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General Questions

How many shareholders will be allowed on the license?

A maximum of 50 shareholders are allowed on a license.

A maximum of 4 directors are allowed on a license.

  • Company Documentation of parent company (Certificate of Incorporation, Certificate of Incumbency, Memorandum and Articles of Association, Board Resolution, etc.)
  • Passport copies of owners and managers
  • Board Resolution indicating it has been resolved to open a branch office in “Meydan – Free Zone Authority” – original required signed and stamped (contact us for a draft of the same).
  • When a shareholder is a company entity, the Board Resolution should state the following as an example – “XYZ Company to take a 50% stake in new company ABC LLC to be formed in “Meydan – Free Zone Authority” – original required signed and stamped (contact us for a draft of the same).
  • The Board Resolution should also include the appointed Manager(s)/Shareholder(s)/Director(s) of the branch or new LLC.

Yes, you can acquire a 0-visa license at Meydan Free Zone. This includes a Lease Agreement, LLC-FZ Trade License that includes three Groups of business activities.

We suggest a capital of 100,000 AED. Please note we can’t specify the share capital for the client.

You can choose three Groups of business activities.

You are eligible for an Investor/Partner visa if you have invested AED 50,000 share capital or more in a company. If you are not a sole shareholder in the company, then you must apply for a Partner visa. However, you should apply for an Investor visa if you are the sole shareholder.

The maximum validity for the Meydan Free Zone license is up to 10 years.

A company can have only one manager on the license but can appoint various other field managers, e.g., Sales manager, Marketing manager, etc.

  • Certificate of Formation
  • Share REGISTER
  • Business License
  • Lease Agreement
  • Memorandum Of Association

Yes, You can apply for a visa after the incorporation of my company, provided you have the immigration card and visa allocation.

UBO

What is an Ultimate Beneficial Owner (UBO)?
The natural person who ultimately owns or controls the Legal Person, whether directly or through a chain of ownership or control or any-other indirect means, and also the natural person on whose behalf the transactions are being conducted or who exercises ultimate control over a legal person, as defined in Article (5) of Cabinet Decision No. (58) of 2020 Regulating the Beneficial Owner Procedures.

Cabinet Resolution No. (53) of 2021 Concerning the Administrative Penalties against Violators of The Provisions of the Cabinet Resolution No. (58) of 2020 Concerning the Regulation of Beneficial Owner Procedures.

Yes, all Licensees are required to create and maintain a record of the UBO, Partners or Shareholders as per Cabinet Resolution No. (53) of 2021 Concerning the Administrative Penalties against Violators of The Provisions of the Cabinet Resolution No. (58) of 2020 Concerning the Regulation of Beneficial Owner Procedures..

The Register of UBO includes data in respect of the UBO and must be created and maintained, either as a hard or soft copy.

The Register of UBO is to be created within (60) sixty days from the date of promulgation or the date the Legal Person comes into existence. The Legal Person shall update and record any changes to the data contained in the Register of Beneficial Owner within (15) fifteen days of becoming aware of such change.

  • Full name, nationality, date and place of birth.
  • Residential address or the address which the notices shall be sent on it, by virtue of this Decision.
  • Number of passport or identity card, the country of issuance, date of issuance and expiry.
  • Basis and date on which the person became a Beneficial Owner of the Legal Person.
  • Date on which the person ceased to be a Beneficial Owner of the Legal Person.

The Register of Partner or Shareholders includes data in respect of each Partner or Shareholder and must be created and maintained, either as a hard or soft copy.

  • Number of shares held by each of them along with their categories and associated voting rights.
  • Date on which such partner or shareholder acquire that capacity in the Legal Person.
  • In case of natural partners or shareholders: the full name as it appears on the identity card or the passport, nationality, address, place of birth, name and address of employer and a true copy of the valid passport or ID.
  • In case of corporate partners or shareholders: the data stated in Clause (1) of Article (4) of Cabinet Decision No. (58) of 2020 Regulating the Beneficial Owner Procedures.

As per Cabinet Resolution (53) of 2021 Administrative Penalties for Violators of the Provisions of the Cabinet Resolution (58) of 2020 Regulating Beneficial Owner Procedures, the penalties can depend on the clause breached and include a penalty fine and license suspension.

