Dubai VARA License
Your Guide for Legal and Regulatory Compliance: From Licensing to Daily Operations.
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About VARA
Obtaining a Dubai VARA license is essential for businesses operating in the virtual asset industry within Dubai. This license, regulated by the Virtual Asset Regulatory Authority (VARA), ensures compliance with local laws and international standards. It provides a legal framework for companies to operate securely and reliably in the dynamic field of virtual assets. The Dubai VARA license is a key step for any firm looking to establish a legitimate and successful virtual asset business in Dubai's growing digital economy.
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VARA License Dubai: Available Activities
Advisory Services
Providing personalized advice on virtual asset actions or transactions requires understanding a client's investment experience, goals, financial situation, risk tolerance, acquisition means, and loss capacity.
Exchange Services
Activities include trading Virtual Assets for fiat, swapping different Virtual Assets, matching buyer and seller orders for asset-to-fiat or asset-to-asset trades, and maintaining an order book for these exchanges.
Broker-Dealer Services
Virtual Asset activities involve managing orders, pairing buyers and sellers, dealing on behalf of entities, and offering issuance services. Entities must follow the VA Issuance Rulebook, which may be updated, for any Virtual Asset issuance.
Lending and Borrowing Services
Involves executing a contract where a Virtual Asset is transferred or lent from the Lender(s) to the Borrower(s). The Borrower(s) agree to return the asset either on demand or at the end of the agreed period.
Custody Services
Virtual Asset safekeeping entails holding assets for others and acting on their instructions. VASPs must adhere to rules for client asset custody, with eligibility for a Custody Services License requiring segregation of each client's assets in individual VA Wallets.
VA Management and Investment Services
Encompasses managing or overseeing an entity's Virtual Assets as an agent or fiduciary, including investment management and overseeing staking in proof-of-stake Distributed Ledger Technologies for fees or rewards.
VA Transfer and Settlement Services
Involves the transfer, transmission, and/or settlement of Virtual Assets between entities or from an entity to another VA Wallet, address, or location.
VARA License in Dubai: Registration Process
VARA License Registration Process in Dubai - Initial Approval.
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Initial Disclosure Questionnaire: Begin by submitting the Initial Disclosure Questionnaire for your business, an essential step in the VARA license process in Dubai.
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Business Plan Development: Craft a detailed business plan showcasing your operational intentions, financial forecasts, and your strategy for integrating cryptocurrency.
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Ownership and Management Information: Provide details about the company's beneficial owners and top management as part of the VARA licensing requirements.
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Payment of Fees: Pay the initial fees, generally 50% of the total license application fee, to start the application's review under the VARA framework.
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Receiving Initial Approval: After obtaining initial approval, proceed with the final onboarding steps including legal incorporation and operational setup, such as renting office space and hiring staff. Note that until the final VARA license in Dubai is granted, the firm cannot engage in Virtual Asset activities.
Select Your Approach: Applying for a VARA License via Mainland Companies or Through Dubai Free Zone Authority (FZA), Excluding DIFC.
To navigate the process of obtaining a Full Market Product (FMP) license from VARA, firms must follow these key steps:
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Document Submission: Following the Initial Approval, the firm is required to prepare and submit the relevant documentation to VARA, essential for the Full Market Product (FMP) license application.
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Feedback and Fee Settlement: After responding to any feedback from VARA and fulfilling additional requirements, the firm is responsible for the payment of the remaining license application fees and the first year's supervision fees.
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FMP License Granting: Once all necessary fees are paid and operational conditions met, the firm will receive the FMP license from VARA, enabling them to engage in Virtual Asset activities.
VARA License Cost: Government Fees
VA Activity | Licence Application Fee | Licence Extension Fee | Annual Supervision Fee | Share Capital |
|---|---|---|---|---|
VA Transfer and Settlement Services | AED 40,000 10,900$ | AED 20,000 5,450$ | AED 80,000 21,800$ | The higher of [i] AED 500,000; or [ii] 25% of fixed annual overheads. |
Advisory Services | AED 40,000 10,900$ | AED 20,000 5,450$ | AED 80,000 21,800$ | AED 100,000. |
Broker-Dealer Services | AED 100,000 27,250$ | AED 50,000 13,125$ | AED 200,000 54,500$ | Broker-Dealer Services using a VASP Licensed by VARA to provide Custody Services or otherwise approved during the licensing process: the higher of [i] AED 400,000; or [ii] 15% of fixed annual overheads. In all other instances, the higher of [i] AED 600,000; or [ii] 25% of fixed annual overheads. |
Custody Services | AED 100,000 27,250$ | AED 50,000 13,125$ | AED 200,000 54,500$ | The higher of [i] AED 600,000; or [ii] 25% of fixed annual overheads. |
Exchange Services | AED 100,000 27,250$ | AED 50,000 13,125$ | AED 200,000 54,500$ | Exchange Services using a VASP Licensed by VARA to provide Custody Services or otherwise approved during the licensing process: the higher of [i] AED 800,000; or [ii] 15% of fixed annual overheads. In all other instances, the higher of [i] AED 1,500,000; or [ii] 25% of fixed annual overheads. |
Lending and Borrowing Services | AED 100,000 27,250$ | AED 50,000 13,125$ | AED 200,000 54,500$ | The higher of [i] AED 500,000; or [ii] 25% of fixed annual overheads. |
VA Management and Investment Services | AED 100,000 27,250$ | AED 50,000 13,125$ | AED 200,000 54,500$ | VA Management and Investment Services using a VASP Licensed by VARA to provide Custody Services or otherwise approved during the licensing process: the higher of [i] AED 280,000; or [ii] 15% of fixed annual overheads. In all other instances, the higher of [i] AED 500,000; or [ii] 25% of fixed annual overheads. |
If you want to study more about the intricacies of crypto regulation, our comprehensive guide offers valuable insights to navigate this evolving landscape effectively. Don't miss out!
VARA Dubai License vs. Lithuania and Estonia: A Comparative Analysis
Feature | Dubai | Lithuania | Estonia |
|---|---|---|---|
Cost | 20 000€ | 20 000€ | 25 000€ |
License Type & Government fee | 1. 9,700€ - Advisory Services & VA Transfer and Settlement Services | 1. Cryptocurrency exchange license
2. Crypto wallet and custodian services license
| 1. Cryptocurrency exchange license
2. Crypto wallet and custodian services license
|
2. 24,250€ - Broker-Dealer, Custody, Exchange, Lending and Borrowing & VA Management and Investment Services | No additional fee | 10 000€ | |
Audit | May be required by VARA | Not required | Monthly and yearly are needed |
Office | Required | Can be virtual | Required |
AML (Anti-Money Laundry Officer) | Can be any nationality | Local needed | Local needed |
AML monthly salary | 5000€ | Starting from 1200€ | Starting from 2000€ |
Local director | Can be any nationality | Can be any nationality | Can be of any nationality, but have to live in Estonia |
Share capital terms | Immidiately | 25% now, 75% within a year.
| Immediately |
Required share capital | 24,250€ (Advisory Services) - 194,000€ (Exchange Services)
| 125 000€ | 100 000€ - Crypto wallet and custodian services license.
250000€ - Cryptocurrency exchange license |
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