DWTC Free Zone in 2026: The Crypto and Fintech Profile and Where It Meets VARA

The Dubai World Trade Centre Free Zone incorporates companies and issues commercial licences, but it does not regulate virtual assets: the regulator is VARA, whose remit covers every free zone in Dubai except the DIFC. A virtual asset business in DWTC needs two licences from two different bodies: an operational licence from the DWTC Authority and a VASP licence from VARA. The detail almost nobody spells out: the DWTC non-operational licence is valid for one year, and if the VARA VASP licence is not obtained within it, the licence is not renewed and the fees paid are forfeited.

Important. Three things that are routinely reported wrongly on this subject, and what each error costs.First: DWTCA has never been a virtual assets regulator. In December 2021 it was announced that DWTC would become a “comprehensive zone and regulator for virtual assets and crypto”, but no instrument was ever issued under that announcement. Ten weeks later, on 28 February 2022, Dubai Law No. 4 of 2022 created VARA. The accurate formulation is “announced but never enacted” — not “repealed” and not “superseded”: there was nothing to repeal. Second, and this is the twist that reframes the whole subject: VARA did not take crypto away from DWTCA — crypto was carved out of DWTCA into a dedicated regulator that is itself attached to DWTCA. Article 4 of Law No. 4 of 2022: “VARA will be affiliated to the DWTC Authority.” Third: as of 1 January 2026 the Securities and Commodities Authority no longer exists in law. Federal Decree-Law No. 32 of 2025 replaced it with the Capital Market Authority, and Article 2(3) substitutes the designation “wherever it appears in any legislation”. Any material today describing VARA’s powers as delegated “by the SCA” under Cabinet Resolution No. 111 of 2022 is using a name that has ceased to exist.

The Legal Framework: Four Layers That Must Not Be Mixed

The subject is governed by four independent layers: the emirate-level constitutive layer, the emirate-level virtual assets regime, the federal financial layer and the federal tax layer. The first creates the zone, the second creates the virtual assets regime, the third determines who supervises the market at large, and the fourth determines what the company pays.

The constitutive layer — Emirate of Dubai:

•          Law No. (9) of 2015 Concerning the Dubai World Trade Centre — issued 11 April 2015, in force on publication in the Official Gazette (Article 35). Article 3 establishes, in one instrument, the DWTC zone, the Dubai World Trade Centre Authority as a public corporation, and the Free Zone within the DWTC. Article 5 sets out DWTCA’s powers, Article 22 removes free zone companies from the reach of Dubai Municipality and the Department of Economic Development, and Article 34 supersedes the earlier Law No. 10 of 2008.

•          Free Zone Rules and Regulations V14 and Free Zone Company Regulations V7 — the zone’s rulebooks in force.

•          Executive Council Resolution No. (11) of 2025 Regulating the Conduct of Free Zone Establishments’ Activities within the Emirate of Dubai — issued 3 March 2025, in force on publication; it governs free zone companies reaching the Dubai mainland market.

The virtual assets layer:

•          Law No. (4) of 2022 Regulating Virtual Assets in the Emirate of Dubai — issued 28 February 2022, in force on publication (Article 28). Article 3 sets the territorial scope, Article 4 establishes VARA, Article 6 confers competence, Article 27 repeals conflicting provisions.

•          Virtual Assets and Related Activities Regulations 2023 in the version dated 19 May 2025, together with VARA’s rulebooks.

•          Regulations on the Marketing of Virtual Assets and Related Activities 2024 — issued 31 August 2024, in force 1 October 2024.

The federal financial layer:

•          Cabinet Resolution No. (111) of 2022 Regulating Virtual Assets and the Related Service Providers — issued 12 December 2022, effective 14 January 2023; it applies across the UAE including free zones, but excludes the Financial Free Zones (Article 3).

•          Cabinet Decision No. (112) of 2022 on delegating competencies; Article 4: VARA exercises them “exclusively within the Emirate of Dubai and the free zones therein”.

•          Cabinet Resolution No. (99) of 2024 on violations and administrative penalties — issued 6 September 2024, effective 16 October 2024.

•          Federal Decree-Law No. (32) of 2025 Regarding the Capital Market Authority — issued 1 October 2025, Official Gazette No. 809 of 14 October 2025, in force 1 January 2026. Its companion is Federal Decree-Law No. (33) of 2025 on the regulation of capital markets, with the same commencement.

•          The Central Bank of the UAE Payment Token Services Regulation, circular C 2/2024, in force 31 August 2024.

•          Federal Decree-Law No. (10) of 2025 on anti-money laundering and combating the financing of terrorism and proliferation financing — issued 30 September 2025, Official Gazette No. 808 of 30 September 2025, in force 14 October 2025 (two weeks after publication under Article 42); Article 41(1) repeals Federal Decree-Law No. 20 of 2018. Its Executive Regulations are Cabinet Resolution No. 134 of 2025, issued 29 October 2025, Official Gazette No. 811 of 14 November 2025, effective 14 December 2025, replacing Cabinet Resolution No. 10 of 2019.

The federal tax layer:

•          Federal Decree-Law No. (47) of 2022 Concerning Corporate and Business Tax — issued 3 October 2022, Official Gazette No. 737 of 10 October 2022, effective 25 October 2022; amended three times — by Federal Decree-Law No. 60 of 2023 (issued 2 October 2023, effective 1 November 2023), Federal Decree-Law No. 40 of 2024 (issued 1 October 2024, effective retroactively from 1 June 2023) and Federal Decree-Law No. 28 of 2025 (issued 1 October 2025, effective 15 October 2025). Author’s assessment: the second is the one most often missed, because it is retroactive and outwardly invisible.

•          Cabinet Decision No. (100) of 2023 on Qualifying Income — issued 25 October 2023, effective 1 June 2023; Article 10 repealed Cabinet Decision No. 55 of 2023.

•          Ministerial Decision No. (229) of 2025 Regarding Qualifying Activities and Excluded Activities — issued 28 August 2025, effective 1 June 2023; Article 7 repealed Ministerial Decision No. 265 of 2023, which had itself repealed Ministerial Decision No. 139 of 2023. Author’s assessment: any publication citing Ministerial Decision No. 265 of 2023 today is working from a repealed instrument.

•          Ministerial Decision No. (336) of 2025 adding VARA to the definition of Competent Authority; it amends Ministerial Decision No. 229 of 2025, was issued on 22 December 2025, takes effect retroactively from 1 June 2023, and was announced by the Ministry of Finance on 11 February 2026.

•          Cabinet Decision No. (142) of 2024 on top-up tax for multinational groups — applicable to financial years beginning on or after 1 January 2025.

•          Cabinet Decision No. (100) of 2024 amending the Executive Regulation of Federal Decree-Law No. 8 of 2017 on VAT — issued 2 October 2024, effective 15 November 2024, with retroactive effect on certain items back to 1 January 2018.

A note on source access. The Federal Tax Authority portal tax.gov.ae is closed to automated access by robots.txt, and a number of DWTC and Cabinet documents are published as PDFs from which machine extraction truncates. The instruments quoted here were taken from uaelegislation.gov.ae, dlp.dubai.gov.ae, mof.gov.ae, rulebooks.vara.ae, vara.ae, rulebook.centralbank.ae, uaecma.gov.ae, media.dwtc.com and dwtc.com, with the source named at each citation. Where the primary text could not be obtained — notably for DWTC’s tariff and for the version in force of the VAT Designated Zones list — this is stated openly in the relevant section and no figures are given.

What the DWTC Free Zone Is, and Where DWTCA’s Powers End

The DWTC Free Zone is a free zone in central Dubai created by Article 3 of Law No. 9 of 2015 together with the DWTC zone itself and the Dubai World Trade Centre Authority; DWTCA is a corporate registrar and commercial licensor, not a financial regulator. That distinction determines the entire architecture of the zone’s crypto regime.

All three were created by a single instrument; there is no separate free zone decree. DWTCA is a public corporation with legal personality and financial and administrative autonomy, affiliated to the Investment Corporation of Dubai. Article 3 of Law No. 9 of 2015:

“Pursuant to this Law, the following are established: 1. a zone named the ‘Dubai World Trade Centre’… and 2. a public corporation named the ‘Dubai World Trade Centre Authority’…”

and then: “A Free Zone and an Administrative Zone are hereby established within the DWTC.”

DWTCA’s powers are registry and licensing powers, not financial supervisory powers. Article 5 empowers it to “register and license DWTC Establishments within the Free Zone”, to “determine the business and activities which are authorised within the DWTC Zones”, and to “audit and inspect DWTC Establishments and their activities”.

Article 22 removes zone companies from the reach of the municipal and emirate economic authorities:

“Neither the DWTCA nor the DWTC Establishments licensed in the Free Zone will, in relation to their operations in the Free Zone, be governed by the laws, regulations, authority, or powers of the Dubai Municipality or the Department of Economic Development”

— save for public health, safety, food and environmental control legislation.

Author’s assessment: Law No. 9 of 2015 contains no article reserving financial services to federal regulators, and none conferring financial-regulator powers on DWTCA. Where DWTCA’s powers stop is defined not by this Law but by the external regimes occupying the field: federally by the Central Bank and, from 1 January 2026, the Capital Market Authority; and in Dubai for virtual assets by VARA. That is precisely why the 2021 crypto episode unfolded as it did.

The entity forms are the FZE, the FZCO and the branch. Free Zone Company Regulations V7 provide for the FZE — a single-shareholder company — the FZCO with two or more shareholders, and branches of entities lawfully existing outside the free zone. The term “FZ-LLC” does not appear in DWTC’s documents: it is DMCC and JAFZA terminology, and carrying it over to DWTC is an error.

No single minimum share capital figure is prescribed. The Regulations require at least one share per shareholder at a nominal value of AED 1,000, with capital denominated in dirhams, and then state expressly: “The Authority reserves the right to specify different minimum issued share capital requirements for each type of Company.” Capital is set by activity, administratively.