If the UBO is working for another company, the Licensee can include the company name and address, if not, the Licensee can include the name and address for the company registered in Meydan Free Zone.

Yes, Licensees can find a Registry Template on the Meydan Free Zone website under the Compliance – UBO section.

GoAML

What is goAML?

The goAML system was developed by the United Nations Office on Drugs and Crime (UNODC) to combat money laundering and the financing of terrorism. It is considered an integrated system used by the Financial Intelligence Unit (FIU) to receive, analyse and distribute suspicious transaction reports (STRs) in a fast and efficient manner. A large number of financial intelligence units worldwide are currently using it, and the United Arab Emirates is the first Gulf country to apply this modern system.

Licensees can register using the following link:

https://services.cbuae.gov.ae

All Designated Non-Financial Businesses and Professions (DNFBPs) must register on the goAML portal. Please read your Trade/Commercial license and complete the DNFBP questionnaire on the MOE website to help determine if you are a DNFBP or not.

  • The first stage is the registration in the protection system, Services Access Control Manager (SACM) of goAML portal.
  • The second stage is the registration in the goAML system. 

To open the goAML portal, you need to pass through the SACM portal by putting the username that you will obtain from the registration stage of the SACM protection system and the password from the Google Authenticator application.

SACM can be accessed at the following link:
 https://eservices.centralbank.ae/sacm

  • Authorisation letter from the institution you represent 
  • A copy of your passport, resident VISA, Emirates ID
  • A copy of the commercial trade license (for companies)

Download the “Google Authenticator” application on your phone. (This application contains the password for the SACM protection system, which is a password that changes every minute)

The UAE Financial Intelligence Unit (FIU) analyses suspicious transactions and activities that may involve money laundering, terrorism financing and related criminal activities, based on data and reports from financial institutions (FIs) and designated non-financial business and professions (DNFBPs) that collaborate and share knowledge to detect and act against such activities.

  • Real estate agents
  • Dealers in precious metals or precious stones
  • Dealers in any saleable item of a price equal to or greater than USD 15,000
  • Lawyers, notaries, other independent legal professionals and accountants. This refers to sole practitioners, partners or employed professionals within professional firms. It is not meant to refer to internal professionals that are employees of other types of businesses, nor to professionals working for government agencies, who may already be subject to AML/CFT measures
  • Trust and Company Service Providers. This refers to all persons or businesses that are not covered elsewhere under these Recommendations, and which as a business, provide any of the following services to third parties:
    • acting as a formation agent of legal persons
    • acting as (or arranging for another person to act as) a director or secretary of a company, a partner of a partnership, or a similar position in relation to other legal persons
    • providing a registered office, business address or accommodation, correspondence or administrative address for a company, a partnership or any other legal person or arrangement;
    • acting as (or arranging for another person to act as) a trustee of an express trust or performing the equivalent function for another form of legal arrangement
    • acting as (or arranging for another person to act as) a nominee shareholder for another person.
  • Identifying and assessing ML/FT risks 
  • Establishing, documenting, and updating policies and procedures to mitigate the identified ML/FT risks 
  • Maintaining adequate risk-based customer due-diligence (CDD) and ongoing monitoring procedures 
  • Identifying and reporting suspicious transactions 
  • Putting in place an adequate governance framework for AML/CFT, including appointing an AML/CFT Compliance Officer, and ensuring adequate staff screening and training
  • Maintaining adequate records 
  • Complying with the directives of the Competent Authorities of the State in relation to the United Nations Security Council resolutions.

For all IT and technical issues, send an email to
goAML@uaefiu.gov.ae 

ESR

What are Economic Substance Regulations (ESR)?
As a result of European Commission concerns, the United Arab Emirates (UAE) was added to the European Union’s list of non-cooperative tax jurisdictions. ESR effectively imposes a requirement for UAE entities (including offshore companies and branches of local and foreign companies) that carry out and earn income from any of the Relevant Activities to maintain economic substance in the UAE specific to each Relevant Activity. Annual filing requirements must be met or organizations risk penalties for non-compliance.

