Managing someone else’s crypto portfolio in Dubai is a regulated activity. The same applies if your company makes investment decisions for clients, administers their virtual assets or takes responsibility for staking those assets.
For these activities, you may need a VARA Management and Investment Services License before taking on clients.
The Virtual Assets Regulatory Authority, or VARA, regulates virtual asset businesses operating in or from Dubai, except those established within the Dubai International Financial Centre. Dubai’s virtual asset law applies to mainland Dubai and its other free zones.
What Is a VARA Management and Investment Services License?
VARA defines VA Management and Investment Services as acting for another entity as an agent or fiduciary, or otherwise taking responsibility for the management, administration or disposal of that entity’s virtual assets.
The definition specifically includes investment management and managing virtual assets. It can also cover taking responsibility for staking virtual assets to earn validator, node operator or similar protocol rewards.
In practical terms, this category may apply if your Dubai company manages crypto portfolios, makes investment decisions involving client virtual assets or operates certain managed staking services.
This is different from simply advising a client. If you only give virtual asset recommendations without taking responsibility for managing the assets, VARA’s Advisory Services category may be more relevant.
It is also separate from proprietary trading. VARA states that licensed VASPs cannot use their regulated licence to trade their own or their group’s portfolio. Proprietary trading follows a separate regulatory route.
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Where Does the VARA Licence Apply?
VARA regulates virtual asset activities conducted in or from Dubai, including Dubai mainland and free zones outside DIFC.
Applications are submitted through the Dubai Department of Economy and Tourism for a mainland company or through the relevant Dubai free-zone authority.
If you are still deciding where to establish the company, Nexture’s Dubai mainland vs free zone comparison can help you understand the commercial differences.
Your choice of free zone does not remove the need for VARA approval where the activity falls within VARA’s regulatory scope.
VARA Management and Investment Services License Requirements
Getting incorporated is only one part of the process. VARA reviews the people behind the company, its finances, operating model, technology and controls.
Requirement | Current VARA position |
Dubai legal entity | Applicant must operate through an eligible legal entity established in Dubai |
Physical presence | A private office in Dubai is required |
Responsible Individuals | Two senior full-time individuals approved by VARA |
Paid-up capital | Starts from the higher of AED 280,000 or 15% of fixed annual overheads in qualifying custody arrangements |
Compliance framework | Policies for AML/CFT, compliance, risk, client protection and governance |
Technology controls | Cybersecurity, data protection and operational systems must meet VARA rules |
Client controls | Suitability checks, agreements, reporting and asset-management procedures are required |
Insurance | Professional indemnity, directors’ and officers’ and other applicable cover |
The regulator also requires Management and Investment Services providers to maintain a private office, although VARA does not prescribe a minimum floor area.
Senior Personnel
A VASP must appoint two Responsible Individuals. They must be full-time employees, meet VARA’s fit-and-proper standards and be UAE residents or UAE passport holders.
VARA also requires suitable compliance and AML functions. Its rules state that the Compliance Officer must have at least five years of relevant compliance experience. The Money Laundering Reporting Officer must have at least two years of AML/CFT experience.
Your management team therefore needs genuine regulated-sector capability. A nominal appointment with little relevant experience can create problems during the application review.
VARA Management and Investment Services License Fees
The regulatory fees are substantial, so they should be included in your budget before you start incorporating the company.
Cost | Amount |
VARA licence application fee | AED 100,000 |
Annual supervision fee | AED 200,000 |
Application + first-year supervision | AED 300,000 |
Additional regulated activity | Extension fee based on VARA’s multi-activity fee rules |
VARA’s current fee schedule sets the application fee for VA Management and Investment Services at AED 100,000 and the annual supervision fee at AED 200,000.
These figures do not include company incorporation, free-zone or DET fees, office rental, employee visas, professional advisers, technology, insurance, audits or banking costs.
Minimum Capital Requirements
Capital is one of the most important numbers to check before applying.
For VA Management and Investment Services using a VARA-licensed custody provider, or another custody arrangement approved during licensing, the minimum paid-up capital is the higher of:
AED 280,000 or 15% of fixed annual overheads.
In other cases, the requirement increases to the higher of: AED 500,000 or 25% of fixed annual overheads.
Suppose your applicable fixed annual overhead calculation results in AED 2 million.
At 15%, the percentage-based requirement would be AED 300,000. Since that is above AED 280,000, your capital requirement would be AED 300,000 under the qualifying custody route. If the 25% test applied instead, the calculation would produce AED 500,000.
VARA also requires VASPs to maintain net liquid assets of at least 1.2 times monthly operating expenses.
Capital therefore should not be confused with the AED 300,000 application and first-year supervision charges. They are separate requirements.
Documents Required for the VARA Application
VARA describes its published document list as non-exhaustive, meaning it can request further evidence depending on your structure and business model.
Typical documents include the incorporation certificate, UBO information, source-of-funds evidence, organisational structure, governance framework, regulatory business plan, financial projections, financial statements, proof of paid-up capital, insurance documents, key personnel CVs and passports, succession arrangements and a wind-down plan.