DWTC Free Zone parameter	Position
Consti­tutive instru­ment	Law No. (9) of 2015, Article 3
Date of issue	11 April 2015
Entity forms	FZE (one share­holder), FZCO (two or more), branch
Nominal value per share	AED 1,000
Minimum capital	No single figure; set by activity
Licence categories	Commer­cial, General Trading, Profes­sional, Event Manage­ment, Family Office, Hotel; separately, a Busi­ness Operating Permit
Visa quota	1 visa per 7.4 sq m of leased commercial space; serviced offices, 2 visas per desk
Regis­tered office	Mandatory, within the free zone
Third-­party lia­bility insu­rance	AED 500,000 up to 19 emplo­yees; AED 1,000,000 at 20 or more
Late rene­wal penalty	AED 1,000 per month on the licence and AED 100 per month on the establish­ment card

The zone’s tariff is published, but not in full — and the distinction matters more than it looks. Appendix 1 to the Free Zone Rules and Regulations is headed “Tariff Schedule” and sets out an extensive list of ancillary fees. It contains no base licence rate: the tariff names only a “licence fee for each additional activity”, while the headline licence and package pricing is quoted on enquiry. No dirham figure appears anywhere on the zone’s website, including the virtual assets section and the packages page.

Item in Appendix 1 to the DWTC Rules	Fee
One-time regis­tration fee	AED 2,000
Refundable secu­rity deposit	AED 3,500
Addi­tional activity	AED 1,500
Addition of a licence type	AED 15,000
Modifi­cation or replace­ment of activi­ties	AED 2,500
Change of company name	AED 1,500
Owner­ship change or share trans­fer	AED 3,000
Share capital amend­ment	AED 3,000
Change of Director, Company Secre­tary or General Manager	AED 1,500
Certifi­cate of good standing / certifi­cate of incum­bency	AED 3,000 each
De-­regis­tration	AED 3,000
Busi­ness Operating Permit — issue and rene­wal	AED 2,000 each
Establish­ment card	AED 2,300
Inside-­country visa, normal medical	AED 3,500; investor and partner AED 4,000
Outside-­country visa	AED 2,300; investor AED 2,600
Visa rene­wal	AED 3,000
Visa cancel­lation	AED 500
Addi­tional visa quota	AED 5,000, rene­wal AED 1,000
Activity outside the licence or Busi­ness Operating Permit	fine of AED 50,000
Storing goods in office prem­ises	fine of AED 5,000
Counter­feit goods	fine of AED 100,000
Obstruc­ting an inspec­tor	fine of AED 5,000
Zone-spon­sored employee working else­where	fine of AED 10,000

A reliability caveat on the tariff. The table could not be extracted by machine reading from the current V14 edition — the appendix truncates; the figures above were read from earlier editions of the same document, which agree with each other line for line. The accurate formulation is therefore “the zone publishes an extensive ancillary tariff but not its base licence price”, and the figures themselves should be confirmed with the zone on the date of enquiry. The appendix separately sets out penalties for beneficial ownership register breaches, by reference to Cabinet Decision No. 132 of 2023.

The zone’s rulebook contains not a single provision on virtual assets. Free Zone Rules and Regulations V14 mentions neither crypto, nor VASPs, nor VARA, and its family office section expressly excludes “any ‘regulated’ activities…governed by relevant UAE Authorities — e.g. Central Bank.” The practical point: the zone’s rules neither substitute for regulatory permission nor set out its conditions. The wider free zone versus mainland calculation is covered in Free Zone or Mainland in the UAE 2026.

A separate caution about the currency of zone documents. Some editions of the DWTC rules still cite Federal Labour Law No. 8 of 1980, long replaced by Federal Decree-Law No. 33 of 2021. The practical lesson for readers: free zone rulebooks cannot be used as a source of federal law — they are updated more slowly than the federal layer.

The 2021 Crypto Episode: What Was Announced, and Why It Never Became Law

DWTCA twice declared in 2021 that it would move into crypto asset regulation, but no instrument was ever issued under either declaration. No numbered, dated DWTCA crypto regulation could be found — neither in force nor repealed.

The first event was an agreement with the federal regulator on 22 September 2021. The regulator’s press release records:

“The agreement establishes a framework that allows DWTCA to issue the necessary approvals and licenses for the conduct of financial activities relating to crypto assets”

while the federal regulator retained oversight of crypto asset issuance, offering, listing and trading, licensed the associated financial activities, and would “oversee, monitor and inspect” DWTCA free zone entities. The agreement was signed by Dr Maryam Al Suwaidi for the regulator and H.E. Helal Saeed Almarri for DWTCA.

A detail that is telling in itself. The original address of that press release on the regulator’s own domain now redirects to uaecma.gov.ae: the body’s entire web estate was renamed following the replacement of the Securities and Commodities Authority by the Capital Market Authority on 1 January 2026. The 2021 agreement still exists; the authority it names does not.

The second event was the announcement of 20 December 2021. DWTC declared that it would become

“a comprehensive zone and regulator for virtual assets and crypto including digital assets, products, operators and exchanges”

and would deliver “a new world-class regulatory framework of Virtual Asset legislative and enforcement policies” with “rigorous standards for investor protection, Anti Money Laundering (AML), Combating the Financing of Terrorism (CFT) compliance”. The Dubai Media Office release of the same date does not mention the federal regulator at all, and names no regulation, no number and no rulebook.

The promised framework was never issued. The announcement is dated 20 December 2021; Dubai Law No. 4 of 2022 was issued on 28 February 2022 — ten weeks later. Author’s assessment: the December 2021 statement was a statement of intent that was overtaken by legislation before it could become an instrument.

Event	Date	Legal result
DWTCA agreement with the federal regulator	22 September 2021	A framework agreement; no instru­ment issued
“Comprehensive zone and regulator” announcement	20 December 2021	A statement of intent; no instru­ment issued
Dubai Law No. 4 of 2022	28 February 2022	VARA created; the virtual assets regime established by law

That is why no repeal instrument exists — there was nothing to repeal. Article 27 of Law No. 4 of 2022 contains a general sweep-up:

“Any provision in any other Legislation is hereby repealed to the extent that it contradicts the provisions of this Law.”

It would have caught any conflicting DWTCA rules automatically, had any been made. The accurate formulation for this history is “announced in December 2021, never enacted, overtaken by Law No. 4 of 2022”.

Corroboration from the market side. Surveys of UAE digital asset regulation published by large international law firms contain no section on a DWTCA crypto regime at all — neither as current nor as historic. Author’s assessment: for the professional market this regime never existed, and material describing DWTCA as a virtual assets regulator is reproducing a 2021 press release rather than the law.

Who Regulates Virtual Assets in DWTC: The Answer Is VARA

Virtual assets in the DWTC Free Zone are regulated by the Virtual Assets Regulatory Authority, not by the DWTC Authority, and VARA’s remit covers every zone in the Emirate of Dubai including the free zones, with one exception — the DIFC. The provision is direct and admits of no reading around it.

Article 3 of Law No. 4 of 2022, verbatim:

“This Law applies to the Virtual Asset services provided in all zones across the Emirate, including Special Development Zones and free zones but excluding the Dubai International Financial Centre.”

Article 6 makes the competence exclusive:

“VARA is the competent entity in the Emirate in charge of regulating, supervising, and overseeing Virtual Asset services.”

The same conclusion follows independently from the federal instrument. Article 4 of Cabinet Decision No. 112 of 2022: VARA exercises the delegated powers “exclusively within the Emirate of Dubai and the free zones therein”. The DWTC Free Zone’s place inside VARA’s perimeter is therefore established by two independent primary instruments, one emirate-level and one federal.

The regulator’s own formulation in 2026:

“The Virtual Assets Regulatory Authority (VARA) is the sole authority regulating virtual assets across Dubai’s free zones and mainland, except within the jurisdiction of Dubai International Financial Centre (DIFC).”

And here is the twist that reframes the picture, and which is almost never analysed. Article 4 of Law No. 4 of 2022: “Pursuant to this Law, a public corporation named the ‘Dubai Virtual Assets Regulatory Authority’ is established. VARA will have legal personality, financial and administrative autonomy… VARA will be affiliated to the DWTC Authority.” DWTCA did not lose the crypto file — crypto was carved out of DWTCA into a specialist regulator institutionally attached to DWTCA itself. The December 2021 ambition was reorganised rather than abandoned: DWTCA ceased to be the regulator, but the regulator came into being beneath it. For an applicant this changes nothing — there are still two licences and two bodies — but it explains why DWTC continues to position itself as a crypto zone without being a crypto regulator. A caveat on phrasing: VARA’s own “About” page in 2026 does not mention DWTCA and describes the authority as “the world’s first independent regulator for virtual assets”. The statute is unamended, so the accurate formulation is that VARA remains affiliated to DWTCA as a matter of statute — not that it presents itself that way today.

The emirate and federal perimeters are consistent, and the difference in wording matters.

Instrument	Perimeter	Carve-out
Dubai Law No. 4 of 2022, Article 3	All zones in the Emirate of Dubai, including special development zones and free zones	DIFC
Cabinet Resolution No. 111 of 2022, Article 3	The virtual assets sector in the UAE, including free zones	Financial Free Zones(DIFC and ADGM)
Cabinet Decision No. 112 of 2022, Article 4	VARA’s powers — the Emirate of Dubai and the free zones within it	—

The difference between “DIFC” and “Financial Free Zones” is not editorial. The emirate law excludes only the DIFC because ADGM sits in another emirate and falls outside a Dubai law by definition. The federal resolution excludes both financial free zones because they are regulated by the DFSA and the FSRA under a separate federal regime. In practice: a DWTC company answers to VARA, a DIFC company to the DFSA and an ADGM company to the FSRA — and licences do not travel between those regimes.

A federal tier persists above the delegation. Article 4 of Cabinet Resolution No. 111 of 2022: “No Person may engage in Virtual Asset Activities in the UAE without obtaining the approval and licence from the Authority or the Local Licensing Authorities — as the case may be”. Article 9 obliges local licensing authorities to supply the federal regulator with “all data and information related to Virtual Asset Service Providers, the licences issued to them and the transactions in respect of the assets, upon the Authority’s request”. In this architecture VARA is a local licensing authority, not an autonomous jurisdiction.

Two Licences, Two Bodies: How the Division of Labour Works

The DWTC Authority incorporates the company, maintains the register, provides premises, processes visas and issues the commercial licence; VARA grants the regulatory permission to conduct virtual asset activity. Neither substitutes for the other, and both are mandatory. The zone itself states this without ambiguity.

