Dubai has firmly established itself as a global pioneer in the virtual asset (VA) space, and at the core of this ecosystem is the Virtual Assets Regulatory Authority (VARA). As the world's first independent regulator for virtual assets, VARA provides a clear and progressive framework for businesses operating in this dynamic sector. Securing a VARA license is the essential key to legally conducting VA activities in and from Dubai.
What is VARA?
VARA is the competent authority responsible for regulating, supervising, and overseeing Virtual Asset services across the Emirate of Dubai (excluding the DIFC, which has its own framework). Its mission is to create a secure and advanced ecosystem for the VA industry while ensuring robust investor protection and mitigating market risks.
VARA's Regulated Activities:
VARA has defined a comprehensive list of activities that require a license.
These include:
- Advisory Services
- Broker-Dealer Services
- Custody and Management Services
- Exchange Services
- Lending and Borrowing Services
- Payments and Remittances Services
- VA Issuance Services
The VARA Licensing Process:
A Phased Approach VARA has implemented a meticulous multi-stage licensing process to ensure that only compliant and high-quality operators enter the market.
- Provisional Permit: The initial step involves an application to VARA to receive a provisional and preparatory permit. This allows the applicant to begin the process while VARA conducts its initial due diligence.
- Preparatory Minimum Viable Product (MVP) License: Once the provisional permit is granted, entities can apply for a Preparatory MVP License. This is a crucial stage where the firm must demonstrate its operational, technological, and compliance readiness. It allows the firm to commence limited operations within a monitored environment, serving a restricted number of approved clients.
- Full Market Product (FMP) License: After successfully operating under the MVP license and demonstrating full compliance with all VARA rulebooks—including those for company law, compliance & risk management, and market conduct—a firm can apply for a Full Market Product (FMP) License. This license permits the entity to operate at scale, serving the broader retail and institutional market.
Key Considerations for Applicants:
- Robust Compliance: Applicants must demonstrate a strong commitment to Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) regulations.
- Technological Soundness: The underlying technology must be secure, resilient, and fit for purpose.
- Corporate Governance: A clear and effective governance structure is required.
Your Partner in the Virtual Asset Economy
The VARA licensing journey is complex and requires deep regulatory understanding. Our consultants specialize in the VA landscape, providing expert guidance on navigating VARA’s rulebooks, preparing your application, and building the necessary compliance frameworks to secure your license.
Step into the future of digital finance with confidence. Contact us to start your VARA licensing process today.