The UAE stands as a global hub for innovation, continuously creating opportunities for businesses to flourish. Recognizing the growing significance of virtual assets, the country has taken proactive steps to regulate and support this emerging sector. To ensure secure and compliant operations, the UAE established the Virtual Asset Regulatory Authority (VARA). This regulatory body plays a crucial role in fostering innovation while maintaining a well-structured and secure environment for virtual asset activities.
Businesses looking to engage in virtual asset activities must obtain the necessary licenses and approvals from the relevant authorities. Here’s a step-by-step guide to help new firms navigate the process of securing a VARA license.
Steps to Apply for a VARA License
The process of acquiring a Virtual Asset Service Provider (VASP) license is divided into two main stages. New businesses must comply with all requirements at each stage to operate legally and effectively within the UAE.
1. Initial Approval Process
Before commencing operations, businesses need to secure initial approval by following these steps:
Submit an Initial Disclosure Questionnaire (IDQ)
- New firms must submit an Initial Disclosure Questionnaire (IDQ) to the Dubai Economy & Tourism (DET) or the relevant Free Zone Authority.
- The IDQ can be accessed on the VARA website.
Provide Essential Documentation
- Submit a business plan detailing the firm’s objectives and operations.
- Provide information about beneficial owners and the management team.
Pay Initial Fees
- A partial application fee, typically 50% of the total, is required to initiate the review process.
Secure Initial Approval
- Once approved, businesses can proceed with legal incorporation, operational setup (including office space and staffing), and infrastructure development.
- Important: During this stage, entities are not permitted to engage in any virtual asset activities. Failure to meet regulatory standards may result in the revocation of initial approval.
2. VASP License Application
Once initial approval is secured, businesses can move to the next stage to finalize their VASP license:
Prepare and Submit Required Documents
- Submit additional documents based on feedback and instructions provided during the initial approval stage.
Address VARA Feedback
- VARA may request further documentation, meetings, or interviews to ensure compliance.
Complete Fee Payment
- Pay the remaining application fees along with the first year’s supervision fee, if applicable.
Receive the VASP License
- Upon approval, businesses can officially begin their virtual asset operations.
Key Documents Needed for the Application
Applicants must maintain and submit a range of documents, including:
- Certificate of incorporation
- List of ultimate business owners
- Confirmation of compliance (fit and proper confirmations)
- Proof of funding sources
- Governance framework and organizational structure
- Business website details
- Regulatory business plan
- Financial forecasts and statements (entity and group level)
- Evidence of paid-up capital
- Insurance certificates
- Succession and wind-down plans
- Reserve account report
- Details on key personnel (CVs, job descriptions, and passport copies)
Why Choose UAE Auditors for VARA Licensing Support?
Handling the licensing process for VARA compliance requires a thorough understanding of regulatory requirements. UAE auditors can provide expert guidance to ensure that firms meet all necessary criteria efficiently. Their expertise includes:
- Assistance with documentation and compliance filings.
- Advisory services on financial and regulatory obligations.
- Support in preparing business plans and governance frameworks.
- Guidance on meeting VARA’s regulatory standards.
By partnering with professional auditors in Dubai, firms can streamline their application process and improve their chances of securing a VARA license successfully.