The Regulations apply to Licensees that carry out any of the following Relevant Activities.

  • Banking Businesses
  • Insurance Businesses
  • Investment Fund Management Businesses
  • Lease-Finance Businesses
  • Headquarter Businesses
  • Shipping Businesses
  • Holding Company Businesses
  • Intellectual Property Businesses
  • Distribution and Service center Businesses.

The ESR Portal can be accessed through the MoF Economic Substance Webpage. To access the Portal, the entity must have an existing MOF corporate account, and use its credentials. If the entity is not registered as a corporate user, it can create an account through the MOF registration page.

Licensees and Exempted Licensees that undertake a Relevant Activity (irrespective of whether the Licensee or exempt Licensee has earned income from the Relevant Activity during the financial period) are required to file a Notification within six months from the end of the relevant financial period. All Notifications must be submitted on the Ministry of Finance filing portal.

No. Whilst the commercial license may indeed state the Relevant Activity, a ‘substance over form’ approach must be used to determine whether a Licensee undertakes a Relevant Activity and is within the scope of the Regulations. This means looking beyond what is stated on the commercial licence to the activities actually undertaken by the Licensee during a financial period. For example, and company with General Trading listed on the commercial license may engage in ESR Shipping Business Relevant Activities if products are being shipped between jurisdictions.

Notifications

A maximum period of 6 months is granted from the end of the fiscal year.

Economic Substance Reports

A maximum period of 12 months is granted from the end of the fiscal year.

  • Failure to submit a Notification: AED 20k

  • Failure to submit an Economic Substance Report:

    • Penalty of AED 50k; and
    • Deemed failure to demonstrate economic substance in the UAE

  • Failure to provide accurate or complete information:

    • Penalty of AED 50k; and
    • Deemed failure to demonstrate economic substance in the UAE

 

  • Failure to demonstrate sufficient economic substance in the UAE for the relevant Financial Year:

    • First failure:
      • Penalty of AED 50k; and
      • Information exchange with foreign competent authority of:
        • 1) parent company,
        • 2) ultimate parent company, and
        • 3) ultimate beneficial owner.

    • Second consecutive instance of failure:
      • Information exchange with foreign competent authority of:
        • 1) parent company,
        • 2) ultimate parent company, and
        • 3) ultimate beneficial owner; and
      • Penalty of AED 400k; and
      • Trade / commercial licence could be; suspended, withdrawn or not renewed.

Yes, Businesses that carry out a Relevant Activity during a financial period are required to submit a Notification irrespective of whether they earned income from that Relevant Activity.

Only Licensees that earn income from a Relevant Activity during the relevant financial period and that are not exempt from the Regulations are required to demonstrate economic substance in the UAE and file an Economic Substance Report. Economic Substance Reports must be filed within 12 months from the end of the relevant financial period.

Yes, if the Licensee is an Exempted Licensee or does not earn income from its Relevant Activity. In these cases, there is no requirement to file an Economic Substance Report. The Economic Substance Filing Portal will automatically assess whether you need to file an Economic Substance Report based on your Notification, and only create a Report if you are required to submit one.

Yes, a Licensee will be required to submit a Notification and Economic Substance Report (if applicable) for each financial period in which it undertook a Relevant Activity.

You can email us at: moeesr@economy.ae

VARA Regulations & Licensing

What is the VARA Virtual Assets and Related Activities Regulations?

The VARA Virtual Assets and Related Activities Regulations 2023 is a bespoke Virtual Assets regulatory regime, which aims to provide VASPs with clear, comprehensive rules for offering Virtual Asset services and activities to the market.

The VARA Virtual Assets and Related Activities Regulations 2023 with the accompanying Rulebooks has been published on www.vara.ae under the ‘Regulations’ section.

Please see Public Register on www.vara.ae under ‘VARA Licensing’ Section.

VARA aims to foster consumer protection with a regulatory framework.

