER NO. 02/2022: PENALTIES FOR NON-COMPLIANCE
4. You should ensure that all exhibitors and sponsors are aware of VARA’s Marketing Regulations and Guidelines.
5. VARA reminds all concerned parties to confirm their adherence to the VARA’s Marketing Regulations and Guidelines on the e-Permit system of the Dubai Government.

Failure to comply with VARA’s Marketing Regulations and Guidelines may result in substantial punitive measures including material fines/penalties and potential entity closure.

1. For such advertising, you are required to apply through the central government advertising system managed by Dubai Municipality.
2. You may apply for a permit by selecting the category [Virtual Asset Activity].
3. You will be required to confirm your adherence to VARA’s Marketing Regulations and Guidelines:
   • • ADMINISTRATIVE ORDER NO. 01/2022: REGULATORY GUIDELINES ON MARKETING, ADVERTISING AND PROMOTIONS RELATED TO VIRTUAL ASSETS
     • ADMINISTRATIVE ORDER NO. 02/2022: PENALTIES FOR NON-COMPLIANCE
4. VARA reminds all concerned parties to confirm their adherence to the VARA’s Marketing Regulations and Guidelines on the content approval system of the Dubai Government.

Failure to comply with VARA’s Marketing Regulations and Guidelines may result in substantial punitive measures including material fines/penalties and potential entity closure.

VASPs that are not licensed by VARA may still conduct marketing activities in or from Dubai provided the relevant marketing permit is obtained. Note that unlicensed VASPs are not permitted to onboard Dubai residents as customers and any marketing material must have disclosures clearly indicating that such products or services are not available for residents of Dubai.