From DWTC’s virtual assets page:

“Any firm seeking to conduct virtual assets activities in or from Dubai (excluding DIFC) must obtain a Virtual Assets Service Provider (VASP) License before initiating operations.”

“All applicants must fulfil the requirement of obtaining a VASP License from the Virtual Assets Regulatory Authority (VARA), in combination with an Operational License from DWTC Authority.”

And a direct disclaimer in DWTCA’s own guidelines:

“While DWTC Authority extends valuable guidance on the Dubai Virtual Asset Framework, it should be noted that any guidance or decisions made by VARA fall outside of our purview of responsibility and liability.”

The sequence runs to six steps, and VARA’s pre-approval comes before the zone’s licence.

Step	What happens	Body
1	Online applica­tion with the document set	DWTCA
2	Comple­tion of the VARA questionnaire and pre-appro­val; the zone’s initial appro­val; payment of the authority fee	VARA, then DWTCA
3	Execu­tion of corporate documents establishing the required capital	DWTCA
4	Lease of a private physical office within the free zone	DWTCA
5	Issue of the Non-Operational Virtual Asset License	DWTCA
6	Grant of the VARA VASP Licence; conver­sion to an Operational License	VARA, then DWTCA

The single most commercially significant sentence in the procedure, and it is barely reported. Verbatim from DWTCA’s guidelines: “If the applicant does not obtain the VASP License from VARA within the one-year validity of the Non-Operational License issued by DWTC Authority, the non-operational license will not be renewed” — with the fees paid forfeited. In practice the year is not an indication but a shelf life for the whole structure. If the VARA process does not close within twelve months, the company loses both the zone licence and the money.

DWTC’s virtual asset packages differ by scope of activity, premises and visa quota.

Package	Activities covered	Work­space	Visas
Swap	All virtual asset activi­ties	Private Executive Office, 4 desks	6
Virtupro	Cus­tody, Ex­change, Manage­ment and Investment Services	Private Executive Office, 2 desks	3
Virtutech	Proprietary Trading, Distributed Ledger Technologies, Advi­sory, Broker and Dealer, Lending and Borrowing, VA Issu­ance	Private Executive Office, 2 desks	3
Virtuspark	Proprietary Trading and Distributed Ledger Technologies	Co-working, 40 hours a month	2

All four include company registration, the memorandum, the certificate of incorporation, the licence, the establishment card and a workspace service agreement. No prices are published.

An open question worth putting to the zone before applying. The guidelines require a lease of a private physical office, while the Virtuspark package offers co-working capped at 40 hours a month. The most likely reading is that the private-office requirement attaches to VARA-regulated activities, while Virtuspark covers Proprietary Trading and distributed ledger work that may fall outside the VASP perimeter. That reading is offered as the author’s assessment, not as the zone’s position, and should be confirmed with DWTCA.

One more line worth drawing explicitly: Distributed Ledger Technologies is not a VARA-regulated activity.DWTCA also issues commercial licences for unregulated technology work. In practice a DWTCA licence naming distributed ledger technology confers no VARA permission whatsoever and does not allow the holder to provide virtual asset services.

VARA’s Eight Licensable Activities

VARA licenses eight virtual asset activities, not seven: Category 1 virtual asset issuance has been added to the original seven. The list, in the regulator’s own words:

“VA Advisory Services, VA Broker-Dealer Service, VA Custody Service, VA Exchange Services, VA Lending and Borrowing Services, VA Management and Investment Services, VA Transfer and Settlement Services, VA Issuance – Category 1”

Author’s assessment: any description of “VARA’s seven activities” reflects the 2023–2024 position and is now incomplete. Category 1 issuance has its own rulebook and its own line in the fee schedule. Category 2 issuance, by contrast, is not a licensable activity and does not count towards the eight — conflating the two produces a wrong count.

VARA activity	Subs­tance
VA Advi­sory Services	Advice on virtual assets
VA Broker-­Dealer Services	Broker and dealer services
VA Cus­tody Services	Cus­tody
VA Ex­change Services	Ex­change services, including deriva­tives from 2026
VA Lending and Borrowing Services	Lending and borrowing
VA Manage­ment and Investment Services	Manage­ment and investment
VA Trans­fer and Settle­ment Services	Trans­fer and settlement
VA Issuance Category -1 (VARA’s own rendering)	Issuance of FRVAs, ARVAs and other assets as VARA determines

NFT marketplaces are regulated by what they do, not by the asset type. VARA’s formulation:

“Entities that possess NFT Marketplace Commercial Licences with Free Zones must obtain a VA Exchange Licence and/or a VA Broker-Dealer Licence from VARA.”

The point matters specifically for DWTC: a free zone commercial licence reading “NFT marketplace” does not by itself permit operation. A VARA exchange or broker-dealer licence is required — or both.

Proprietary trading sits outside licensing but not outside supervision. Per VARA:

“VA Proprietary Trading will require a VARA NOC to confirm that the VA activity may be undertaken with regulatory oversight without a VA Licence.”

Registration becomes mandatory above a turnover threshold. VARA states that registration applies to proprietary trading “above AED 1 Billion monthly rolling trading volumes”; the annual NOC fee is AED 1,000. On 31 July 2025 VARA issued a reminder circular on licence code requirements for proprietary trading — the area remains under close supervisory attention.

A reliability caveat on the NOC and other ancillary fees. The figures of AED 1,000 for the NOC, AED 500per licence update, AED 10,000 for licence withdrawal and up to AED 55,000 in aggregate for whitepaper review are confirmed by a VARA clarification dated 22 June 2023; no later restatement could be found. They are given here with the age of the source flagged and should be confirmed with the regulator before applying.

Token issuance operates on two tiers. Category 1 — issuance of FRVAs, ARVAs and anything else VARA designates — requires a full licence. Category 2 — “Issuance of any Virtual Asset which does not constitute (i) a Category 1 VA Issuance; or (ii) an Exempt VA” — requires no licence, but placement and distribution must go through a Licensed Distributor. Exempt VAs are defined as “(i) a Non-Transferable Virtual Asset; (ii) a Redeemable Closed-Loop Virtual Asset; or (iii) other Virtual Asset as may be determined by VARA from time to time”. On 9 April 2026 VARA issued Guidance on the Issuance Rulebook together with a revised schedule of definitions and worked examples for each category.

What a VARA Licence Costs: Capital and Fees

Minimum paid-up capital for a VASP runs from AED 100,000 for advisory services to AED 1,500,000 for exchange services without an approved custodian, and most activities apply a “higher of a fixed sum or a percentage of fixed annual overheads” test. The requirements sit in Rule VI.B.1 of the Company Rulebook in the version effective from 19 June 2025; the rulebook file itself is stamped 19 May 2025 — the discrepancy between file date and effective date appears on the regulator’s own portal.

Activity	Paid-up capital
Advi­sory Services	AED 100,000
Broker-­Dealer Services with an approved custo­dian	higher of AED 400,000 or 15% of fixed annual over­heads
Broker-­Dealer Services, all other cases	higher of AED 600,000 or 25%
Cus­tody Services	higher of AED 600,000 or 25%
Ex­change Services with an approved custo­dian	higher of AED 800,000 or 15%
Ex­change Services, all other cases	higher of AED 1,500,000 or 25%
Lending and Borrowing Services	higher of AED 500,000 or 25%
Manage­ment and Investment with an approved custo­dian	higher of AED 280,000 or 15%
Manage­ment and Investment, all other cases	higher of AED 500,000 or 25%
Trans­fer and Settle­ment Services	higher of AED 500,000 or 25%

A point of terminology that separates a specialist from a compiler. VARA does not use the concept of Annual Expenditure — that is ADGM FSRA and DFSA vocabulary. VARA has two non-fixed measures: a percentage of fixed annual overheads (15% or 25%) as the alternative limb of the capital test, and Net Liquid Assets under Rule VI.C.1 — “Net Liquid Assets ≥ 1.2 x monthly operating expenses”, reconciled daily and reported monthly. Importing “Annual Expenditure” into a VARA article is an error of substance, not of style.

Eligible assets for the liquidity measure are narrow. Net Liquid Assets comprise cash and cash equivalents together with VARA-approved virtual assets referenced to the US dollar or the dirham.

Fees are set by Schedule 2, “Supervision and Authorisation Fees”, to the Virtual Assets and Related Activities Regulations 2023 in the version in force since 19 June 2025 (earlier versions: 7 February 2023, 5 June 2023, 19 September 2023 and 1 October 2024).

Activity	Application fee	Extension to an addi­tional activity	Annual super­vision fee
Advi­sory Services	AED 40,000	50% of the lower applica­tion fee(s)	AED 80,000
Broker-­Dealer Services	AED 100,000	50% of the lower applica­tion fee(s)	AED 200,000
VA Issu­ance – Category 1	AED 100,000	50% of the lower applica­tion fee(s)	AED 200,000
Cus­tody Services	AED 100,000	50% of the lower applica­tion fee(s)	AED 200,000
Ex­change Services	AED 100,000	50% of the lower applica­tion fee(s)	AED 200,000
Lending and Borrowing Services	AED 100,000	50% of the lower applica­tion fee(s)	AED 200,000
Manage­ment and Investment Services	AED 100,000	50% of the lower applica­tion fee(s)	AED 200,000
Trans­fer and Settle­ment Services	AED 40,000	50% of the lower applica­tion fee(s)	AED 80,000

Author’s assessment: extending a licence is cheaper than a parallel application, and the tariff is designed that way.A firm planning several activities pays the full fee for the first and half of the lower application fee for each further one — but the annual supervision fee is charged per activity. It is the annual supervision fee, not the one-off application, that determines the cost of holding a licence: an exchange with a custody arm pays AED 400,000 a year to the regulator alone, before audit, compliance and zone fees.

Do not confuse VARA’s fees with the federal fees for services to virtual asset service providers — different persons pay them to different bodies. Cabinet Resolution No. 83 of 2025 “Regarding Fees for Services Provided to Virtual Asset Service Providers”, issued 16 June 2025, Official Gazette No. 802 of 26 June 2025, effective 27 June 2025, sets fees payable to the federal regulator: registration of a locally licensed provider AED 3,000, annual renewal AED 1,500, cancellation AED 1,000; for a virtual asset platform operator, AED 5,000 on application, AED 450,000 on issuance and AED 220,000 on renewal. But Article 1(3) of that same resolution expressly provides that the local licensing authority, in coordination with the federal regulator, sets its own fees. In practice a DWTC company pays under VARA’s Schedule 2, not the federal scale; reproducing the federal rates as the cost of a Dubai licence is a common and expensive error.