1. Various License categories are available based on the activity that the VASP intends to offer the market, noting that each activity is ‘discrete’ and hence must be applied for explicitly, based on the requirements for each as stipulated by VARA:

  • VA Advisory Services
  • VA Broker-Dealer Services
  • VA Custody Services
  • VA Exchange Services
  • VA Lending and Borrowing Services
  • VA Management and Investment Services
  • VA Transfer and Settlement Services

2. Additionally, issuers of Virtual Assets will have to obtain approval from VARA under the VA Issuance Rulebook.

3. Key Notes:

No VA activity is ‘exempt’ from regulatory supervision; as such any VA service or activity requires a VARA licence, registration or No Objection Certificate [NOC].

  1. VA Proprietary Trading is an activity that requires an No Objection Certificate from VARA [NoC].
  2. VA Proprietary Trading above certain trading volumes, is an activity that must be registered with VARA to confirm that the activity may be undertaken with regulatory oversight without a VA Licence;

You may apply for a VARA licence through Department of Economy and Tourism [Mainland], or any Free Zone except DIFC.

There is a two-stage approval process.

Stage 1 – Initial Approval – VASPs are required to fill an Initial Disclosure Questionnaire [IDQ] with DET or a FZA, which will be screened by the commercial licensing bodies, then transferred to VARA for assessment.

  • Based on the assessment, VASPs may be rejected or additional information may be requested
  • In case the VASP is given an initial approval, the VASP may carry on its readiness activities i.e. setting up office, client money account, bank account, hiring etc. at its own risk and in alignment with the commercial licensor in the Emirate of Dubai
  • The VASP is then required to satisfy detailed licencing requirements as set out by VARA based on the VA activity the VASP proposes to carry out.

Stage 2 – Upon completion of such requirements, the VASP can then apply for the full licence approval [which may include certain conditions and restrictions such as access to retail customers].

VASPs may be rejected if they are unable to fulfil VARA licensing requirements

Please refer to Virtual Assets and Related Activities Regulations 2023 page 36, published on www.vara.ae

VASPs can provide services to retail customers upon approval of an FMP Licence and following payment of the associated licensing fees. Certain VASPs may be approved to only provide services to qualified investors and institutional clients, at VARA’s discretion.

  1. VASP’s can apply for a VA licence through DET for mainland, and preferred Free Zone in Dubai.
  2. VARA’s approval is required to obtain a VA licence in the Emirate of Dubai for mainland and Free Zones, except [DIFC].

VARA is accepting all nationalities who comply with regulations to provide VA services in Dubai. Any entity wishing to undertake/provide regulated virtual asset activities and services across the Emirate of Dubai must apply to VARA licence.

Finalisation of the licensing application process is dependent on the completeness and accuracy of the required documentation and evidence submitted to VARA.

  1. VARA requires physical presence of the entity to be in Dubai.
  2. Companies need to ensure that their Senior Management team comprises suitably qualified individuals, and that the company appoints two ‘Responsible Individuals’ (RIs) that oversee compliance and who are based in the UAE.
  3. Each Responsible Individual shall be a full-time employee of the VASP; a Fit and Proper Person; a resident of the UAE; and notified to, and approved by, VARA during the licensing process. Particular compliance roles that need to be appointed within the company include: a Chief Information Security Officer, and a Data Protection Officer, along with a Money Laundering Risk Officer; and a Compliance Officer. The Compliance Officer must be a fit and proper resident of the UAE. Note that the Compliance Officer cannot be the same person as the Chief Information Security Officer, and cannot sit on the Board, as the Compliance Officer and any head of the internal audit function should report directly to the Board.

A Limited Liability Company [LLC] or FZ CO is preferable for this sector. Sole proprietorship is not allowed.

  1. VA licence is an annual licence.
  2. The renewal is for 12 months.
  3. You will be notified for the renewal 90 days in advance.
  4. An Annual supervision Fees is required to be paid at the time of renewal.