You should also expect detailed compliance, AML/CFT, technology, information security, outsourcing, client protection and risk-management documentation.
A generic business plan written for ordinary company formation is unlikely to be enough. Your regulatory business plan should explain exactly how client assets move, who makes investment decisions, which custody providers you use and how the business earns revenue.
How to Apply for the VARA Management and Investment Services License
VARA uses a two-stage licensing process. VARA’s official licence application page explains the current route.
Define your regulated activity. Map exactly what the company will do, including portfolio management, staking, client instructions, custody relationships and any other virtual asset services.
Choose the Dubai entity and commercial licensor. You can apply through DET or an eligible Dubai free zone outside DIFC. Some businesses consider zones such as DMCC or DWTC depending on their commercial needs.
Submit the Initial Disclosure Questionnaire. The IDQ goes through DET or the selected free zone. VARA may also request your business plan, ownership details and senior management information.
Pay the initial application amount. VARA states that the amount paid to start the review is typically 50% of the licence application fee.
Receive Approval to Incorporate. The ATI lets you establish the legal entity and complete operational preparations such as office rental, hiring and systems. It does not authorise you to provide virtual asset services.
Complete the full VASP application. VARA reviews the detailed regulatory submission and may hold meetings or interviews and request additional documents.
Pay the remaining application fee and first-year supervision fee. Once VARA is satisfied, it may issue the VASP Licence, sometimes with specific operating conditions.
You should not advertise yourself as an authorised asset manager or serve clients until the full VASP licence allows you to operate.
We’ll model the requirements and send back a single-page breakdown within 24 hours.
Rules After You Receive the Licence
Approval brings ongoing obligations.
VARA requires firms providing Management and Investment Services to assess client suitability. Where personal recommendations are involved, the firm must consider the client’s investment experience, objectives, risk tolerance, time horizon and financial ability to absorb major losses. Relevant information must be kept for at least eight years.
Clients must receive written statements at least monthly showing account value, relevant transactions and changes in the amount and valuation of their virtual assets. Assets under management must also undergo ongoing independent valuation.
You cannot freely rehypothecate client virtual assets. VARA requires explicit prior client consent. The VASP must also act only under valid authority or client instructions.
Fees charged against managed assets must be permitted by the client agreement. VARA also requires at least 90 calendar days' written notice before introducing certain new fees or increasing existing charges.
Risk controls continue after launch. Liquidity and market risks must be regularly monitored and tested, with the related risk-management and due-diligence arrangements subject to independent third-party audit.
Can the Licence Cover Staking?
Yes, depending on how your business is structured.
VARA’s definition specifically includes taking responsibility for staking virtual assets for the purpose of earning validator, node operator or similar protocol rewards.
The client agreement needs to address relevant rights, asset use and staking arrangements. Marketing must also describe staking rewards accurately. A VASP cannot present payments as genuine protocol staking rewards unless the payments actually originate from those rewards.
How Long Does VARA Licensing Take?
VARA does not publish one fixed approval period for every Management and Investment Services application.
Timing depends heavily on your ownership structure, business model, senior staff, documentation, custody setup, technology and how quickly you answer regulatory questions.
A complete submission will usually progress more smoothly than an application where the operating model is still being developed during regulatory review.
Conclusion
A VARA Management and Investment Services License is designed for businesses that take real responsibility for managing another party’s virtual assets. It can cover portfolio management and certain staking models, but it comes with detailed financial and operational requirements.
The headline VARA cost is currently AED 100,000 for the application and AED 200,000 per year for supervision. Paid-up capital can start at the higher of AED 280,000 or 15% of annual fixed overheads where an approved custody arrangement is used. Otherwise, the higher of AED 500,000 or 25% test applies.
Before filing the IDQ, map your activity carefully. Your custody setup, client model, staffing and related virtual asset services can change the licence scope and the amount of capital you need.
You can check the current regulated categories on VARA’s licensed activities page and verify authorised firms through the VARA Public Register.
Frequently Asked Questions
What is the VARA Management and Investment Services License fee?
The application fee is AED 100,000 and the annual supervision fee is AED 200,000. This puts the application and first-year VARA supervision charges at AED 300,000 before capital and other setup expenses.
How much capital is required?
With a VARA-licensed custodian or another custody arrangement approved during licensing, the requirement is the higher of AED 280,000 or 15% of fixed annual overheads. In other cases, it is the higher of AED 500,000 or 25% of fixed annual overheads.
Do I need an office in Dubai?
Yes. VARA requires Management and Investment Services VASPs to maintain a physical presence and private office in Dubai. VARA itself does not specify a minimum office size.
Can this licence cover crypto portfolio management?
Yes. Investment management and management of virtual assets fall within VARA’s definition of VA Management and Investment Services.
Can a company manage staking under this licence?
Certain staking activities can fall within this category when the company takes responsibility for staking clients’ virtual assets. The operating model, custody arrangement and client agreement still need to meet the applicable VARA rules.
Can I start serving customers after receiving Approval to Incorporate?
No. The ATI allows you to complete incorporation and operational preparations. VARA states that the company cannot conduct regulated virtual asset activities until it receives the full VASP Licence.