A discrepancy resolved in favour of the PDF. The HTML rendering of Schedule 2 on the rulebook portal returns “AED 200,000 / AED 80,000” in the extension-fee column. The PDF text is correct: “50% of lower Licence Application Fee(s)” — only that reading is coherent with the column heading. Cite the PDF.

VARA’s Rulebooks and What Changed in 2025 and 2026

Four VARA rulebooks are compulsory — Company, Compliance and Risk Management, Technology and Information, and Market Conduct; the rest attach to a specific activity. The Custody rulebook is not in the compulsory set: it is an activity rulebook.

Group	Rulebooks
Compul­sory	Company; Compli­ance and Risk Manage­ment; Techno­logy and Informa­tion; Market Conduct
Activity-specific	Advi­sory Services; Broker-­Dealer Services; Cus­tody Services; Ex­change Services; Lending and Borrowing Services; VA Manage­ment and Investment Services; VA Trans­fer and Settle­ment Services; Virtual Asset Issu­ance

On 19 May 2025 VARA reissued the activity rulebooks across all eight activities, with full compliance required by 19 June 2025. VARA’s own summary of the changes: “strengthened controls around margin trading and token distribution services”, “clearer definitions for collateral wallet arrangements”, “harmonised compliance requirements across all licensed activities”.

The principal change of 2026 is a regime for exchange-traded derivatives. The Exchange Services Rulebook in version V.2, effective 31 March 2026, carries a new Part V, “Exchange Traded Derivative Services Rules”. For the first time, exchange-traded virtual asset derivatives — futures, options, contracts for difference and perpetuals — are permitted under a permanent regulatory regime.

Rule in Part V of the Ex­change Services Rulebook	Content
Rule V.G.8	“VASPs shall not permit Retail Investors to use or access ETD Services with greater than 5-to-1 leverage”
Rule V.G.8	The same rule continues “as the minimum requirement for ETD Initial Margin is twenty percent (20%)” — leverage and margin are set by a single rule
Rule V.G.6	An obliga­tion to set maximum leverage limits suitable for each indivi­dual client
Rule V.H.1	For perpetual contracts, the funding rate must be calculated no less than three times per day
Rule V.H.4	Retail inves­tors must be given a predic­tive funding rate payment chart
Sections I and K	Insurance Funds and the treatment of negative client account balances

Author’s assessment: pairing 5-to-1 leverage with 20% initial margin is a deliberately conservative calibration. On unregulated offshore venues, perpetual leverage has historically been measured in the tens. Requiring the funding rate to be struck at least three times a day and shown to retail investors as a forward chart converts what used to be a question of venue good faith into a rule.

The 2025–2026 sequence of releases shows the focus shifting from licensing to supervision.

Date	VARA release
19 May 2025	Updated activity rulebooks, compliance required by 19 June 2025
24 July 2025	Non-Objection regis­tration requirements under the Central Bank’s Payment Token Services Regulation
31 July 2025	Reminder on licence code requirements for proprietary trading
10 October 2025	Public consultation on implementing the Crypto-Asset Reporting Framework
24 November 2025	Mandated gap assessment following the new federal AML law
8 January 2026	Circular on onboarding and classification of qualified inves­tors
22 January 2026	Enhanced measures for high-risk juris­dictions per the October 2025 FATF lists
24 February 2026	Implementation requirements for the virtual assets Travel Rule
4 March 2026	Circular applying federal AML and CTF requirements to VASPs
31 March 2026	Ex­change Services Rulebook: the deriva­tives regime
9 April 2026	Guidance on the Virtual Asset Issu­ance Rulebook
1 June 2026	Proliferation financing national risk assessment and required actions
12 June 2026	Guidance on AML and CTF business risk assessments

Marketing of virtual assets is governed by a separate instrument. The Regulations on the Marketing of Virtual Assets and Related Activities 2024 were issued on 31 August 2024 and took effect on 1 October 2024, superseding a 2023 administrative order. They bite on “any advertisement, invitation, inducement, solicitation, offer or promotion”, apply to licensed and unlicensed and to domestic and foreign entities alike, require a prominent warning that virtual assets “may lose their value in full or in part, and are subject to extreme volatility”, and require app stores to ensure that the apps they carry are VARA-licensed or approved. No 2025 or 2026 amendment to these Regulations was found.

Stablecoins: Where VARA Ends and the Central Bank Begins

A stablecoin referenced to the UAE dirham falls within the exclusive competence of the Central Bank and cannot be approved by VARA; VARA licenses the issuance of assets referenced to other fiat currencies and of asset-referenced tokens. The line is drawn in VARA’s own rulebook rather than inferred from practice.

Rule I.B.4 of the Virtual Asset Issuance Rulebook, verbatim:

“the issuance of any FRVA that purports to maintain a stable value in relation to the value of AED shall not be approved under this VA Issuance Rulebook or the FRVA Rules, and shall remain under the sole and exclusive regulatory purview of the CBUAE”

Rule I.C.1 defines the licensable perimeter:

“Issuance of any — (i) Fiat-Referenced Virtual Assets (‘FRVAs’); (ii) Asset-Referenced Virtual Assets(‘ARVAs’); or (iii) other Virtual Assets as may be determined by VARA from time to time.”

The reserve requirement sits in Rule III.B.1, and it lives in Annex 1 to the rulebook — in the FRVA Rules themselves rather than in the main body:

“VASPs Licensed to issue FRVAs shall, at all times, hold and maintain sufficient Reserve Assets such that the FRVA is at least one hundred percent (100%) backed by Reserve Assets.”

From the Central Bank’s side the boundary is fixed by the Payment Token Services Regulation, circular C 2/2024, in force from 31 August 2024.

“All Payment Tokens issued by a Dirham Payment Token Issuer shall be denominated only in Dirham.”

“No Merchant or other Person in the UAE selling goods or services during the course of business may accept a Virtual Asset towards payment for that sale unless that Virtual Asset is: (a) a Dirham Payment Token issued by a Licensed Payment Token Issuer being used as a Means of Payment; or (b) a Foreign Payment Tokenissued by a Registered Foreign Payment Token Issuer.”

“For the avoidance of doubt, reference to ‘the UAE’ in this Article (2) excludes the jurisdiction of the Financial Free Zones.”

Instrument	Regu­lator	Basis
Stablecoin refe­renced to the dirham	Central Bank of the UAE, exclu­sively	VARA Rule I.B.4; PTSR C 2/2024
Stablecoin refe­renced to another fiat cur­rency(FRVA)	VARA, VA Issu­ance – Category 1 licence	Rule I.C.1
Asset-refe­renced token (ARVA)	VARA, VA Issu­ance – Category 1 licence	Rule I.C.1
Accepting a virtual asset in payment for goods or services in the UAE	Central Bank of the UAE	PTSR, Article 2
Other tokens (Category 2)	No licence required; placement through a Licensed Distri­butor	Issu­ance Rulebook

The interface between the two regimes has been operationalised. On 24 July 2025 VARA issued a compliance notice on Non-Objection registration requirements under the Central Bank’s Payment Token Services Regulation— a VARA licensee whose business touches payment tokens goes through a separate federal process.

The practical consequence for a DWTC company, and it is counterintuitive. A project to “issue a dirham stablecoin from a Dubai free zone” is unworkable in principle — not because the zone is wrong, but because that issuance is removed from VARA entirely. Such a project goes to the Central Bank under the federal payment token regime, which carries its own issuer licensing requirements. A firm planning a dirham settlement product must design the structure from the federal regime outwards, not from a VARA licence inwards.

The Federal Layer: From SCA to CMA, and the 2026 Virtual Assets Framework

From 1 January 2026 the Securities and Commodities Authority was replaced by the Capital Market Authority, and the substitution operates automatically across all legislation. The basis is Federal Decree-Law No. (32) of 2025, issued 1 October 2025 and published in Official Gazette No. 809 of 14 October 2025.

Article 2 of the decree-law:

“2. The Capital Market Authority shall replace the Securities and Commodities Authority established pursuant to Federal Law No. (4) of 2000… in all its rights, obligations, and contracts, and shall be deemed its legal successor. 3. The designation ‘Securities and Commodities Authority’ wherever it appears in any legislation shall be replaced by the designation ‘Capital Market Authority.’”

Article 5(3) fixes the perimeter: the CMA exercises its powers “within the state, excluding financial free zones”.Article 27(3) preserves Cabinet Resolutions Nos. 111 and 112 of 2022 “to the extent that they do not conflict with this Decree-Law… until they are repealed, amended, or replaced”. Article 29 repeals Federal Law No. 4 of 2000. Article 30 sets commencement at 1 January 2026.

A consequence worth stating plainly. Cabinet Resolution No. 111 of 2022 and the DWTCA agreement of 22 September 2021 still name the SCA on their face: neither has been re-issued. The substitution operates by force of Article 2(3), not by amendment of the instruments. Author’s assessment: any material describing VARA’s powers today as delegated “by the Securities and Commodities Authority” is using a designation that has not existed in law since 1 January 2026. A related trap is the official u.ae portal, whose digital assets section still names the SCA as the federal supervisor; where the portal and the decree-law diverge, the decree-law governs.

The companion instrument is Federal Decree-Law No. (33) of 2025 on the regulation of capital markets, issued the same day and commencing on the same date.

On 13 April 2026 the CMA issued its own virtual assets framework, comprising five modules and eight regulated activities. The modules are General Requirements; Conduct of Business; Alternative Trading System; AML/CTF; and Prudential Requirements. The eight activities are dealing as principal; dealing as agent; providing custody; arranging custody; arranging investment deals; providing investment advice; portfolio management; and operating a multilateral trading facility. The regulator’s stated principle is “same activity, same risk, same regulatory outcome”.

The CMA framework operates in parallel with the Dubai regime rather than in place of it. In the assessment of a large international law firm, “This framework will operate in parallel with VARA’s Dubai-specific regime.”

