VARA FAQs

1. VARA REGULATIONS & LICENSING

1. What is the VARA Virtual Assets and Related Activities Regulations?

The VARA Virtual Assets and Related Activities Regulations 2023 is a bespoke Virtual Assets
regulatory regime, which aims to provide VASPs with clear, comprehensive rules for offering
Virtual Asset services and activities to the market.

2. How can I find out which entities have already received a Licence?
Please refer to the register of licensed firms published on .

3. What is the purpose of the Virtual Assets Licence?

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.
 4. I am a Virtual Asset Service Provider [VASP]; When can I apply for a VARA Licence?
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].

5. Who should apply for a Virtual Asset Service Provider [VASP] Licence?
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.

6. How should a VASP apply for a VARA licence?

Please refer to the License Application page on our website.

7. When can a VASP access retail clients?

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.

8. Is there any restriction regarding nationalities applying for a VARA Licence?

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].

9. Are there any requirements for VASPs to appoint UAE Residents?

VASPs need to ensure that their Senior Management team comprises suitably qualified
individuals and that they appoint two ‘Responsible Individuals’ [RIs].
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.

10. What types of legal entities will applicants need to establish to apply for a VA licence?
A Limited Liability Company [LLC] or FZ CO is preferable for this sector. Applications from sole
proprietorships will not be accepted by VARA.

11. How often is the VARA Licence renewed?

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

12. What are the documents required to apply for a VA licence?

Please refer to the License Application page on our website.
 13. Are there any minimum size requirements for VASP's physical presence [private
office/flex desk]?
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.

14. What are the VA licence application Fees?

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

15. What are the Capital and Prudential Requirements?

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

2. EXISTING VASPS

1. How will the Virtual Assets Regulations requirements be enforced in the market?
Enforcement actions will include Cease and Desist Orders, Reprimands, Warnings, Fines and
Penalties [e.g. licence suspensions, or scope of service or market limitations].
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].
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
guidance page of our website.

2. What activities am I permitted to offer the market?

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 . 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].

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.

3. I currently hold a Proprietary Trader commercial licence and trade using my own funds
with no clients, do I need a VARA Licence?
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.
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.

4. I currently hold a Distributed Ledger Technology commercial licence, do I need a VARA

Licence?
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

5. I currently hold a Metaverse commercial licence, do I need a VARA Licence?

This is a broad sector and it is critical to understand exactly which services are being
undertaken to respond more comprehensively;
At the first instance, entities offering Metaverse services are generally not required to hold a
VARA licence at this time.
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.

6. I currently hold an NFT Marketplace Commercial Licence, do I need a VARA Licence?

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.

7. I am a VASP operating prior to VARA's launch of its Full Market Regulatory Regime,
what am I required to do?
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.
Based on the assessment, VASPs may be rejected or additional information may be requested
Eligible VASP’s will receive an Application Acknowledgement Notice [AAN].
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 License Application page on our website.

8. I am a VASP that received an Application Acknowledgment Notice [AAN], what are the
next steps?
VASPs that receive an AAN must complete the full VA license application and ensure
submission by 31.August.2023.

Please refer to the License Application page on our website.

 9. I am a VASP that received an AAN, my commercial licence has expired while applying
for the full application, can I renew my commercial licence? And does it require VARA's
approval?
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.

10. I am a VASP that received an AAN, and want to amend by my commercial licence
details i.e. change of name/ UBO/ Address. Does it require 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.

11. I am a VASP that received an AAN, and want to change the VA activity?
Change of a VA Activity requires VARA review. A new IDQ will need to be submitted.

12. I am a VASP that intends to withdraw its commercial licence [Legacy VASP], what do I
need to do?
Withdrawal of Commercial licenses requires DET or the Free Zone Authority to notify VARA.

VARA will withdraw its AAN.

VARA will assess customer impact.
VASP will be required to return funds/ marketing update//fulfill its financial commitments.

13. I am a VASP that has an AAN, and I am unable to fulfil full market product requirements
[Full Application]? What should I do?
VARA will withdraw the AAN for any entity that cannot fulfill Virtual Asset Service Provider
Licence requirements.

14. What are the other scenarios where VARA may decide to withdraw an AAN?
VARA can withdraw the AAN in certain scenarios including but not limited to:
VASPs not fulfilling Virtual Asset Service Provider Licence requirements;
VASPs conducting illicit activity; or
VASPs not falling under VARA’s regulatory regime.

3. VA MARKETING REGULATIONS

1. I am an event organiser, and would like to apply for a virtual assets event permit. How
can I apply?
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.
You may apply for a VA event permit through the e-Permit system, by selecting the category
[VA event].
You will be required to confirm your adherence to VARA’s Marketing Regulations and
Guidelines:
You should ensure that all exhibitors and sponsors are aware of VARA’s Marketing Regulations
and Guidelines.
a. Administrative Order No. 01/2022 Relating to Regulation of Marketing, Advertising and
Promotions Related to Virtual Assets
b. Administrative Order No. 02/2022: Pursuant to, and to Be Read in Conjunction with
Issued Administrative Order No. 01/2022 Relating to Regulation of Marketing,
Advertising and Promotions Related to Virtual Assets1 [Marketing Regulation], the Dubai
Virtual Assets Regulatory Authority [Vara2] Undertakes to Impose the Following Fines
and Penalties in the Event of Violation or Non-Compliance
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.

2. I am an advertising company, and would like to advertise for my Virtual Asset clients on
billboards, taxis, outdoor spaces, etc. How can I apply?
For such advertising, you are required to apply through the central government advertising
system managed by Dubai Municipality.
You may apply for a permit by selecting the category [Virtual Asset Activity].
You will be required to confirm your adherence to VARA’s Marketing Regulations and
Guidelines:
a. Administrative Order No. 01/2022 Relating to Regulation of Marketing, Advertising and
Promotions Related to Virtual Assets
b. Administrative Order No. 02/2022: Pursuant to, and to Be Read in Conjunction with
Issued Administrative Order No. 01/2022 Relating to Regulation of Marketing,
Advertising and Promotions Related to Virtual Assets1 [Marketing Regulation], the Dubai
Virtual Assets Regulatory Authority [Vara2] Undertakes to Impose the Following Fines
and Penalties in the Event of Violation or Non-Compliance
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.

3. I am a VASP not licensed by VARA, but I would like to market in Dubai. Can I do so?
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.