A comprehensive checklist of document requirements for successful submission of an FMP License Application is available for your reference, this checklist captures and defines requirements for documents such as, but not limited to:

  • Regulatory Business Plan
  • Customer journey
  • Relationship / Accounts with local banks
  • Financial projections & Group-level financial statements
  • Governance framework
  • Organizational Structure
  • Conflicts of Interest policy
  • Outsourcing policy & agreements
  • AML/CFT policy and proceduresAnti- Bribery and Corruption (ABC) policy and procedures
  • Compliance manual
  • Enterprise Risk Management framework and methodology
  • Terms and Conditions (also referred to as Terms of Service, Terms of Use etc.) on client agreements
  • VA listing policy (where applicable)
  • Business Continuity Management & IT Disaster Recovery Plan
  • UAE public Keys and wallet addresses (Applicable for Exchange / Custodian / Wallet Providers Financial Services and Lending only)

VARA requires physical presence to conduct VA activities from Dubai.

The below regulated VA activities require a private office to conduct business:

  • VA Broker-Dealer Services
  • VA Custody Services
  • VA Exchange Services
  • VA Lending and Borrowing Services

There is no size/ spacing requirement from VARA. Please check with your commercial licensor [DET/ FZ] on spacing requirements as per your staffing needs.

Licence Application Fees are due following issuance of initial pre-operational licensing letter by VARA, while Licence Extension and Annual Supervision Fees will be due yearly. license fee

Capital Requirement

VASP’s are required to pay 50% upfront non-refundable VA licencing fees at the stage of initial approval from VARA. the fees is required to be paid directly to VARA online or through bank transfer.

The remaining licening fees + Annual Supervision Fees is required to be paid directly to VARA through bank transfer or online VARA portal [at the final approval stage].

Below are the details of the bank account.:
Beneficiary A/C Name: VIRTUAL ASSETS REGULATORY AUTHORITY.
IBAN: AE380260001015818053501
Bank: Emirates NBD, Dubai, U.A.E.
Swift: EBILAEAD

VASP’s are required to pay 50% upfront non-refundable VA licencing fees prior to submitting your full application [after receiving the Application Acknowledgment Fees [AAN]].

Fees are required to be paid directly to VARA either through bank transfer or online VARA portal.

The remaining licening fees + Annual Supervision Fees is required to be paid directly to VARA through bank transfer or online VARA portal.

Below are the details of the bank account.

Beneficiary A/C Name: VIRTUAL ASSETS REGULATORY AUTHORITY.
IBAN: AE380260001015818053501
Bank: Emirates NBD, Dubai, U.A.E.
Swift: EBILAEAD

Existing VASPs

Can I apply for a Minimum Viable Product [MVP] Licence?
MVP licence applications are no longer being accepted by VARA. This was a time-bound programme for the period prior to VARA Regulations being published – which are now live as of 07.Feb.2023.
VASPs that are already in the MVP licensing process will need to confirm with VARA if they are required to continue with the MVP process or transition to the FMP application – noting that there will be no redundancy of efforts and time for the VASP and the transitions will be seamless. A gap analysis will be provided highlighting aspects that are pending for the VASP to complete the FMP licensing application process – deadline for this application is 30 June 2023.

VASPs will have until 30 June 2023 to complete the FMP licensing application process. VASPs who do not meet this deadline will not be able to commence or continue Virtual Asset Activities in the Emirate. At this stage, VASPs intending to pursue VA services will be required to recommence their application for a market license and can connect with VARA for their situation-specific considerations

1. Enforcement actions will include Warnings, Fines and Penalties [e.g. licence suspensions, or scope of service or market limitations]. 2. VARA will supervise the virtual asset market in the Emirate via on-chain and off-chain methods to ensure compliance with our Regulations and Rulebooks. Failure to comply may result in substantial punitive measures which could include material fines and penalties [including potential entity closure]. 3. All relevant actions are coordinated with relevant government and commercial licensing bodies. More information about VARA’s fines and enforcement can be found at this link: [Download Guidelines]

Entities will be required to hold a VARA Licence or Acknowledgment of Application Notice [AAN] if they carry out any of the following VA activities, namely:

  • VA Advisory Services
  • VA Broker-Dealer Services
  • VA Custody Services
  • VA Exchange Services
  • VA Lending and Borrowing Services
  • VA Management and Investment Services
  • VA Transfer and Settlement Services.