A reliability caveat. The CMA decision number, the framework’s commencement date and the transition arrangements for existing VASPs could not be confirmed: the CMA news page returns an access error to automated requests, and the framework’s content is corroborated by major business media and international law firm commentary — that is, by second-tier sources. The issue date of 13 April 2026 and the structure of five modules and eight activities are confirmed by the title of the regulator’s own publication.

Layer	Body	Instrument	Perimeter
Emirate of Dubai, virtual assets	VARA	Dubai Law No. 4 of 2022	All Dubai zones except the DIFC
Federal, virtual assets	CMA (the SCA until 1 January 2026)	Cabinet Resolution No. 111 of 2022; framework of 13 April 2026	The UAE excluding the finan­cial free zones
Federal, payment tokens	Central Bank of the UAE	PTSR, circular C 2/2024	The UAE excluding the finan­cial free zones
Dubai finan­cial free zone	DFSA	Separate federal regime	DIFC
Abu Dhabi finan­cial free zone	FSRA	Separate federal regime	ADGM

Author’s assessment: what matters practically for a DWTC company is that a federal supervisory tier sits above the emirate licence, and that tier became more active in 2026. Article 9 of Cabinet Resolution No. 111 of 2022 obliges VARA to pass licensee, licence and transaction data to the federal regulator on request. Treating a VARA licence as a self-contained answer to the regulatory question was defensible in 2023 and is no longer defensible in 2026.

Corporate Tax: Can a Virtual Asset Business Be a Qualifying Free Zone Person?

The legislation gives no direct answer: no virtual asset activity appears in the list of Qualifying Activities, but with Ministerial Decision No. 336 of 2025 VARA has been recognised as a Competent Authority for two of them — fund management services and wealth and investment management services. That is the single point at which virtual assets have touched the zero-rate regime directly.

The chain of instruments in force looks like this, and two of its links have been replaced.

Instrument	Issued	Effective from	Status
Cabinet Decision No. 55 of 2023	1 June 2023	—	Repealed by Article 10 of CD 100/2023
Ministerial Decision No. 139 of 2023	1 June 2023	—	Repealed by Article 6 of MD 265/2023
Cabinet Decision No. 100 of 2023 (Qualifying Income)	25 October 2023	1 June 2023	In force
Ministerial Decision No. 265 of 2023	27 October 2023	1 June 2023	Repealed by Article 7 of MD 229/2025
Ministerial Decision No. 229 of 2025 (Qualifying and Excluded Activities)	28 August 2025	1 June 2023, retro­actively	In force
Ministerial Decision No. 336 of 2025 (VARA as Competent Authority; amends MD 229/2025)	22 December 2025	1 June 2023, retroactively	In force

The rates sit in Article 3(2) of Federal Decree-Law No. 47 of 2022: 0% on Qualifying Income and 9% on taxable income that is not Qualifying Income. The conditions for Qualifying Free Zone Person status are in Article 18: adequate substance in the State, Qualifying Income as specified by Cabinet decision, no election into the ordinary regime under Article 19, compliance with Articles 34 and 55, and any further conditions the Minister prescribes. Failure of any condition costs the status from the start of that tax period.

The Qualifying Activities under Article 2(1) of Ministerial Decision No. 229 of 2025 are: manufacturing of goods or materials; processing of goods or materials; trading of Qualifying Commodities; holding of shares and other securities for investment purposes; ownership, management and operation of ships; reinsurance services; fund management services; wealth and investment management services; headquarter services to Related Parties; treasury and financing services to Related Parties or for its own account; financing and leasing of aircraft; distribution of goods or materials in or from a Designated Zone; logistics services; and activities ancillary to any of the above.

The Excluded Activities under Article 2(2) are: any transactions with natural persons, save in relation to paragraphs (e), (g), (h) and (k); banking activities; insurance activities; finance and leasing activities; ownership or exploitation of immovable property, other than Commercial Property in a Free Zone in a transaction with a Free Zone Person; and activities ancillary to any of these.

The key 2025 change and what it means. Ministerial Decision No. 229 of 2025 widened paragraph (j) from treasury services “to Related Parties” to “to Related Parties or for its own account”, added paragraph (c) to the savings from the excluded finance and leasing category, and brought environmental commodities — carbon credits and renewable energy certificates — within Qualifying Commodities. In practice, the widening of paragraph (j) makes a fintech group’s in-house treasury a potentially qualifying activity.

The recognition of VARA is the decision that matters most here. Per the Ministry of Finance announcement of 11 February 2026, Ministerial Decision No. 336 of 2025 adds the Virtual Assets Regulatory Authority, established in Dubai under Law No. 4 of 2022, to the definition of Competent Authority in Ministerial Decision No. 229 of 2025 in respect of the Qualifying Activities of “fund management services” and “wealth and investment management services”.

Its significance is that both of those activities are defined by reference to competent-authority supervision. The definition of wealth and investment management services in MD 229/2025 reads: “activities of providing discretionary and non-discretionary investment management and advisory services, portfolio management and wealth and investment advisory services, that are subject to the regulatory oversight of the Competent Authority in the State”. Before February 2026 a VARA licensee could not satisfy that condition, because VARA was not among the competent authorities.

VASP activity	Corpo­rate tax position
Virtual asset fund management under a VARA licence	Capable of qualifying — the competent-authority condition is met through VARA under MD 336/2025
Wealth and investment management, discretionary and non-discretionary	Capable of qualifying on the same basis; and because (g) and (h) are carved out of the natural-persons exclusion, retail clients do not break the status
Ex­change, broker-dealer, custody, trans­fer and settlement, lending	Not on the list. Revenue from these with a Non-Free Zone Person is non-qualifying; revenue from a Free Zone Person may still be Qualifying Income under Article 3 of CD 100/2023
Ex­change services to retail clients	Fall within Excluded Activity (a) — transactions with natural persons
Proprietary trading of virtual assets on own account	Not named among the Excluded Activities. That list is closed, so it is not excluded — but “not excluded” is not “qualifying”. Open question
Holding tokens “for investment purposes”	The definition reaches “negotiable or non-negotiable finan­cial instru­ments, including derivative instru­ments, finan­cial commodities, and other investment instru­ments”. Whether a payment or utility token is a finan­cial instru­ment is nowhere addressed. Open question
Trading of Qualifying Commodities	No. The list is closed: metals, minerals, industrial chemicals, energy, agriculture, associated by-products and environmental commodities, each requiring a quoted price
Distribution in or from a Designated Zone	No, twice over. The definition requires items that are “tangible or movable”, and DWTC is not a Designated Zone

The de minimis threshold is set by Article 3 of Ministerial Decision No. 229 of 2025:

“the non-qualifying Revenue derived by the Qualifying Free Zone Person in a Tax Period does not exceed 5% (five percent) of the total Revenue or AED 5,000,000 (five million dirhams), whichever is lower.”

Revenue attributable to a permanent establishment and revenue from qualifying intellectual property are excluded from the de minimis computation under Article 4 of Cabinet Decision No. 100 of 2023.

A reliability caveat on Ministerial Decision No. 336 of 2025. The primary text is not published on the Ministry of Finance portal — only the announcement of its issuance; the dates rest on a secondary source and, indirectly, on the structure of the instrument itself. Retroactivity to 1 June 2023 is not an anomaly: Article 7 of the amended Ministerial Decision No. 229 of 2025 sets exactly that commencement date, and an amending instrument inherits it. The fact of the recognition, its legal basis and its limitation to two activities are confirmed by the Ministry of Finance announcement of 11 February 2026. Separately: the claim found in some commentary that the recognition extends to exchanges, custodians, brokers and other VASPs contradicts the Ministry’s wording and is not reproduced here.

A trap for anyone relying on the tax authority’s guide. The Corporate Tax Guide for Free Zone Persons in its May 2024 edition lists the competent authorities as the Central Bank, the DFSA, the FSRA and the Securities and Commodities Authority. That guide predates Ministerial Decision No. 336 of 2025 and is, in this respect, out of date as at August 2026. Anyone working from the guide alone will wrongly conclude that VARA is not a competent authority.

A further layer applies to large groups. Cabinet Decision No. 142 of 2024 applies to members of multinational groups with consolidated revenue of EUR 750 million or more in at least two of the four preceding financial years, for financial years beginning on or after 1 January 2025, lifting the effective rate to 15%. Author’s assessment: the QFZP zero rate retains practical meaning only for groups below that threshold — which is where essentially every VARA licensee sits today. The audit obligations without which QFZP status cannot be maintained are covered in Corporate Audit Requirements in the UAE 2026.

VAT: The Virtual Assets Exemption and the Custody Trap

Transfer of ownership of virtual assets and their conversion are exempt from VAT retroactively from 1 January 2018; keeping and managing virtual assets is not within that retroactive exemption. The distinction is made by the text of the Executive Regulation itself and is the most underrated detail in the tax treatment.

The basis is Cabinet Decision No. (100) of 2024 amending the Executive Regulation of Federal Decree-Law No. 8 of 2017, issued 2 October 2024 and effective 15 November 2024.

The definition in Article 1 of the Executive Regulation:

“Virtual Assets: Digital representation of value that can be digitally traded or converted and can be used for investment purposes, and does not include digital representations of fiat currencies or financial securities.”

Article 42(2) brings three items within financial services:

“(k) The transfer of ownership of Virtual Assets, including virtual currencies. (l) The conversion of Virtual Assets. (m) Keeping and managing Virtual Assets and enabling control thereof.”

But Article 42(3)(e) exempts only two of them:

“Services specified in paragraphs (k) and (l) of Clause 2 of this Article, including services supplied on or after 1 January 2018.”

Service	Provision	VAT treatment
Trans­fer of owner­ship of a virtual asset	Article 42(2)(k)	Exempt, retro­actively from 1 January 2018
Conversion of a virtual asset	Article 42(2)(l)	Exempt, retro­actively from 1 January 2018
Keeping and managing virtual assets	Article 42(2)(m)	A finan­cial service, but not within the retroactive exemption; where an explicit fee is charged it follows the general finan­cial services rule
Fund management	Article 42(2)(j), exempt under 42(3)(d)	Exempt
Mining on own account	Public Clarifi­cation VATP039	Not a taxable supply
Mining on behalf of another person	Public Clarifi­cation VATP039	A taxable supply of services

Why the difference between (k)(l) and (m) costs money. The general financial services exemption operates only where the consideration is not an explicit fee, commission, discount or rebate. A custody service charged at a direct commission falls outside that rule and is taxable at the standard rate. Author’s assessment: reviews that list “transfer, conversion and custody” together as exempt are reproducing a press summary rather than the Regulation.

