A Guide to Obtaining a VARA License in Dubai: Key Steps and Requirements

A huge number of businesses related to virtual assets are flocking to Dubai after the advent of Dubai’s Virtual Assets Regulatory Authority also known as VARA. The Virtual Assets Regulatory Authority (VARA) regulates and supervises the distribution, usage, and exchange of virtual assets in and out of the emirate of Dubai. Every virtual asset business has only one main question in mind: How to obtain a VARA license in Dubai?

Obtaining a VARA license in Dubai can be a tedious process unless you have a legal consultant who helps you with the licensing process. This is when we come into the picture. Now let us discuss how to obtain a VARA license in Dubai and what are the key steps and requirements for the same.

The Virtual Assets and Related Activities Regulations 2023 have been released by Dubai's Virtual Assets Regulatory Authority (VARA). The Regulations provide a comprehensive Virtual Assets (VA) Framework based on economic sustainability and cross-border financial security principles.

How to obtain a VARA License in Dubai? (For New Businesses)

Stage 1 - Application for Initial Approval

1. Fill out an Initial Disclosure Questionnaire [IDQ] and send it to Dubai Economy & Tourism [DET] or a relevant Free Zone Authority [FZA].
2. 2. As needed, provide further documentation. This documentation will include a business strategy as well as information about the firm's beneficial owners and top management.
3. Pay the initial payments [often 50% of the license application price] necessary to begin the application evaluation.
4. Obtain an Initial Approval to finalize the firm's formal incorporation and complete operational set-up, such as office space rental and personnel on-boarding. 
   NOTE: At this time, the company is not authorized to engage in Virtual Asset operations.

Stage 2 - Application for Full Market Product (FMP) License

After receiving an Initial Approval, a company can apply for an FMP License:

1. Prepare and submit documents in accordance with VARA's guidelines upon receipt of the Initial Approval.
2. Receive direct feedback from VARA on the proposal, which may involve meetings, interviews, and the submission of further paperwork.
3. Pay the remaining half of the application license costs as well as the first year's supervision fees.
4. Obtain an FMP License, which may be subject to operating requirements.

How to obtain a VARA License in Dubai for Existing Businesses?

Firms conducting VA Activities in or from Dubai [excluding DIFC] prior to 7 February 2023 have to contact their commercial licensor (DET or the applicable FZA) by 30 April 2023 to submit an Initial Disclosure Questionnaire (IDQ).
Firms who have not completed the IDQ by April 30, 2023, should contact their commercial licensor immediately and make arrangements to do so.

VARA has begun issuing Application Acknowledgement Notices (AAN) to organizations that have completed an IDQ. Following receipt of an AAN, a company must submit an FMP License application by August 31, 2023. The completion of the FMP License application was previously mentioned.

Licenses are provided for the following services:

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

To know more about how to obtain a VARA license in Dubai, get in touch with our experts at Finjuris.