The UAE is at the forefront of innovation, offering businesses numerous opportunities to thrive. One such initiative is the encouragement of virtual asset usage. To facilitate and regulate activities related to virtual assets, the UAE established the Virtual Asset Regulatory Authority (VARA). This regulatory body ensures secure operations while fostering innovation in the virtual asset sector.

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:

  1. Submit an Initial Disclosure Questionnaire
    • Mainland-based firms should submit this to the Department of Economy and Tourism (DET), while firms operating in free zones should approach the relevant free zone authority.
  2. Provide Essential Documentation
    • Submit a business plan, information about beneficial owners, and details of the management team.
  3. Pay Initial Fees
    • A partial application fee, typically 50% of the total, is required to initiate the review process.
  4. 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:

  1. Prepare and Submit Required Documents
    • Submit additional documents based on feedback and instructions provided during the initial approval stage.
  2. Address VARA Feedback
    • VARA may request further documentation, meetings, or interviews to ensure compliance.
  3. Complete Fee Payment
    • Pay the remaining application fees along with the first year’s supervision fee, if applicable.
  4. 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 Hallmark Auditors for VARA Licensing Support?

Hallmark Auditors is a trusted partner for businesses in the UAE, offering tailored solutions to meet their regulatory and compliance needs. Our team of seasoned professionals stays up-to-date with the latest VARA regulations, ensuring that your application process is smooth and efficient.

From organizing documentation to managing compliance requirements, we provide end-to-end support for businesses venturing into the virtual asset sector. We also assist in preparing for VARA audits, enabling you to maintain compliance and stay ahead of the competition.

Get in touch with Hallmark Auditors today to simplify your VARA licensing journey and take your business to the next level!