Two tax authority clarifications complete the picture. VATP039 of 14 January 2025 on cryptocurrency mining: mining on own account is not a taxable supply, because there is no sufficient link between reward and activity and no identifiable recipient; mining on behalf of another person is a taxable supply of services; and input tax on own-account mining costs is not recoverable. VATP040, issued on 14 March 2025 (the document itself carries only “March 2025” on its masthead; the day is attested by large-firm commentary), confirms that the exemption for transfer and conversion is retroactive to 1 January 2018 and that cryptocurrencies are “neither regarded nor treated as money” for VAT purposes.

Retroactivity cuts both ways, and that is the principal practical risk. An exemption running from 1 January 2018 means not only a potential refund of output tax but an obligation to repay input tax previously recovered on what are now exempt supplies, through voluntary disclosure. A business that has deducted input VAT for eight years on activity that turns out to have been exempt all along has a liability, not an overpayment.

The tax authority has issued no dedicated guidance on input tax recovery for VASPs. VATP040 does not address recovery or apportionment; the input tax apportionment guide VATGIT1 was updated on 30 September 2025 to allow a prior-year recovery rate to be applied to residual input tax in-year, but contains nothing specific to virtual assets. This is a genuine gap in the guidance, not an oversight on the reader’s part.

Separately — DWTC’s status as a VAT Designated Zone: it has none, and it barely matters. DWTC does not appear in the list under Cabinet Decision No. 59 of 2017, which for Dubai names Jebel Ali Free Zone (North-South), Dubai Cars and Automotive Zone, Dubai Textile City, the free zone areas in Al Quoz and Al Qusais, Dubai Aviation City and Dubai Airport Free Zone.

A reliability caveat on the list, and it works differently from how it first appears. The primary text could not be obtained: the tax authority’s portal is closed to automated access. The list has in fact been amended more than once: the original annex to the 2017 decision carried 20 zones, and the list in force carries 23.The confirmed amendments are the addition of three zones with effect from 18 June 2018 (Al Ain International Airport Free Zone, Al Butain International Airport Free Zone and International Humanitarian City – Jebel Ali) and Cabinet Decision No. 43 of 2019, which added three Ras Al Khaimah zones from 4 July 2019. The correct formulation is “the list under Cabinet Decision No. 59 of 2017 as subsequently amended”, not a reference to a single amendment. DWTC’s absence from the list is corroborated by every accessible reproduction of every edition and is not in doubt.

But for a VASP the status is beside the point. Article 51(6) of the Executive Regulation: “The place of supply of any Services is considered to be inside the State if the place of supply is in the Designated Zone”. Transfer, conversion and custody of virtual assets are services, not goods. Designated Zone status is a goods construct and does not reach services. Author’s assessment: even if DWTC were a Designated Zone it would change nothing for a virtual asset business — and material selling Designated Zone status to crypto firms is selling a benefit that does not exist.

A separate and highly practical 2026 development is the method for converting digital currency values into dirhams for VAT purposes. Directive on Tax Transactions No. 3 of 2026 “for Value Added Tax on the Method of Converting the Value of Digital Currencies into UAE Dirham” was published on 17 July 2026.

The mechanics are specific. The taxable person selects three platforms from a list approved by the tax authority of centralised public exchanges and applies the numerical average of their rates at the date and time of supply. The same three platforms must be used consistently across the calendar year, the choice must be documented before the first applicable transaction, and records must be kept with timestamps. The approved list contains five platforms: Binance FZE, Bybit Fintech FZE, Deribit FZE, Bitget and Payward FZCO.

Author’s assessment: this is the rule a DWTC crypto company will feel before any other. It changes neither the rate nor the exemption — but it turns the choice of rate source from an internal matter into a documented annual decision. Caveat: the tax authority states no issue date for the directive — the register records it as “NA”, published 17 July 2026.

Two VAT developments of 2025–2026 bear directly on VASPs. Federal Decree-Law No. 16 of 2025, issued 25 November 2025 and effective 1 January 2026, removes the self-invoicing requirement for reverse-charge imports, empowers the tax authority through an amended Article 54 to deny input VAT where the supply chain involved evasion and the recipient “knew” or “should have known” of it on the circumstances, caps the carry-forward of excess recoverable VAT at five years from the end of the tax period in which it arose under Article 74(3), after which the right lapses, and repeals Article 79 bis, the standalone VAT limitation period.

That rule has already been operationalised. FTA Decision No. 13 of 2026, issued 22 July 2026 and published 20 August 2026, sets out the “Measures, Procedures and Conditions required by Taxable Persons for Verification of Validity and Integrity of Supplies” — the concrete counterparty and supply verification procedures whose failure triggers denial under Article 54. Author’s assessment: the “knew or should have known” test is particularly sensitive for VASPs, whose counterparty risk is structurally higher, and Decision No. 13 of 2026 converts it from a principle into a checklist.

AML, Beneficial Ownership, CARF and What Is No Longer Required

The governing federal anti-money-laundering instrument since autumn 2025 is Federal Decree-Law No. 10 of 2025, which repealed Federal Decree-Law No. 20 of 2018 and treats virtual asset service providers as a standalone regulated category. It was issued on 30 September 2025, published in Official Gazette No. 808 the same day, and came into force on 14 October 2025 — two weeks after publication under Article 42.

The repeal and the transitional rule are stated directly. Article 41(1): “Federal Decree by Law No. (20) of 2018, referred to herein above, shall hereby be repealed.” Article 41(3): the executive regulations, resolutions and circulars issued under the former law “shall remain effective insofar as they do not conflict with the provisions hereof, until the regulations… that supersede the same are issued”.

The definition of a service provider in Article 1:

“Any natural or legal person who, as a commercial activity, conducts one or more of the virtual asset activities specified in the Executive Regulations of this Decree by Law or conducts transactions related thereto, on behalf of or for the benefit of another natural or legal person.”

One country, two definitions of a virtual asset — and they do not match. The AML definition: “Digital representation of value that may be digitally traded or transferred and may be used for payment or investment purposes, excluding digital representations of fiat currencies, securities, or other Funds.” The VAT Executive Regulation definition: “…can be used for investment purposes…”. The tax definition is narrower: it does not reach payment use. In practice a token can be a virtual asset for AML purposes and not be one for the VAT exemption. The classification has to be run separately under each regime, not once.

The Executive Regulations under the new law have already been issued, and that matters because the transitional rule in Article 41(3) operates only until they appear. Cabinet Resolution No. 134 of 2025, issued 29 October 2025and effective 14 December 2025, replaced Cabinet Resolution No. 10 of 2019 and runs to 71 articles. In practice, any statement that the executive regulations under the 2025 law are still awaited is out of date as at August 2026.

Economic substance is no longer reported. Cabinet Decision No. 98 of 2024, published in the Official Gazette on 16 September 2024, confined the Economic Substance Regulations to financial years “starting from 1 January 2019 to the fiscal year ending on 31 December 2022”, cancelled the administrative fines imposed under them and provided for refunds. In practice a DWTC virtual asset company has no ESR filing for 2023 onwards.

Beneficial ownership requirements sit in Cabinet Resolution No. 109 of 2023, which superseded Cabinet Decision No. 58 of 2020 with effect from 16 November 2023. The Resolution introduces a risk-based approach, gives registrars discretion in identifying the beneficial owner and adds penalties for failure to disclose ownership layers; companies in the financial free zones, the DIFC and ADGM, are outside it. Caveat: since Federal Decree-Law No. 10 of 2025 repealed the parent statute under which the regime sat, the Resolution survives through Article 41(3), “insofar as they do not conflict”. Whether a replacement beneficial ownership instrument has been issued under the new law could not be confirmed as at the date of publication.

Crypto-asset information exchange does not begin immediately. The UAE has signed the Multilateral Competent Authority Agreement under the Crypto-Asset Reporting Framework; per the Ministry of Finance announcement of 20 September 2025, the regime goes live in 2027 with the first exchanges of information in 2028. A public consultation ran from 15 September to 8 November 2025. Reliability caveat: no domestic implementing instrument for CARF could be found as at the date of publication — the commitment has been made, the legislation is unconfirmed.VARA for its part ran a public consultation on CARF implementation on 10 October 2025.

Obligation	Applies to a DWTC virtual asset company	Basis
AML reporting, STRs, compliance programme	Yes	Federal Decree-Law No. 10 of 2025
Benefi­cial owner­ship disclo­sure	Yes	Cabinet Resolution No. 109 of 2023
ESR notifi­cation and report	No, for finan­cial years after 31 December 2022	Cabinet Decision No. 98 of 2024
CARF reporting	Not before 2027, first exchange in 2028	MCAA; MoF announcement of 20 September 2025
Virtual assets Travel Rule	Yes	VARA requirements of 24 February 2026
Payment token Non-Objection regis­tration	Yes, where the business touches payment tokens	VARA notice of 24 July 2025

Can a DWTC Company Serve the Dubai Mainland Market?

Yes, since 3 March 2025, under Executive Council Resolution No. (11) of 2025 — but the mainland income that results is taxed at 9%, not 0%. The Resolution governs “the Conduct of Free Zone Establishments’ Activities within the Emirate of Dubai” and came into force on publication.

Article 2 sets the scope: the Resolution applies to “Establishments wishing to conduct their Activities outside of Free Zones”, excluding financial establishments licensed in the DIFC.

Article 4 provides three routes: a branch licence within the Emirate; a branch licence operating from the free zone with the headquarters remaining there; or activity-specific permits. A branch licence is valid for one year and renewable for the same period. Articles 5 and 6 require the prior approval of the licensing authority and of the relevant supervisory government entities. Article 13 gives establishments already operating outside their free zone one year to comply, extendable once.

