VARA Licence Guide 2026: How to Obtain a Virtual Asset Licence in Dubai

Dubai has established itself as one of the leading jurisdictions for businesses operating in the virtual asset sector. However, operating a virtual asset business in Dubai is a regulated activity, and businesses generally need to obtain the appropriate authorisation from the Virtual Assets Regulatory Authority (VARA) before commencing regulated virtual asset activities.

For entrepreneurs, investors and international businesses considering a virtual asset venture in Dubai, understanding the VARA licensing framework is an important first step. This guide provides an overview of the VARA licensing process, regulated activities, key requirements and practical considerations for 2026.

What is VARA?

The Virtual Assets Regulatory Authority (VARA) is Dubai's dedicated regulator for virtual assets. It was established under Dubai Law No. 4 of 2022 to regulate Virtual Asset Service Providers (VASPs) and virtual asset activities in the Emirate.

VARA's regulatory perimeter covers Dubai mainland and Dubai's free zones, excluding the Dubai International Financial Centre (DIFC), which has its own regulatory framework.

Any entity intending to conduct regulated virtual asset activities in or from Dubai must obtain the appropriate VARA authorisation before commencing those activities.

Which businesses need a VARA licence?

The requirement depends on the nature of the proposed business and the activities it intends to undertake. VARA currently identifies eight principal regulated Virtual Asset activities:

• Advisory Services
• Broker-Dealer Services
• Custody Services
• Exchange Services
• Lending and Borrowing Services
• Management and Investment Services
• Transfer and Settlement Services
• VA Issuance – Category 1

A business may apply for multiple activities under a single overarching VARA licence, subject to meeting the requirements applicable to each activity. Custody is subject to specific segregation and governance requirements and must be conducted through a distinct legal entity with a standalone licence.

Importantly, simply describing a business as a technology, blockchain or DLT company does not necessarily place it outside VARA's regulatory perimeter. Businesses should assess the actual activities they intend to perform rather than relying solely on their business description.

VARA licence vs company formation

One of the most important points for prospective applicants is that company formation and VARA licensing are separate steps. A business may need to establish an appropriate legal entity through Dubai Economy and Tourism (DET) or a relevant Dubai free zone, while also obtaining the necessary regulatory authorisation from VARA.

For new firms, VARA's licensing process is generally structured in two stages.

Stage 1 — Approval to Incorporate

The applicant begins by submitting an Initial Disclosure Questionnaire (IDQ) through DET or the relevant Dubai free zone. The application may require information including:

• Proposed business model and activities
• Business plan
• Beneficial ownership information
• Senior management details
• Regulatory and compliance information
• Other supporting documentation requested during the review

Following the initial review and payment of the applicable initial fees, VARA may issue an Approval to Incorporate (ATI). The ATI allows the applicant to proceed with incorporation and operational setup. However, an ATI does not authorise the business to conduct virtual asset activities.

Stage 2 — VARA Licence

Once the entity has completed the required incorporation and operational setup, the applicant proceeds with the VARA licence application. VARA assesses whether the applicant satisfies the relevant regulatory, governance, compliance, technology, financial and operational requirements.

The business may only commence the regulated virtual asset activities once the required VARA licence has been obtained.

Key VARA rulebooks

Obtaining the licence is only the beginning of the regulatory journey. VASPs must comply with four compulsory rulebooks:

• Company Rulebook
• Compliance and Risk Management Rulebook
• Technology and Information Rulebook
• Market Conduct Rulebook

The VASP must also comply with the activity-specific rulebooks applicable to the activities for which it is licensed. Depending on the business model, this can include requirements relating to advisory, brokerage, custody, exchange, lending and borrowing, management and investment, transfer and settlement, or virtual asset issuance.

What does VARA look for?

A successful VARA application is not simply about submitting incorporation documents. The regulator's assessment can extend across the applicant's overall business and control environment, including the following areas.

Governance and management

The applicant needs an appropriate governance structure, with suitable senior management and clearly defined responsibilities.

Compliance and risk management

The business must establish appropriate compliance and risk management arrangements proportionate to its activities.

AML/CFT

Virtual asset businesses operate within a regulated AML/CFT environment. Appropriate policies, procedures, customer due diligence and transaction monitoring arrangements are therefore important components of the compliance framework.

Technology and information security

Technology is a fundamental part of most virtual asset businesses. VARA's Technology and Information Rulebook establishes requirements applicable to licensed VASPs.

Market conduct

Licensed VASPs must also comply with requirements covering areas such as marketing and promotions, client agreements, complaints handling, investor classifications and public disclosures.

Financial resources

Applicants should also consider the applicable capital and financial resource requirements for their proposed activities when developing their business plan and financial model.

How long does VARA licensing take?

There is no universal timeline that applies to every VARA application. The duration can depend on:

• The proposed activities
• Complexity of the business model
• Ownership structure
• Experience and suitability of management
• Quality and completeness of documentation
• Compliance and AML/CFT framework
• Technology and information-security arrangements
• Capital and financial-resource requirements
• Regulatory queries and subsequent revisions

For this reason, businesses should avoid treating VARA licensing as a simple company-registration exercise. Early preparation can significantly improve the efficiency of the application process.

Common mistakes applicants should avoid

• Selecting the licence activity too early — the appropriate regulatory activity should be determined after properly understanding the proposed business model.
• Treating VARA as only a licensing formality — VARA licensing involves establishing an operational and compliance framework capable of meeting ongoing regulatory requirements.
• Underestimating compliance requirements — AML/CFT, risk management, technology controls, governance and market conduct requirements should be considered from the beginning rather than after incorporation.
• Starting operations before approval — a company should not assume that incorporation, an ATI or a commercial licence by itself authorises regulated virtual asset activities. VARA requires the appropriate authorisation before regulated activities are conducted.
• Failing to plan for ongoing compliance — VARA requirements continue after licensing. Businesses need appropriate systems, controls and governance to maintain compliance as their operations grow.

What about virtual asset issuance?

Businesses intending to issue virtual assets require a separate assessment under VARA's Virtual Asset Issuance Rulebook. The framework distinguishes between different categories of issuance, with Category 1 issuances requiring a VARA licence, while Category 2 issuances are subject to applicable VARA requirements and approvals. The precise treatment depends on the nature and characteristics of the proposed virtual asset.

Because the issuance framework continues to evolve, businesses planning a token or other virtual asset issuance should assess the current VARA requirements before proceeding.

How we can help

Obtaining a VARA licence requires more than completing an application form. It requires aligning the business model, corporate structure, governance, compliance framework and operational setup with the applicable regulatory requirements. Our support can include:

• Business model and regulatory perimeter assessment
• VARA activity and licence mapping
• UAE company formation coordination
• Initial Disclosure Questionnaire support
• Business plan and financial model preparation
• Corporate and ownership structuring
• Compliance and risk framework support
• AML/CFT framework coordination
• Policy and procedure development
• VARA application documentation
• Regulatory application coordination
• Support with responses to regulatory queries
• Pre-licensing readiness assessment
• Ongoing compliance and governance support

Final thoughts

Dubai offers significant opportunities for businesses operating in the virtual asset sector, but the regulatory environment requires careful preparation. A successful VARA licensing strategy should begin with the business model, followed by the appropriate regulatory activity assessment, corporate structure, governance and compliance framework, and finally the licensing application.

For businesses considering entering Dubai's virtual asset ecosystem in 2026, preparing the regulatory framework early can help avoid costly restructuring and delays later in the process.