Understanding Dubai’s New Virtual Asset Law released by VARA: A Comprehensive Guide

• If you want to operate a virtual asset business in Dubai, understanding the latest regulatory framework is necessary before you start offering services. Dubai has established a dedicated regulatory regime for virtual assets through Law No. (4) of 2022 Regulating Virtual Assets in the Emirate of Dubai, which established the Dubai Virtual Assets Regulatory Authority (VARA) and gave it responsibility for regulating virtual asset activities across Dubai, excluding the Dubai International Financial Centre (DIFC). If you are considering company registration in Dubai for a cryptocurrency exchange, custody provider, broker, adviser, or another virtual asset business, you must assess whether your planned activities fall within VARA’s regulatory perimeter and obtain the required approvals before commencing operations. VARA’s framework has continued to evolve, with regulatory updates issued during 2026, making it important to rely on the current rules rather than older guidance. 

What is Dubai’s new virtual asset law? 

• Dubai’s virtual asset law is primarily based on Law No. (4) of 2022, which established a legal framework for regulating virtual asset activities in the emirate. The law defines virtual assets broadly and gives VARA powers to regulate, supervise, and oversee virtual asset services, virtual asset platforms, and Virtual Asset Service Providers (VASPs). 

• The law applies across Dubai’s mainland, free zones, and special development zones, but does not apply within the Dubai International Financial Centre (DIFC). This distinction is important because DIFC has its own financial-services regulatory framework. 

• The law is supported by the Virtual Assets and Related Activities Regulations 2023, together with VARA rulebooks covering areas such as licensing, compliance and risk management, technology, market conduct, anti-money laundering, and individual virtual asset activities. There are several opportunities and challenges presented by Dubai’s VARA Law, refer to this blog, to understand them in detail.  

• Practical takeaway: You should identify your exact business activity before choosing a licensing route, because the regulatory requirements can differ substantially between activities. 

Who regulates virtual assets in Dubai? 

• The Dubai Virtual Assets Regulatory Authority (VARA) is the principal authority responsible for regulating virtual asset activities in Dubai outside DIFC. VARA was established under the 2022 Dubai Virtual Asset Law and has legal, financial, and administrative autonomy. 

• VARA regulates VASPs carrying out activities such as: 

• Advisory services 

• Broker-dealer services 

• Custody services 

• Exchange services 

• Lending and borrowing 

• Virtual asset management and investment 

• Virtual asset transfer and settlement 

• Certain virtual asset issuance activities 

• VARA’s current framework also requires licensed VASPs to comply with mandatory rulebooks covering company requirements, compliance and risk management, technology and information, and market conduct, in addition to activity-specific rulebooks. 

What are VARA regulations in Dubai? 

• The VARA regulations Dubai framework consists of the 2023 Virtual Assets and Related Activities Regulations and supporting rulebooks, rules, directives and guidance that VARA updates periodically. The framework covers licensing, issuance, regulated activities, AML/CFT, marketing, market offences, supervision, and enforcement. 

• For example, licensed VASPs must comply with: 

• Company Rulebook 

• Compliance and Risk Management Rulebook 

• Technology and Information Rulebook 

• Market Conduct Rulebook 

• Relevant activity-specific rulebooks 

• AML/CFT requirements 

• VARA can also issue additional rules, directives, and guidance and may impose further requirements on a VASP based on factors such as its business model, risks, or compliance position. 

• Practical takeaway: You should treat VARA compliance as an ongoing obligation rather than a one-time licensing requirement. 

Who needs a Virtual Asset Service Provider license in Dubai? 

• If you intend to conduct regulated virtual asset activities in or from Dubai outside DIFC, you generally need a VARA VASP license before commencing those activities. VARA expressly states that firms from the UAE and overseas can apply, but they must obtain the appropriate license before operating. 

• This can apply to businesses involved in exchanges, custody, brokerage, advisory services, investment management, and other regulated virtual asset activities.  

• The exact license depends on what your company intends to do. You should therefore avoid selecting a generic “crypto license” without first mapping your activities against VARA’s regulatory categories. 

What capital requirements apply to Dubai VASPs? 

• Capital requirements vary according to your licensed activity. Under VARA’s Company Rulebook, an advisory business must generally maintain paid-up capital of AED 100,000. For custody services, the requirement is the higher of AED 600,000 or 25% of fixed annual overheads. Exchange businesses may require the higher of AED 800,000 or 15% of fixed annual overheads where the relevant conditions are satisfied. 

• Broker-dealer requirements can also vary depending on whether the business uses a VARA-licensed custody provider or receives other approval during licensing. 

• Special capital requirements can apply to particular virtual asset issuance activities. For example, VASPs licensed to issue certain fiat-referenced virtual assets must maintain paid-up capital of at least AED 1.5 million plus 2% of the available supply under the applicable rules. 

• Practical takeaway: You should calculate your capital requirement based on the specific activities you plan to conduct rather than assuming that one fixed minimum applies to every crypto business. 

What are the main compliance requirements under VARA? 

• A strong VARA crypto compliance guide should go beyond obtaining a license. You must establish systems that allow your business to comply continuously with applicable AML/CFT, governance, risk management, technology, client protection, and market conduct obligations. 

• Your compliance framework will have to address: 

• Customer due diligence and AML/CFT controls 

• Risk assessment and risk management 

• Governance and responsible senior management 

• Technology and information security 

• Client agreements and disclosures 

• Market conduct requirements 

• Record keeping and reporting 

• Marketing and promotional restrictions 

• Business continuity and operational resilience 

• Financial and prudential controls 

• VARA’s regulations also contain specific AML/CFT requirements and marketing rules, while licensed VASPs must follow the relevant mandatory rulebooks. 

Why should you choose Tetra Consultants? 

• If you are entering Dubai’s virtual asset sector, you need to coordinate company incorporation, licensing, compliance, and operational requirements rather than treating each requirement separately. Tetra Consultants can assist you throughout this process by providing: 

• Our team can help you in identifying the relevant license category and preparing your application. 

• Our licensing specialists can coordinate the incorporation and regulatory application stages. 

• Our incorporation specialist can help you in selecting a suitable Dubai mainland or free-zone structure based on your proposed virtual asset activities.  

Conclusion  

• Dubai’s virtual asset framework provides a dedicated regulatory structure for businesses operating in this rapidly developing sector. Under Law No. (4) of 2022 and the subsequent VARA regulations and rulebooks, you need to assess your activities carefully, obtain the appropriate authorization, and maintain ongoing compliance. 

• If you plan to establish a VASP in Dubai, you should consider the licensing category, capital requirements, regulatory fees, compliance framework, technology controls, application requirements, and immigration arrangements before commencing operations. Because VARA continues to update its regulatory framework, you should also ensure that your compliance approach reflects the latest rules and guidance applicable when you apply. 

• If you want to apply for Dubai VASP license, contact us, and our team will get back to you in 24 hours. 

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