VARA Licence in Dubai: Activities, Process and Fees (2026)

A VARA licence is the Virtual Asset Service Provider (VASP) licence that Dubai's Virtual Assets Regulatory Authority requires before any firm can carry on virtual asset activities in or from Dubai, outside the DIFC financial free zone. It is activity-based: you apply for one or more of eight regulated activities, such as exchange, broker-dealer or custody services, pay a fixed application fee and an annual supervision fee for each, and go through a two-stage process that starts with an Approval to Incorporate.

This guide covers the eight activities, the two-stage process, the official fees and capital minimums with a worked example, timelines, and where the DIFC, ADGM and UAE Central Bank rules fit, as checked on 17 October 2026.

What is VARA and who needs a licence?

VARA was established in March 2022 under Dubai Law No. 4 of 2022. According to VARA's own description, it regulates virtual assets "in all zones across the Emirate of Dubai, including Special Development Zones and Free Zones but excluding the Dubai International Financial Centre". Its detailed rules sit in the Virtual Assets and Related Activities Regulations 2023 and a set of rulebooks.

The obligation is broad. VARA's licence applications page says any firm "seeking to carry on Virtual Asset activities in or from Dubai [excluding DIFC] has a legal obligation to be licensed by VARA prior to commencing operations". Its licensed activities page adds that this applies whether the customers are Dubai residents or global customers, and that "No virtual asset activity is 'exempt' from regulatory supervision".

If you are new to the terminology, our explainer on what a VASP is covers the global definition that VARA builds on.

The eight VARA licensed activities

VARA licenses eight distinct activities. A firm can bundle several under one licence, with one important exception described below.

• Advisory Services: personal recommendations to a client about virtual asset transactions.
• Broker-Dealer Services: arranging, executing or dealing in virtual assets for clients.
• Custody Services: holding virtual assets or keys on behalf of clients.
• Exchange Services: operating a trading venue that matches orders.
• Lending and Borrowing Services.
• VA Management and Investment Services.
• VA Transfer and Settlement Services.
• VA Issuance Category 1: the higher-risk token issuance category.

Three structural rules from the licensed activities page shape most business plans:

• Custody must stand alone. Custody Services is "the only regulated activity that is required to be segregated from other Virtual Asset Services licence categories". A custodian must be a distinct legal entity with a standalone licence.
• No proprietary trading inside the licensed entity. Licensed VASPs may not trade their own or their group's assets under the regulated licence; a separate company is needed, and that company needs a No Objection Certificate from VARA.
• Category 2 issuance is lighter. Token issuances that are not Category 1 use a separate approval form and whitepaper process rather than a full licence. Anonymity-enhanced tokens are prohibited.

The VARA licensing process, step by step

VARA describes a two-stage process for new firms. Applications are made through Dubai Economy and Tourism (DET) for mainland companies, or through a Dubai free zone authority, not directly to VARA.

Stage 1: Approval to Incorporate

1. Submit an Initial Disclosure Questionnaire (IDQ) to DET or the relevant free zone.
2. Provide supporting documents, including a business plan and details of beneficial owners and senior management.
3. Pay the initial fee to start the review, which VARA says is "typically 50% of the licence application fee".
4. Receive an Approval to Incorporate (ATI), which lets you form the legal entity, rent an office and hire staff.

VARA is explicit that at this point "the firm is not permitted to carry on Virtual Asset activities".

Stage 2: the VASP licence

1. Prepare and submit the full documentation VARA requests after the ATI.
2. Respond to feedback, which may include meetings, interviews and further documents.
3. Pay the remaining application fee and the first year's supervision fee.
4. Receive the VASP licence, which may come with operational conditions.

The documentation list is long. It includes ultimate beneficial owner details, fit-and-proper confirmations, source-of-funds evidence, a regulatory business plan, financial projections, proof of paid-up capital, insurance certificates, a succession plan and a wind-down plan, plus risk, compliance and technology documentation.

All applicants must comply with VARA's four compulsory rulebooks plus the rulebook for each activity they are licensed for. VARA published Version 2.0 of its activity rulebooks in May 2025, tightening controls on margin trading and token distribution, with full compliance required by 19 June 2025.

VARA licence cost: fees and capital

VARA's fees are set in Schedule 2 of its rulebook. There is a one-off licence application fee for the first activity, a licence extension fee for each additional activity, and an annual supervision fee for every licensed activity, payable in advance.

The capital column comes from Rule VI.B of the Company Rulebook. Each figure is a floor: the actual requirement is the higher of that amount or 25% of fixed annual overheads (15% where a VARA-licensed custodian is used). Capital is required per activity and must be reconciled monthly. The extension fee for each extra activity is 50% of the lower application fee.

VARA may also add supervision fees based on a firm's risk profile.

Worked example: a spot exchange

Take a new exchange that uses a separate VARA-licensed custodian and adds broker-dealer services:

• Application fees: AED 100,000 (exchange) + AED 50,000 extension (50% of the lower AED 100,000 fee) = AED 150,000.
• First-year supervision: AED 200,000 + AED 200,000 = AED 400,000.
• Paid-up capital floors: AED 800,000 + AED 400,000 = AED 1,200,000, or more if 15% of each activity's fixed overheads is higher.

