Navigating the UAE’s Virtual Asset Licensing Landscape A Strategic Guide for VASPs

As the United Arab Emirates cements its position as a global crypto hub, Virtual Asset Service Providers (VASPs) eyeing expansion into this dynamic region must understand the regulatory landscape. With multiple regulatory bodies across federal and free zone jurisdictions, getting licensed in the UAE requires a tailored, jurisdiction-specific strategy. At HLS Global UAE, we specialize in simplifying this process end-to-end.

Understanding the UAE’s Regulatory Structure for VASPs

The UAE’s approach to virtual asset regulation is multi-tiered and jurisdiction-specific.

Key Licensing Requirements for VASPs

Across jurisdictions, the licensing requirements typically include:

General Requirements:

• Corporate structure: UAE legal presence (LLC, branch)
• Fit & proper management: Background, financial soundness, and experience
• Capital adequacy: Varies by business model (custody, exchange, broker)
• Technology & Cybersecurity: Robust infrastructure & AML (Anti-Money Laundering) systems, STR/SAR reporting, KYC policies, ongoing monitoring, and independent audit trails

Specifics by Regulator:

1. SCA (Mainland UAE)

   • License categories: Brokerage, Custody, Exchange, Platform Operator
   • Capital Requirement: AED 100,000–1 million plus
   • License Process: Pre-application consultation with the SCA followed by review phase and final grant of license
   • Application fee: AED 55,000–500,000 plus (depending on category)
   • Requires local bank guarantee C insurance in some cases
     
     
2. VARA (Dubai)

• Regulates across 8 activity types (exchange, broker-dealer, custodian) in Dubai World Trade Centre (DWTC) and other non-DIFC Dubai jurisdictions
• 2-step license process: Initial Approval to Incorporate (ATI) to finalize the firm’s legal incorporation and operational setup, followed by the issuance of a full VASP License

• Capital Requirement: AED 100,000-1,500,000
• Application Fees: AED 40,000-100,000 per VA activity; Annual Supervision Fee: AED 80,000-200,000
• Strict reporting, VA risk framework on AML/CFT, and board governance rules
  
  

3. DFSA (DIFC)

• License under the Investment Token and Crypto Token Regime
• Risk-based prudential requirements, technology architecture, plus the VA business plan are essential
• License Process: Authorization Enquiry to be submitted on the DFSA portal, and according to approval thereof, the final application needs to be submitted along with the requisite fee on the portal; Crypto Token recognition request to be submitted separately on the portal
• Application Fee: USD 15,000-70,000 (depending on the activity); Additional Fee: USD 5,000 (for Crypto Token Recognition)
  
  

4.   FSRA (ADGM)

• Regulatory framework recognizes certain virtual assets, including cryptocurrency
• VASP Full License: Permits exchange, broker-dealer, custody, and token issuance; Limited Activity License: For targeted services, such as custody-only or ICO
• Capital: Risk-based (minimum USD 250,000 for VASP custodians)
• License Process: Engagement with FSRA for feedback on business model, followed by submission along with the requisite corporate documents, and finally the grant of license post-review by FSRA (within 3-4 months typically)
• Application fee: USD 20,000–40,000; Annual Supervision: USD 15,000–50,000

5. RAKEZ (RAK DAO)

• Overseen by the RAKEZ, which requires applicants to submit a detailed business plan, a comprehensive AML/CFT framework, and fit-and-proper declarations for senior management
• Two-step license process – Application with the SCA, which entails pre-approval followed by full licensing – typically completed in 6–8
• Application Fee: USD 4,500-9,500 plus applicable SCA license fee for VASP
  
  

Licensing Process Snapshot (Generic Flow)

• Business Scoping C Legal Structure Setup
• Engagement with Regulator (Expression of Interest / Consultation)
• Submission of VASP License Application
• Review, Interviews, & Clarifications
• License Issuance + Go Live Approvals

Timeline: 3 to 9 months, depending on jurisdiction and business complexity.

How HLS Global UAE Helps You Get Licensed – Seamlessly

At HLS-Global UAE, we specialize in end-to-end regulatory licensing and compliance advisory for VASPs. Here’s how we deliver value:

Jurisdiction Mapping: We evaluate your model and identify the most suitable UAE zone and regulator (SCA, VARA, DIFC, ADGM, or RKDAO).

End-to-End Licensing Support: From documentation to regulatory liaison, submission tracking, and handling pre-consultation rounds.

License Documentation: From AML frameworks, business plans, to regulatory compliance – we build compliant and regulator-ready documents.

Post-Licensing Compliance: Ongoing support for transaction monitoring and regulatory updates.

Final Word

The UAE offers a fertile regulatory environment for compliant, growth-focused VASPs. But the complexity lies in picking the right zone and aligning with evolving compliance obligations. With deep legal and regulatory expertise, HLS-Global UAE ensures your crypto venture launches seamlessly – with speed, accuracy, and trust.

Disclaimer: All views expressed in this article are solely for informational purposes and should not be construed as legal advice. This information is for reference only and is bound to change in case of any amendments or changes to applicable laws. We do not assume any responsibility or liability for any errors or omissions in the content of this article, and we do not make any warranties about the completeness, reliability, or accuracy of the information expressed in this article.