Entities that issue Virtual Assets must seek approval from VARA regarding the issuance of the Virtual Asset. Such entities should also determine if any of their activities relating to the Virtual Assets fall within the categories of VA Activities described above. Note: VA Proprietary Trading is an activity that requires a No Objection Letter [NoC] from VARA.

VA Proprietary Trading above certain trading volumes is an activity that must be registered with VARA to confirm that the activity may be undertaken without a VA Licence. Technology services utilising Distributed Ledger Technology [DLT] will have to determine if they are carrying out any Virtual Asset activity falling within the categories described above, and they may either be licensed or require registration with VARA.

  • Proprietary Traders, who trade their own funds and are not trading it as a service to friends-family and/or third-party mass market – i.e. no clients – are not required to hold a VARA Licence at this time
  • Proprietary Traders by the aforementioned definition – with a cumulative monthly trading volumes above USD 250 Million – regardless of whether it is being undertaken as a business, are required to register with VARA, and will be subject to regulatory oversight
  • As a proprietary trader, should your daily trading volume and fall below the threshold – you are required to declare this status and secure a suitable NOC from VARA to continue providing your services

Distributed Ledger Technology [DLT] Service Providers may be required to hold a VARA Licence at this time if they are providing or carrying out any of the below mentioned VA activities:

  • VA Advisory Services
  • VA Broker-Dealer Services
  • VA Custody Services
  • VA Exchange Services
  • VA Lending and Borrowing Services
  • VA Management and Investment Services
  • VA Transfer and Settlement Services.
  1. This is a broad sector and it is critical to understand exactly which services are being undertaken to respond more comprehensively;
  2. At the first instance, entities offering Metaverse services are generally not required to hold a VARA licence at this time.
  3. If any such entities are conducting VA activities regulated by VARA in and/or from Dubai a VARA FMP licence will be required
  1. Entities that already possess NFT Marketplace commercial licences with Free Zones must obtain the relevant licence from VARA.
  2. NFT Marketplace providers should ensure they register with VARA for an Acknowledgment of Application Notice [AAN] before 30.April.2023.

You may apply for an activity amendment through Department of Economy and Tourism [Mainland], or any Free Zone except DIFC. There is a two-stage process.

  • Stage 1 – Application Acknowledgment Notice [AAN] – VASPs are required to fill an Initial Disclosure Questionnaire [IDQ] with DET or a FZA, which will be screened by the commercial licensing bodies, then transferred to VARA for assessment.
    • Based on the assessment, VASPs may be rejected or additional information may be requested
    • Eligible VASP’s will receive an [AAN].
    • The VASP is then required to satisfy detailed licencing requirements as set out by VARA based on the VA activity the VASP proposes to carry out. •
  • Stage 2 – Upon completion of such requirements, the VASP can then apply for the full licence approval [which may include certain conditions and restrictions such as access to retail customers]. VASPs may be rejected if they are unable to fulfil VARA licensing requirements.

The Deadline to receive the IDQ is 30.April.2023.

Failure to comply with the regulatory framework may result in substantial punitive measures – material fines/penalties including potential firm closure.

VASPs who received [AAN], must complete the full VA licence application and ensure submission by 31.August.2023.

Renewal of Commercial licence for existing legacy who received an AAN [no change in the VA activity applied for], doesn’t need VARA’s approval. However, VARA needs to be notified by DET/ Free zone.

Amendment of licence [change of name/ UBO/ address] of existing legacy [Require VARA Review/ Notification], requires VARA’s approval, as VARA’s will issue an amended AAN to the VASP.

Change of a VA Activity [for legacy] or [Add/ remove] requires VARA Review. A New IDQ is required to be submitted.

Withdraw of Commercial licence [Legacy] requires DET/ Free Zone to notify VARA.

  1. VARA will withdraw its AAN.
  2. VARA will assess customer impact.
  3. VASP is required to return funds/ marketing update/ monitor negative media / financial commitments.

VARA will withdraw the AAN for any establishment that cannot fulfil FMP requirements.

VARA can withdraw the AAN for the below scenarios:

  1. VASP cannot fulfil FMP requirements
  2. VASP conducts illicit activity.
  3. VASP doesn’t fall under VARA regime at this stage.

