A VASP licence in Dubai is issued by VARA, the Virtual Assets Regulatory Authority, under Dubai Law No. 4 of 2022. Authorisation runs in two stages — an Approval to Incorporate, then the full VASP licence — and capital is set by the activities you are licensed for, starting at AED 100,000 (~USD 27,300) for Advisory and rising to around AED 800,000 (~USD 218,000) for Custody, cumulative where you hold more than one permission. OBOLUS runs the path end-to-end on a fixed-fee package, plus government fees at cost.
What the law says now
VARA was established under Dubai Law No. 4 of 2022 as a dedicated virtual-assets regulator covering the Emirate of Dubai, excluding the DIFC financial free zone (which is regulated separately by the DFSA). It operates an activity-based rulebook: you are licensed for specific virtual-asset activities — such as advisory, broker-dealer, exchange, custody, lending and management — and your obligations and capital scale with what you do.
Capital requirements are set by activity and are cumulative. As at the registry date, Advisory carries a minimum paid-up capital of AED 100,000 (~USD 27,300), while Custody can require up to approximately AED 800,000 (~USD 218,000). A firm licensed for several activities must meet the combined requirement, and VARA can also assess capital against expenditure-based measures. Authorisation and supervision fees are charged per VARA's Schedule 2 — confirm the current figures before budgeting, as they are reviewed periodically.
Dubai's position is one gateway among several in the region. Abu Dhabi's ADGM/FSRA regime is a common-law alternative with a different capital model, and the choice between them turns on your business model rather than prestige — we set out the trade-offs in our VARA vs ADGM comparison and in the Jurisdiction Navigator.
How the licence works in practice
The VARA process is sequential, and most of the work is front-loaded into the application.
- Activity mapping. We define precisely which VARA activities the business needs — under- or over-scoping both cost money — and confirm the capital and substance that follow.
- Approval to Incorporate. The first stage establishes the legal entity and the in-principle approval to proceed, with initial disclosures on shareholders, controllers and business plan.
- Full VASP application. The substantive dossier: governance, fit-and-proper assessments for controllers and senior management, an AML/CFT framework, technology and custody controls, and financial projections against the capital floor.
- Conditions and authorisation. VARA typically authorises subject to conditions; we close those out to move from approval to a live licence.
- Go-live and supervision. Once licensed, ongoing reporting, supervision fees and rulebook compliance begin.
What VARA looks for is consistent across activities: real substance in Dubai, credible and fit controllers, an AML/CFT and Travel Rule programme that actually functions, and demonstrable control over client assets. A polished application that cannot evidence operating substance does not get far. Our compliance practice builds the AML and Travel Rule framework as part of the package.
Capital and fees at a glance
| Item | Position (as at registry date) |
|---|---|
| Regulator | VARA (Virtual Assets Regulatory Authority), Dubai Law No. 4 of 2022 |
| Licence | VASP licence — activity-based |
| Process | Two stage: Approval to Incorporate → full VASP |
| Capital — Advisory | AED 100,000 (~USD 27,300) |
| Capital — Custody | up to ~AED 800,000 (~USD 218,000) |
| Multiple activities | Capital is cumulative across permissions |
| Government fees | Per VARA Schedule 2 — confirm current figures with counsel |
| Timeline | Confirm with counsel — depends on activities and readiness |
Activities you can be licensed for
VARA's regime is built around discrete virtual-asset activities, and your licence is the sum of the activities you are approved to carry on. In broad terms these cover advisory services, broker-dealer services, exchange operation, custody, lending and borrowing, virtual-asset management and investment, and virtual-asset transfer and settlement. Each activity has its own conduct rules, and capital and substance obligations build up as activities are added.
The practical discipline is to licence for what the business will actually do over the next year to eighteen months. Adding a permission later is a variation — manageable, but it has its own cost and lead time — while holding permissions you never use ties up capital and invites supervisory questions. We map the activity set against the commercial plan before any filing, so the licence matches the business rather than an aspiration.
Substance and personnel
VARA expects genuine operating substance in Dubai. That means more than a registered address: it means qualified people in appropriate roles, decision-making that actually happens in the Emirate, and control functions that are resourced rather than nominal. Senior management and controllers go through fit-and-proper assessment, and the regulator looks for a compliance function, a money-laundering reporting officer and risk oversight that can stand on their own.
Custody and exchange activities raise the bar further, because the regulator is concerned with how client assets are held and segregated and how operational and cyber risk is managed. An application that cannot evidence real substance — or that proposes to run critical functions entirely from outside Dubai — is unlikely to progress, however polished the paperwork. Building that substance is part of the engagement, not an afterthought.
After authorisation: ongoing obligations
A VARA licence is the beginning of a supervisory relationship, not the end of the project. Once live, a VASP must meet continuing obligations: periodic regulatory reporting, payment of supervision fees under Schedule 2, maintenance of the capital floor, ongoing AML/CFT and Travel Rule compliance, and prompt notification of material changes such as new controllers or new activities. Marketing and promotion of virtual assets are also regulated, and breaches carry real consequences.
We build the reporting calendar and the compliance framework so the business can meet these obligations without scrambling each quarter, and we keep watch on rulebook changes that affect licensees. Where a business operates in more than one jurisdiction, we align the Dubai obligations with the others so the group runs one coherent compliance programme rather than several disconnected ones — see our licensing practice for the multi-jurisdiction view.
Risks and forks
- Scoping the wrong activities. Each permission adds capital and compliance load. Licensing for activities you will not run wastes capital; missing one means a variation later.
- Underestimating substance. VARA expects genuine presence and qualified personnel in Dubai. Thin substance is a common reason applications stall.
- Treating AML as paperwork. The AML/CFT and Travel Rule programme must be operational, not a template. Regulators test whether it works.
- Budgeting on stale fees. Schedule 2 figures are reviewed; always confirm current authorisation and supervision fees before committing.
- Leaving banking to the end. A licence without a banking relationship is half a business. We line up EMI and banking onboarding alongside the application rather than after it, so the company can actually operate once authorised.
What to do next
Start by deciding what the business actually needs to do in the next 18 months, then licence to that — not to a wish-list. We will map the activities, the capital and the substance, give you a fixed-fee quote for the VARA path, and tell you honestly whether Dubai or an alternative such as ADGM fits better. Licensing engagements start from $20,000 plus government fees.
FAQ
How much capital do I need for a VARA licence?
It depends on the activities. Advisory starts at AED 100,000 (~USD 27,300); Custody can require up to around AED 800,000 (~USD 218,000). If you hold several permissions, the capital requirement is cumulative.
What are the government fees?
Authorisation and supervision fees are charged under VARA's Schedule 2. Because they are reviewed periodically, we confirm the current figures with you before budgeting rather than quoting a number that may be out of date.
How long does it take?
The timeline depends on the activities applied for and how ready the business is. We do not publish a fixed figure; we give a realistic estimate once we have mapped your scope.
Is VARA better than ADGM?
Neither is "better" in the abstract. VARA covers Dubai with an activity-based model; ADGM in Abu Dhabi is a common-law regime with a different capital basis. The right choice depends on your model — see our comparison.
Does VARA cover the DIFC?
No. The DIFC free zone is regulated separately by the DFSA. VARA covers the Emirate of Dubai outside the DIFC.
Tell us what the business will do and where, and we will map your VARA options — capital, activities, substance and cost — in about 30 minutes. The first call is free and under NDA.