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Understanding VASP Requirements in Dubai
DET (Dubai Department of Economy & Tourism), FZA (Dubai Free Zone Authorities), and VARA (Virtual Assets Regulatory Authority) are crucial regulatory bodies in Dubai, each playing a pivotal role in fostering economic growth and innovation.
- DET oversees the overall economic and tourism sectors, ensuring their development and prosperity.
- FZA promotes Dubai as a global business hub by managing and regulating various free zones.
- VARA specifically regulates the virtual asset industry, providing a framework for its growth and development.
Why Establish a VASP in Dubai?
Dubai offers several advantages for Virtual Asset Service Providers (VASPs):
- Strategic Location: Dubai’s geographical position provides access to a vast global market.
- Strong Economy: A diversified and resilient economy supports businesses.
- Favorable Regulations: Forward-thinking regulations and a supportive government environment.
- Talent Pool: A high retention rate of skilled professionals.
- Innovation Hub: A smart city culture encourages innovation and digitization.
Virtual Asset Activities
VARA authorizes VASPs to engage in various virtual asset activities, including:
- Advisory Services: Providing recommendations on virtual assets.
- Broker-Dealer Services: Facilitating the buying and selling of virtual assets.
- Custody Services: Safekeeping virtual assets for clients.
- Exchange Services: Trading virtual assets for fiat currency or other virtual assets.
- Lending and Borrowing Services: Offering lending and borrowing services using virtual assets.
- Virtual Asset Management and Investment Services: Managing virtual asset portfolios.
- Virtual Asset Transfer and Settlement Services: Transferring and settling virtual assets.
| Advisory Services | AED 100,000 |
| Broker-Dealer Services | If the VASP is collaborating with a VARA licensed VASP to provide Custody Services or otherwise approved by VARA, the higher of:• AED 400,000, or• 15% of fixed annual overheads In all other instances, the higher of:• AED 600,000• 25% of fixed annual overheads |
| Custody Services | The higher of:• AED 600,000• 25% of fixed annual overheads |
| Exchange Services | If the VASP is collaborating with a VARA licensed VASP to provide Custody Services or otherwise approved by VARA, the higher of:• AED 800,000• 15% of fixed annual overheads In all other instances, the higher of:• AED 1,500,000• 25% of fixed annual overheads |
| Lending and Borrowing Services | The higher of:• AED 500,000• 25% of fixed annual overheads |
| Virtual Asset Management and Investment Services | If the VASP is collaborating with a VARA licensed VASP to provide Custody Services or otherwise approved by VARA, the higher of:• AED 280,000• 15% of fixed annual overheads In all other instances, the higher of:• AED 500,000• 25% of fixed annual overheads |
| Virtual Asset Transfer and Settlement Services | The higher of:• AED 500,000• 25% of fixed annual overheads |
Capital Requirements and Fees
VASPs must maintain specific paid-up capital based on their activities. Annual fees include supervision fees and renewal fees for legal entities.
Obtaining a VASP License
The process of obtaining a VASP license involves several steps:
- Contact VARA: Initiate contact with VARA to discuss your business model and activities.
- Select Activities: Choose the virtual asset activities that align with your business.
- Prepare Documentation: Gather the necessary documents for the application.
- Submit Application: Submit the completed application to VARA.
- Awaiting Approval: The approval process may vary depending on the complexity of your application.
International Fintech Business (IFB) can help you enter the fintech industry. We can help you establish a VASP in Dubai or buy an existing company. Our experts can help answer any questions you may have. Contact us today!
