How to Start a Virtual Assets Lending Business in Dubai

Dubai has positioned itself as one of the few jurisdictions globally where virtual assets lending is a licensed, regulated commercial activity — not a grey area. While most markets still wrestle with classification, the UAE has built a dedicated regulatory architecture that gives operators clarity, credibility, and a compliant path to market.

This guide covers what activity code 6619.86 entails, who regulates it, and how to set up a virtual assets lending and borrowing business via Meydan Free Zone.

What Virtual Assets Lending and Borrowing Services Actually Covers

Activity code 6619.86 — Virtual Assets Lending and Borrowing Services — sits within ISIC division 6619, which covers auxiliary financial services not classified elsewhere. In practical terms, this means facilitating crypto-collateralised loans, operating yield-generating lending pools, and enabling clients to borrow against their digital asset holdings without liquidating positions.

The activity spans two broad operational models. A custodial model involves the operator holding or controlling the borrower's digital assets as collateral during the loan period. A non-custodial model uses smart contract protocols to lock collateral without the operator taking direct custody — a distinction that carries significant compliance implications.

Typical products under this licence include over-collateralised loans (where borrowers pledge crypto worth more than the loan value), institutional lending desks serving family offices and trading firms, and retail-facing borrowing platforms. Dubai classifies this under financial auxiliary services because the operator is not a direct lender in the traditional banking sense — it facilitates, intermediates, or manages the lending infrastructure.

Regulatory Landscape in the UAE

The primary regulator for virtual asset activities in Dubai is the Virtual Assets Regulatory Authority (VARA). Established under Law No. 4 of 2022, VARA has jurisdiction over all virtual asset service providers operating in or from Dubai, excluding the DIFC. For lending and borrowing specifically, VARA has published a dedicated rulebook that operators must align with before going live.

The Securities and Commodities Authority (SCA) retains oversight where lending products touch instruments that resemble securities or investment contracts. Operators structuring yield products or tokenised debt instruments should seek SCA guidance in parallel with VARA approval.

The Central Bank of the UAE does not directly licence virtual asset lenders, but its guidance on stored value and payment-adjacent products is relevant where fiat conversion or stablecoin settlement is involved.

AML/CFT compliance is non-negotiable. UAE Federal Decree-Law No. 20 of 2018 on anti-money laundering applies in full, and virtual asset firms are subject to enhanced due diligence requirements, transaction monitoring, and suspicious activity reporting obligations.

VARA Licensing Requirements

VARA's fit-and-proper criteria apply to all principals, directors, and beneficial owners. Minimum capital requirements vary by activity type and scale, but lending operations typically require a higher threshold than advisory or broker activities. Operators must demonstrate robust policies covering custody arrangements, risk management frameworks, client disclosure standards, and collateral liquidation procedures. A compliance officer with relevant virtual asset experience is mandatory from the outset.

Market Opportunity and Target Customers

The UAE has a substantial and growing base of institutional investors, high-net-worth individuals, and crypto-native businesses holding significant digital asset positions. Many seek liquidity — capital to deploy into real estate, operating businesses, or further investment — without triggering a taxable disposal or losing long-term exposure. Virtual assets lending serves that need directly.

Regional demand comes from traders requiring short-term capital, family offices managing multi-asset portfolios, and crypto businesses needing working capital against treasury holdings. Dubai's geographic position as a bridge between Asian and European capital flows gives operators here access to a client base that few other jurisdictions can match.

The broader context supports this: the UAE's fintech and virtual asset sector continues to attract significant capital and talent, with Invest in Dubai actively promoting the emirate as a digital economy hub. For a well-structured lending operation, the addressable market is both large and underserved by compliant providers.

Setting Up via Meydan Free Zone: Step-by-Step

Meydan Free Zone supports activity code 6619.86 and provides a structured path to incorporation for financial services operators. The process runs as follows:

• Select your activity and confirm scope. Identify 6619.86 as your primary activity. Confirm with Meydan's team whether any ancillary activities — such as custody or exchange — require separate licensing.
• Choose your legal structure. A Free Zone Limited Liability Company (FZ-LLC) is the standard structure for financial services operations. It provides liability separation and is recognised by VARA for licensing purposes.
• Prepare and submit incorporation documents. This includes passport copies, proof of address, a detailed business plan, and a compliance framework document. VARA will scrutinise the business plan closely, so it should reflect operational reality, not aspirations.
• Obtain your Meydan Free Zone trade licence. This is issued once incorporation documents are approved. The trade licence establishes your legal entity and is a prerequisite for the VARA application.
• Apply for VARA operational licence. Submit the VARA application with your trade licence, compliance policies, and evidence of capital adequacy. VARA may request interviews with principals during assessment.
• Open a corporate bank account. Virtual asset firms face heightened due diligence from UAE banks. Prepare a comprehensive KYB package including your business plan, source of funds documentation, and compliance policies. Some operators work with specialist banking partners familiar with the sector.
• Arrange visas and office space. Meydan Free Zone offers flexi-desk and dedicated office options. Visa allocations are tied to your chosen package, covering founders, directors, and key staff.

Conclusion

Virtual assets lending in Dubai is a viable, licensed business activity — but it demands regulatory rigour from day one. The framework exists, the market is active, and the demand from institutional and HNW clients is real. What separates operators who succeed from those who stall is preparation: a credible compliance framework, adequate capital, and a clear understanding of VARA's expectations before the first application is filed.

Meydan Free Zone provides a credible and commercially practical base for setting up this activity, with direct access to the licensing pathway and the operational infrastructure to support a regulated financial services business. Speak with the Meydan Free Zone team to confirm your activity scope and begin the licence application process.

References

• Statista (statista.com)
• Central Bank of the UAE (centralbank.ae)
• Securities and Commodities Authority (SCA) (sca.gov.ae)
• Invest in Dubai (investindubai.gov.ae)