How to Apply for a VARA License For New Firms in the UAE?

UAE, as a part of innovative strategy, has been providing multiple opportunities to the businesses to prosper. One such initiative includes the promotion of the usage of virtual assets. The businesses that are interested in trading or carrying out activities related to the virtual assets are provided with the facilities to trade. UAE has understood the need for the innovative shift; hence, in order to enhance and ensure secure transactions, the VARA (Virtual Asset Regulatory Authority) has been formed in order to keep a watch on the virtual asset activities and virtual assets and to regulate the operations related to them.

The businesses eligible for conducting the virtual asset activities require the licenses and other approval from the concerned authorities. In this blog, we will shed light on the certain procedures to be followed by the new firms to get the VARA license.

License Application Procedure for New Firms

In order to get the license, which is also known as the VASP license (Virtual Asset Service Provider), the entities must follow the following procedures. The entities planning to start their virtual asset activities must meet the requirements and procedures in order to get licensed under the VARA. The application process is divided into 2 stages, which are explained below:

Stage 1: Application for Initial Approval

The first stage includes the process of applying for the initial approval for the establishment of a legal entity in order to commence the set-up for the operations, which includes the following:

• The first step includes the submission of the initial disclosure questionnaire to the DET if the firm is based on the mainland or to the Freezone Authority if the firm is based in any of the freezones in the UAE
• The further procedure includes the furnishing of the documentation, which would include the details and blueprint of the business plan along with information on the beneficial owners and the management of the business.
• The next process includes the payment of the fee in order to start the application review, which is usually 50% of the license application fee.
• After the above process, the entities must receive initial approval from the authority in order to confirm the legal incorporation of the business and the setting up of operational infrastructure, including the office set-up and hiring of employees.

During the first stage, the entities are not permitted to carry out any of the virtual asset activities, as if the entities are not performing as per the regulatory framework and if it doesn’t meet the stipulated standards, then it can be revoked by the VARA from carrying out the operations and getting the VASP license.

You can also read: All About VARA Audit in Dubai

Stage 2: Application for VASP License

After getting the initial approval, the entities can now apply for the VASP license. It includes the following steps, which are to be followed:

• Devising and furnishing the documents that are to be provided as per the instructions received by the entity during receipt of the initial approval.
• The next process includes the receiving of any feedback from the VARA during the process of furnishing the documents, which might include the details of the further meetings, interviews, or any further documents that are required.
• The entity is then required to pay the pending application fees and the first year’s supervision fees, if any.
• In the last process, the entity will receive the VASP license, which can enable the entity to start the operations and conduct the virtual asset activities.

What Are the Documents to be Maintained During the License Application?

The multiple documents that are to be maintained and furnished during the VASP license application include the following:

• The certificate of the incorporation of the entity
• The list of ultimate business owners of the business
• The fit and proper confirmations
• The proofs source of funds
• The document related to the organizational structure
• The document related to the Governance Framework
• The local entity website
• The key personal details, such as the job description, CVs, and copies of the passport
• Document of the regulatory business plan
• The financial forecasts
• The financial statements, at group level and at entity level
• The proof pertaining to paid-up capital
• The details related to the available capital locked-up
• Insurance certificates
• The reserve account report
• The documents related to the succession plan
• The documents related to the wind-down plan
• The documents related to associated entity analysis.

Ensure Compliance with VARA Regulations with CDA

CDA, being one of the best accounting and auditing firms in UAE, is known for its custom-tailored premium services for the clients. The professional experts of CDA are well equipped with the latest regulations of the land. The experts can assist the clients in getting the compliance complexities sorted related to the virtual assets and to get ahead of the competitors. The experts can assist the entities dealing with the VA to get the documents sorted and apply for the license easily. Furthermore, our professionals can assist you in gearing up for VARA audits and simplify the procedure for you.

To know more about our services, contact our team now.