VARA Marketing Regulations

I am an event organiser, and would like to apply for a virtual assets event permit. How can I apply?

All event organisers are required to apply for events in Dubai through the e-Permit system of the Department of Economy and Tourism.

You may apply for a VA event through the e-Permit system, by selecting the category [VA event].

VARA reminds all concerned parties to confirm their adherence to the VA guidelines on the e-Permit system of the Dubai Government. 4. Failure to comply with VARA’s marketing regulations may result in substantial punitive measures including material fines/penalties and potential entity closure

VARA Activities & their definitions

“Virtual Assets Advisory Services”

means offering, providing or agreeing to provide a personal recommendation to a client, either upon its request, or on the initiative of the Entity providing the recommendation, in respect of one or more actions or transactions relating to any Virtual Assets.

means any of the following –

  • arranging orders for the purchase and/or sale of Virtual Assets between two Entities;
  • soliciting or accepting orders for Virtual Assets, and accepting currency, or other Virtual Assets for such orders;
  • facilitating the matching of transactions in Virtual Assets between buyers and sellers;
  • entering into Virtual Asset transactions as a dealer on behalf of the Entity for its own account;
  • making a market in Virtual Assets using client assets; or
  • providing placement, distribution or other issuance* related services to clients issuing Virtual Assets.

*As per Regulation II – Issuing Virtual Assets, any Entity in the Emirate that Issues a Virtual Asset in the course of a business, must comply with the VA Issuance Rulebook [latest version that is aligned with the issuance date]

means safekeeping Virtual Assets for, or on behalf of, another Entity and acting only on verified instructions from/on behalf of such Entity*. *All VASPs shall be subject to Rules regarding the storage and custody of clients’ Virtual Assets. Only VASPs which segregate each client’s assets in separate VA Wallets will qualify for a Custody Services Licence.

means any of the following –

  • conducting an exchange, trade or conversion between Virtual Assets and currency;
  • conducting an exchange, trade or conversion between one or more Virtual Assets;
  • matching orders between buyers and sellers, and conducting an exchange, trade or conversion between [i] Virtual Assets and currency or [ii] one or more Virtual Assets; or
  • maintaining an order book in furtherance of items [a], [b] or [c] above.

means carrying out a contract under which a Virtual Asset shall be transferred or lent from one or more parties [the Lender(s)] to one or more other party [the Borrower(s)] where the Borrower(s) shall commit to return the same, at the request of the Lender(s), at any time either during or at the end of the period agreed upon, either to its interest or on behalf of others interest.

means acting on behalf of an Entity as an agent, or fiduciary, or otherwise taking responsibility for the management, administration or disposition of that Entity’s Virtual Assets. Examples may include, but shall not be limited to –

  • investment management services or otherwise managing VAs; and
  • taking responsibility for the ‘staking’ of VAs for the purpose of earning fees or other values paid to validators and/or node operators of a ‘proof-of-stake’ DLT. 

means offering, providing or agreeing to provide a personal recommendation to a client, either upon its request, or on the initiative of the Entity providing the recommendation, in respect of one or more actions or transactions relating to any Virtual Assets.

Any Entity in the Emirate that actively invests its own portfolio in Virtual Assets.

VARA Freezones

In case of VASP rejection for final license by VARA what is the action to cancel, suspend revoke? Or keep until expiry and then not renew? What sort of Legal action would be required?

In case of final approval rejection [rejection reasons will be mentioned in the rejection letter], VARA will cancel its initial approval. If the company wishes to re-apply for another VA licence, they will need to go through the process again. In case the company, doenst want to apply for another VA licnece, then the company would need to shut down.

This is up to the free zone itself.

In case of final approval rejection [rejection reasons will be mentioned in the rejection letter], VARA will cancel its initial approval. If the company wishes to re-apply for another VA licence, they will need to go through the process again. In case the company, doesn’t want to apply for another VA licence, then the company would need to shut down.

VARA’s initial approval allows to issue a VA non-operational commercial licence [the licence will have a water mark for attention and a comment saying that its [VA nonoperational and requires to fulfill VARA’s requirements for the final approval].

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