Article 9 required the Department of Economy and Tourism, in coordination with the licensing authorities, to issue the list of activities “within a period not exceeding six (6) months from the effective date of this Resolution”. The six-month deadline expired around 3 September 2025 — roughly a year before this article was published.Reliability caveat: no published list could be found on the Department of Economy and Tourism’s resources, in Dubai Media Office announcements, or in 2026 commentary by international law firms, which continue to describe it as forthcoming. The accurate formulation is “no published list has been identified”, not a categorical assertion that none exists. That list is what determines which activities are available on the mainland and on what terms, so until it appears, planning a mainland model is premature.

The tax side matters more than the licensing side, and it is regularly missed. Resolution No. 11 of 2025 is a licensing liberalisation, not a tax one. Income earned by a free zone company from mainland customers is attributable to a domestic permanent establishment, and Article 5 of Cabinet Decision No. 100 of 2023 expressly treats it as taxable income. It is taxed at 9% and, under Article 4 of the same decision, is excluded from the de minimis computation. In practice, going to the mainland does not destroy QFZP status — but it does not deliver a zero rate on mainland revenue either.

DWTC Against the Other UAE Jurisdictions for Crypto Business

Choosing between DWTC, the DIFC, ADGM and Dubai’s other free zones is a choice of regulator rather than of zone: a licence in one regime does not travel to another.

Feature	DWTC Free Zone	Other Dubai free zones	DIFC	ADGM
Virtual assets regulator	VARA	VARA	DFSA	FSRA
Basis of the perimeter	Dubai Law No. 4 of 2022, Article 3	The same	The carve-out in Article 3 of the same Law	The “finan­cial free zones” carve-out in Article 3 of CR No. 111 of 2022
Corpo­rate licen­sor	DWTC Autho­rity	The relevant zone authority	DIFC Registrar of Companies	ADGM Registration Autho­rity
Licences needed by a VASP	Two — the zone’s and VARA’s	Two	One, within the DIFC	One, within ADGM
Cabinet Resolution No. 111 of 2022 applies	Yes	Yes	No — a finan­cial free zone	No — a finan­cial free zone
Legal system	UAE federal and emirate law	The same	Its own common-law framework	Its own common-law framework
Accepting virtual assets in payment	Gover­ned by the Central Bank’s PTSR	The same	PTSR expressly excludes the finan­cial free zones	The same exclusion

Author’s assessment: what separates DWTC from the DIFC and ADGM is not price or speed but the number of regulatory tiers. A DWTC company operates inside a three-tier structure: a DWTCA commercial licence, a VARA regulatory licence, and federal oversight by the CMA with VARA obliged to share licensee data. A DIFC or ADGM company operates in one tier with one regulator. That does not make DWTC worse — but it does make it more complex, and the complexity has to be budgeted for in both money and time.

The Market in Numbers: How Many VARA Licences Have Actually Been Granted

VARA’s fiftieth VASP licence was issued on 22 June 2026 and announced on 2 July 2026; the regulator’s public register carries 56 entries because it also includes holders of in-principle approval.

Indi­cator	Value
Entries on VARA’s public register	56 — full licences and In-Principle Approval holders combined
The fiftieth VASP licence	Granted to Tribe Tokenisation FZE, number VL/26/06/002, dated 22 June 2026; announced on 2 July 2026
Range of licence dates on the register	2023 to 2026
Rights of an In-Principle Approval holder	“Strictly prohibited from initiating operations” until fully licensed

The register carries no “as at” date and does not separate the two statuses. Named licensees include Binance FZE, Foris DAX Middle East FZE, OKX Middle East Fintech FZE, BitGo Custody MENA FZE and Gate Technology FZE.

In 2026 the register acquired a detail that says more about the federal layer than any commentary.VARA’s public register now carries a “CMA REGISTRATION NUMBER” column, with numbers assigned across essentially the whole book — Tribe Tokenisation FZE’s reads CMA-VASP-0100000-0053. Author’s assessment: this is observable practical evidence that the Capital Market Authority framework of 13 April 2026 reaches existing VARA licensees rather than sitting alongside them. No official transition rule has been published, so it should be stated as practice and not as a rule.

Author’s assessment: the gap between 50 and 56 is not a contradiction. The register includes in-principle approval holders alongside full licensees, and six further weeks passed between 2 July and August 2026. The figure of “39 fully operational VASPs” that circulates in industry commentary is not corroborated by any official source and is not reproduced here.

Supervision has moved into an active phase, and the public sanctions register shows it.

Date	Action
7 October 2025	Fines on 19 firms for unlicensed activity, with “fines ranging from AED 100,000 to AED 600,000, calibrated to the seriousness and scope”; the firms were not named
18 August 2025	Fines on Morpheus Software Techno­logy FZE
22 June 2026	Fines on MX Global LTD (MEXC) — unlicensed broker-dealer and exchange services from 2022 to April 2026 and onboarding users without meeting KYC requirements
22 June 2026	Fines on CoinMENA FZE — “administrative issues with internal systems and controls, resulting in compliance failures with respect to… Anti-Money Laundering programme”
24 June 2026	Fines on Peken Global Limited (KuCoin), following the March 2026 investor alert
24 July 2026	Fines on Shelbit General Trading L.L.C, following a cease-and-desist of January 2025

Investor warnings were issued separately — among them 13 February 2025 on memecoin subscription risk, 25 February 2025 on MKAN Coin, 23 April 2025 and 19 February 2026 on misrepresentation around real estate tokenisation, and 5 March 2026 on KuCoin and MEXC.

A caveat on amounts. Individual fine amounts for the 2026 actions are not published in the regulator’s HTML notices — they sit in separate PDFs. No figure is therefore given here for MEXC, KuCoin, CoinMENA, Shelbit or Morpheus. The only confirmed range is AED 100,000 to AED 600,000, from the collective action of 7 October 2025. No licence revocation appears on the register for the period reviewed: the measures are fines, cease-and-desist orders and public warnings.

Author’s assessment: the shape of the enforcement record is instructive. The 2026 actions target large international venues that had been serving the Dubai market without a licence — and in MEXC’s case the period of breach spans four years. That changes the calculation for anyone contemplating operating “into Dubai” without a local permission: the window of impunity has been closed retrospectively, not only prospectively.

Step-by-Step: Setting Up a Crypto Company in DWTC

The sequence is built around the one-year validity of the non-operational licence, which is the governing constraint on the whole project.

1.        Establish whether your activity falls inside VARA’s perimeter. Eight licensable activities, plus the NOC regime for proprietary trading, plus the two-tier token issuance regime. Technology work such as distributed ledger development needs no VARA licence — and confers no right to provide virtual asset services either.

2.        Check whether your product is removed from VARA altogether. A dirham-referenced stablecoin, and the acceptance of virtual assets in payment for goods and services, fall within the exclusive competence of the Central Bank under the Payment Token Services Regulation.

3.        Size the capital against Rule VI.B.1 of the Company Rulebook — AED 100,000 to AED 1,500,000 depending on activity and on whether an approved custodian is used, plus Net Liquid Assets of at least 1.2 times monthly operating expenses.

4.        Build VARA’s annual supervision fee into the model as a fixed cost — AED 80,000 or AED 200,000 per activity, every year.

5.        File the application with DWTCA together with the document set.

6.        Complete the VARA questionnaire and obtain pre-approval, in parallel with the zone’s initial approval and payment of its fee.

7.        Execute the corporate documents establishing the required capital.

8.        Lease a private physical office within the free zone.

9.        Obtain the Non-Operational Virtual Asset License. The twelve-month clock starts here.

10.    Complete VARA licensing and obtain the VASP licence.

11.    Convert the zone licence into an Operational License.

12.    Build the tax position before operations begin, not after. Determine whether the activity falls within the Qualifying Activities under Ministerial Decision No. 229 of 2025, and model the de minimis threshold — 5% of revenue or AED 5,000,000, whichever is lower.

13.    Assess the VAT position separately from corporate tax. The exemption for transfer and conversion is retroactive, custody charged at an explicit fee is not, and input tax attributable to exempt supplies is not recoverable.

14.    Build the AML framework against Federal Decree-Law No. 10 of 2025 and implement the Travel Rule per VARA’s requirements of 24 February 2026.

15.    If the mainland is in scope, assess the route under Executive Council Resolution No. 11 of 2025 separatelyand budget the 9% rate on mainland revenue.

Common Mistakes and What They Cost

Mistake 1. Assuming a free zone licence permits virtual asset activity. A DWTCA commercial licence is not a regulatory permission; Article 3 of Dubai Law No. 4 of 2022 extends VARA’s regime to every free zone in the emirate except the DIFC. The cost is direct and evidenced: on 7 October 2025 VARA fined 19 firms for unlicensed activity between AED 100,000 and AED 600,000, and in 2026 the actions reached large international venues with a look-back to 2022.

Mistake 2. Missing the one-year validity of the non-operational licence. If the VARA VASP licence is not obtained within the year, the DWTC non-operational licence is not renewed and the fees paid are forfeited. Cost: the complete loss of the time and money invested in the structure, and a fresh start.

Mistake 3. Treating DWTCA as a virtual assets regulator on the strength of the 2021 announcement. The promised framework was never issued, and DWTCA disclaims the role expressly: “any guidance or decisions made by VARA fall outside of our purview of responsibility and liability.” Cost: seeking guidance from the wrong body and building a project on an assurance that binds nobody.

Mistake 4. Planning a dirham stablecoin through a VARA licence. Rule I.B.4 of the Issuance Rulebook expressly removes such an issuance from VARA and place it in the “sole and exclusive regulatory purview of the CBUAE”. Cost: months of work on an application that cannot, by definition, be approved by the body it was filed with.

Mistake 5. Assuming the zero corporate tax rate follows free zone residence. No virtual asset activity is named in the Qualifying Activities under Ministerial Decision No. 229 of 2025, and the recognition of VARA under Decision No. 336 of 2025 covers only fund management and wealth and investment management. Cost: an exchange or brokerage model built on an expectation of 0% meets the 9% rate and breaches the de minimis threshold of 5% or AED 5,000,000.

Mistake 6. Relying on the May 2024 edition of the Free Zone Persons Corporate Tax Guide. It lists the competent authorities without VARA and predates Decision No. 336 of 2025. Cost: concluding that qualifying status is unavailable to a management company, which is wrong as at 2026, and abandoning a structure that is in fact available.

