United Arab Emirates Crypto License

Local Entity & Office

A crypto firm must establish a legal entity in the UAE and maintain a physical office presence.

• For VARA, incorporation must occur either on the Dubai mainland or in an approved Free Zone, with a physical office in Dubai (leased or owned).

• For ADGM, the company must be incorporated within ADGM and have premises in Abu Dhabi. The UAE enforces economic substance requirements, expecting genuine local operations and staff—not shell entities.

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Share Capital

Minimum capital requirements vary by license category and regulator.
Under VARA:

• The minimum share capital for an Advisory Services license starts at AED 100,000 (~USD $27,300)

• An Exchange Service license (without using a VARA-licensed custodian) requires AED 1,500,000 (~USD $409,000)

Other license types like Custody, Broker-Dealer, and Lending have tiered capital thresholds ranging approximately from USD $136,000 to $409,000.
In ADGM, capital requirements are even higher—often exceeding USD $2 million for exchange or custody licenses.
All capital must be fully paid-in and held as regulatory capital, usually requiring proof of deposit in a UAE bank account.
 

Fit and Proper Management

All owners, directors, and senior managers must meet “fit and proper” standards.
Regulators will assess integrity, competence, and financial soundness, conducting checks on:

• Criminal history

• Credit standing

• Professional qualifications
  Key individuals (especially directors and the CEO) should have relevant fintech or financial services experience.
  VARA may conduct interviews with key persons. A history of bankruptcy or legal violations can lead to disqualification.
   

Local Directors and Staffing

UAE regulators require local management presence.
For VARA, at least one board member or senior manager must reside in the UAE. Key roles such as the Compliance Officer and MLRO are often required to be UAE-based for effective oversight.
ADGM may mandate two UAE-resident directors for some license categories and encourages local staffing for compliance and technical positions.
Free zones like DMCC may also require a locally resident company manager.

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AML/CFT Compliance Program

Firms must establish a comprehensive AML/CFT program aligned with UAE law and FATF standards.
This includes:

• Appointment of a qualified Compliance Officer/MLRO (approved by VARA or ADGM)

• Written AML/CFT policies

• Customer due diligence procedures

• Ongoing transaction monitoring systems

• Customer data record-keeping

The UAE enforces strict KYC standards and mandates compliance with the Travel Rule (capturing and transmitting sender/recipient information for crypto transfers).
Regular AML training for staff is also required.
 

Risk, Security & Controls

Cybersecurity is a core focus for UAE regulators. Applicants must implement advanced security practices, such as:

• Multi-factor authentication

• Data encryption (at rest and in transit)

• Secure cold storage of crypto assets

• Strong access controls

Applicants should submit an IT security architecture overview, and may need to provide cybersecurity audits or obtain certifications like ISO 27001.
Firms must have business continuity and disaster recovery plans, as well as systems to detect and prevent fraud, including Travel Rule compliance solutions.
 

Initial Disclosures & Final Submission

For VARA, the process starts with submission of an Initial Disclosure Questionnaire (IDQ) that details:

• Founders’ profiles

• Source of funds

• Intended activities

• Outsourcing arrangements

 

The final application must include:

• A detailed Regulatory Business Plan

• Corporate governance structure

• Financial projections

• Evidence of compliance with capital and personnel requirements
   

All documents must be in English and formatted per VARA standards.
ADGM applications require similar content, including a compliance assurance statement and controllers’ details. Application fees—often tens of thousands of USD—are paid at submission.
 

Ongoing Obligations

Once licensed, firms must comply with ongoing regulatory expectations:

• Filing of annual audited financials, quarterly prudential reports (for ADGM), and other documentation

• Payment of annual supervision fees, e.g., ~$50,000 USD/year under VARA

• Onsite inspections by regulators
  Any material business changes—such as new products, token launches, or ownership changes exceeding 10%—require prior regulatory approval.
  Firms may also be required to join industry self-regulatory bodies and must comply with other applicable laws like data protection and Economic Substance Regulations (ESR).
   

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Securing a crypto license in the UAE (whether under VARA or ADGM) entails a phased approval process, substantial capital commitment, strong local presence, and a rigorous compliance framework.
The UAE’s regulatory stance welcomes crypto innovation, but only under stringent licensing criteria, designed to admit only secure, well-capitalized, and compliant operators into the market.