That is AED 550,000 in fees to VARA in year one, roughly US$150,000 at the dirham's fixed peg of 3.6725 to the dollar. It excludes trade-licence fees from DET or the free zone, office space, staff, audits, insurance, legal advice and technology. For how this compares with Europe, see our CASP licence cost guide.

How long does a VARA licence take?

VARA's licence applications page does not state a processing time, and any fixed number quoted by consultants should be treated as an estimate. The main drivers are within the applicant's control:

• Completeness of the Stage 2 file. Every round of VARA feedback adds time.
• Number of activities. Each one brings its own rulebook and its own controls to evidence.
• Staffing. Key personnel CVs and job descriptions are part of the file, so hiring delays become licensing delays.
• Custody design. Building a separate custody entity, or contracting a VARA-licensed custodian, has to be settled early because it changes both capital and documentation.

Firms that operated in Dubai before 7 February 2023 had a separate Legacy Operating Permit route, valid for 12 months, with up to 50% off licensing fees and reduced capital, as described on the same page.

AML, KYC and the Travel Rule under VARA

Every licensee must follow VARA's four compulsory rulebooks: Company, Compliance and Risk Management, Technology and Information, and Market Conduct, as summarised by CMS. The application file also requires risk and compliance documentation alongside the business plan. In practice that means a written AML/CFT risk assessment, customer due diligence, transaction monitoring, sanctions screening and, for transfers between VASPs, Travel Rule data exchange in line with FATF standards.

Most applicants buy rather than build the onboarding layer. Identity verification vendors such as iDenfy handle document and liveness checks, but the licensed firm still owns the risk assessment and every decision made on a customer. Our AML compliance guide for exchanges and VASPs and the Travel Rule explainer cover these controls in detail.

DIFC, ADGM and federal UAE rules

DIFC: the DFSA

The Dubai International Financial Centre is outside VARA's remit. Its regulator, the Dubai Financial Services Authority, runs its own crypto token regime. Since 12 January 2026, the DFSA no longer publishes a central list of recognised crypto tokens; firms must document their own suitability assessment for each token, while fiat-backed stablecoins still need explicit DFSA recognition.

ADGM: the FSRA

Abu Dhabi Global Market has had its own virtual asset framework, run by the Financial Services Regulatory Authority, since 2018. Like the DIFC, it is a financial free zone with its own licences.

Federal: the UAE Central Bank

Two federal layers sit on top of any emirate-level licence:

• Payment Token Services Regulation. Published by the Central Bank of the UAE in June 2024 as Circular No. 2/2024, it licenses dirham stablecoin issuers and registers foreign ones. Merchants in the UAE may accept a foreign stablecoin only as payment for virtual assets, not for ordinary goods and services. Algorithmic stablecoins and privacy tokens are banned, and the rules apply to VARA-licensed firms too. The DIFC and ADGM are outside its licensing scope.
• The new Central Bank Law. Federal Decree-Law No. 6 of 2025 came into force on 16 September 2025. Its Article 62 says the use of a technology or business model does not by itself take an activity outside the Central Bank's perimeter, and expressly covers DeFi, platforms and decentralised applications that facilitate financial services. The one-year reconciliation period ran to 15 September 2026, with no general extension announced as of that firm's review.

For a side-by-side view with the EU, Singapore and others, read our CASP licence jurisdictions comparison.

Frequently asked questions

What is a VARA licence?

It is the Virtual Asset Service Provider licence issued by Dubai's Virtual Assets Regulatory Authority. Any firm carrying on virtual asset activities in or from Dubai, except inside the DIFC, must hold one before it starts operating.

How much does a VARA licence cost?

Under VARA's Schedule 2, the application fee is AED 100,000 for most activities and AED 40,000 for advisory or transfer and settlement, with an annual supervision fee of AED 200,000 or AED 80,000 per activity. Paid-up capital is separate, from AED 100,000 for advisory up to AED 1,500,000 for an exchange without a VARA-licensed custodian.

How many activities can one VARA licence cover?

A firm can combine several of the eight activities under one licence, paying an extension fee for each extra activity. Custody is the exception: a custodian must be a separate legal entity with its own standalone licence.

Does a VARA licence cover the DIFC or Abu Dhabi?

No. The DIFC is regulated by the DFSA and ADGM by the FSRA, each with its own virtual asset rules. Federal UAE Central Bank rules on payment tokens can also apply on top of a VARA licence.

Can a firm operate while its VARA application is pending?

No. An Approval to Incorporate lets a new firm set up its company, office and team, but VARA states that the firm is not permitted to carry on virtual asset activities until it receives the VASP licence.

Keep reading

• CASP licence jurisdictions compared
• CASP licence cost in 2026
• Crypto AML compliance guide for exchanges and VASPs
• Hong Kong VATP licence explained
• What is a VASP?

This article is educational and is not financial or legal advice. Fees, capital figures and regulatory status are taken from VARA, DFSA and UAE Central Bank sources and law-firm summaries as checked on 17 October 2026, and they can change; confirm current requirements with VARA and qualified UAE counsel before applying. Sources are linked throughout.