Mistake 7. Treating transfer, conversion and custody of virtual assets as a single exempt category. The retroactive exemption in Article 42(3)(e) of the Executive Regulation covers paragraphs (k) and (l) only; keeping and managing under paragraph (m) is outside it. Cost: underdeclared VAT on custody fees across the whole period of operation, with penalties.

Mistake 8. Overlooking the other side of the retroactive exemption. The exemption runs from 1 January 2018, which carries an obligation to repay input tax previously recovered on what are now exempt supplies. Cost: discovering the liability on audit rather than through voluntary disclosure, with the corresponding difference in penalties.

Mistake 9. Citing Ministerial Decision No. 265 of 2023 or Cabinet Decision No. 55 of 2023. The first was repealed by Article 7 of Ministerial Decision No. 229 of 2025, the second by Article 10 of Cabinet Decision No. 100 of 2023. Cost: a tax position built on a repealed instrument — and, specifically, missing the extension of treasury services to transactions “for its own account”.

Mistake 10. Buying or selling VAT Designated Zone status as an advantage for crypto business. DWTC is not on the list, but more fundamentally Article 51(6) of the Executive Regulation places the supply of services in a Designated Zone inside the State. Cost: paying a premium for a zone status that delivers nothing for virtual asset services.

Mistake 11. Treating a VARA licence as the end of the regulatory question. A federal tier sits above the emirate one: Article 9 of Cabinet Resolution No. 111 of 2022 obliges VARA to hand licensee data to the federal regulator on request, and on 13 April 2026 the CMA issued its own virtual assets framework operating in parallel. Cost: an unbudgeted second supervisory tier and unpreparedness for federal-level enquiries.

Mistake 12. Using the name “Securities and Commodities Authority” in documents and opinions. From 1 January 2026 it has been replaced by “Capital Market Authority” by force of Article 2(3) of Federal Decree-Law No. 32 of 2025 — “wherever it appears in any legislation”. Cost: not legal invalidity, but a direct signal to a counterparty or a bank that the opinion was drafted from stale material.

Who DWTC Suits for Crypto and Fintech, and Who It Does Not

The DWTC Free Zone suits companies that want a central Dubai address and a zone geared to the VARA route, and does not suit anyone expecting a regulatory permission to arrive with the commercial licence.

Who it suits:

•          VASPs that have completed, or are ready to complete, VARA licensing. The zone has built its procedure around that route: the VARA questionnaire sits at step 2, and the non-operational licence exists specifically for the waiting period.

•          Virtual asset managers and advisers. Since VARA’s recognition as a competent authority under Decision No. 336 of 2025, it is fund management and wealth and investment management that have a real prospect of qualifying status for corporate tax.

•          Companies that need a prestigious central address and office infrastructure — DWTC offers private offices, serviced offices and co-working within a single complex.

•          Technology companies with no virtual asset operations — distributed ledger infrastructure developers, who need no VARA licence at all.

Who it does not suit:

•          Anyone looking for a single-regulator jurisdiction. DWTC has three tiers: DWTCA, VARA and the federal layer. The DIFC and ADGM have one.

•          Dirham stablecoin issuers — that issuance is removed from VARA and belongs exclusively to the Central Bank.

•          Anyone not prepared for the one-year non-operational licence deadline and the loss of fees if it is missed.

•          Retail exchanges counting on the zero corporate tax rate — transactions with natural persons are expressly an excluded activity.

•          Anyone who needs predictable published entry costs — DWTC does not publish a tariff.

When professional review is needed:

•          On classifying a token — it may be a virtual asset for AML purposes and not for the VAT exemption; the definitions in the two regimes differ.

•          On the corporate tax treatment of proprietary trading — it is named neither among the excluded activities nor among the qualifying ones; the question is open.

•          Where input VAT has previously been recovered on transactions that turn out to have been exempt retroactively from 1 January 2018.

•          When planning a mainland presence — until publication of the Article 9 list under Resolution No. 11 of 2025 is confirmed.

•          Where the group approaches consolidated revenue of EUR 750 million — at which point the QFZP zero rate ceases to matter because of the top-up tax.

Frequently Asked Questions

Does the DWTC Free Zone regulate cryptocurrency?

No. Virtual assets in DWTC are regulated by VARA. Article 3 of Dubai Law No. 4 of 2022 extends the regime “to the Virtual Asset services provided in all zones across the Emirate, including Special Development Zones and free zones but excluding the Dubai International Financial Centre”. The DWTC Authority issues the commercial licence and incorporates the company. The December 2021 announcement that DWTC would become a virtual assets regulator was never enacted as an instrument.

How many licences does a crypto company in DWTC need?

Two: an operational licence from the DWTC Authority and a VASP licence from VARA. In the zone’s own words: “All applicants must fulfil the requirement of obtaining a VASP License from the Virtual Assets Regulatory Authority (VARA), in combination with an Operational License from DWTC Authority.”

What does a VARA licence cost?

The application fee is AED 40,000 for advisory services and for transfer and settlement services, and AED 100,000 for the other six activities. The annual supervision fee is AED 80,000 and AED 200,000 respectively, per activity.Extending a licence to an additional activity costs 50% of the lower application fee. The main cost is the annual supervision fee, not the one-off application.

What capital does VARA require?

From AED 100,000 for advisory services to AED 1,500,000 for exchange services without an approved custodian.Most activities apply a “higher of a fixed sum or 15% or 25% of fixed annual overheads” test. A liquidity measure applies in addition: Net Liquid Assets of at least 1.2 times monthly operating expenses, reconciled daily and reported monthly.

What happens if the VARA licence is not obtained within a year?

The DWTC non-operational licence will not be renewed, and the fees paid are forfeited. Verbatim from DWTCA’s guidelines: “If the applicant does not obtain the VASP License from VARA within the one-year validity of the Non-Operational License issued by DWTC Authority, the non-operational license will not be renewed.”

Does a crypto company in a free zone pay corporate tax?

Yes, at 9%, unless its activity falls within the Qualifying Activities. No virtual asset activity is expressly named in the list under Ministerial Decision No. 229 of 2025. The exception arrived in February 2026: Decision No. 336 of 2025 recognised VARA as a competent authority for fund management and for wealth and investment management, opening the zero rate to those two activities. The de minimis threshold for non-qualifying revenue is 5% of revenue or AED 5,000,000, whichever is lower.

Is cryptocurrency subject to VAT in the UAE?

Transfer of ownership and conversion of virtual assets are exempt retroactively from 1 January 2018 under Article 42(3)(e) of the Executive Regulation as amended by Cabinet Decision No. 100 of 2024. Keeping and managing virtual assets under paragraph (m) is not within that retroactive exemption and is taxable where an explicit fee is charged.Mining on own account is not a taxable supply; mining on behalf of another person is.

Is DWTC a VAT Designated Zone?

No — DWTC does not appear in the list under Cabinet Decision No. 59 of 2017. But for crypto business the status is irrelevant: Article 51(6) of the Executive Regulation places the supply of services in a Designated Zone inside the State, and transfer, conversion and custody of virtual assets are services. Designated Zone status is a goods construct.

Is a VARA licence required for proprietary trading?

No — an NOC is required. Per VARA: “VA Proprietary Trading will require a VARA NOC to confirm that the VA activity may be undertaken with regulatory oversight without a VA Licence.” Registration applies to proprietary trading above AED 1 billion in monthly rolling volume; the annual NOC fee is AED 1,000 per the 2023 clarification.

Can a dirham-referenced stablecoin be issued under a VARA licence?

No. Rule I.B.4 of the Issuance Rulebook: such an issuance “shall not be approved under this VA Issuance Rulebook or the FRVA Rules, and shall remain under the sole and exclusive regulatory purview of the CBUAE”. Stablecoins referenced to other fiat currencies, and asset-referenced tokens, are licensed by VARA under VA Issuance – Category 1, subject to 100% reserve backing.

What changed in VARA’s rules in 2026?

The principal change is the exchange-traded derivatives regime in force from 31 March 2026. The new Part V of the Exchange Services Rulebook permits futures, options, contracts for difference and perpetuals under a permanent regime for the first time, capping retail leverage at 5-to-1, setting minimum initial margin at 20% and requiring the funding rate on perpetuals to be calculated no less than three times per day. Guidance on the Virtual Asset Issuance Rulebook followed on 9 April 2026.

Can a DWTC company serve clients on the Dubai mainland?

Yes, under Executive Council Resolution No. 11 of 2025 of 3 March 2025 — through a branch licence or an activity-specific permit. But mainland income is attributable to a domestic permanent establishment and is taxed at 9% under Article 5 of Cabinet Decision No. 100 of 2023, while being excluded from the de minimis computation.Publication of the activity list that the Department of Economy and Tourism was required to issue under Article 9 could not be confirmed.

Key Takeaways

•          The DWTC Free Zone was created by Article 3 of Dubai Law No. 9 of 2015, issued 11 April 2015, together with the DWTC zone itself and the DWTC Authority; there is no separate free zone decree.

•          DWTCA is a corporate registrar and commercial licensor, not a financial regulator. Law No. 9 of 2015 contains no provision conferring financial supervisory powers on it.

•          DWTCA’s crypto regime was announced on 20 December 2021 but never issued; ten weeks later, on 28 February 2022, Dubai Law No. 4 of 2022 was made. There was nothing to repeal.

•          Article 3 of Law No. 4 of 2022 extends VARA’s regime to every zone in Dubai including the free zones, except the DIFC; Article 4 of Cabinet Decision No. 112 of 2022 confirms it independently.

•          Article 4 of Law No. 4 of 2022: “VARA will be affiliated to the DWTC Authority” — crypto did not leave DWTCA, it was carved out into a separate regulator beneath it.

•          Two licences are required: the DWTC Authority operational licence and the VARA VASP licence. VARA’s pre-approval comes before the zone’s licence is issued.

•          The DWTC non-operational licence lasts one year; without the VASP licence in that period it is not renewed and the fees are forfeited.

•          VARA licenses eight activities, not seven: VA Issuance – Category 1 has been added.

•          VARA capital runs from AED 100,000 to AED 1,500,000, plus Net Liquid Assets of at least 1.2 times monthly operating expenses.

•          VARA fees: AED 40,000 or AED 100,000 per application and AED 80,000 or AED 200,000 in annual supervision fees, per activity.

•          From 31 March 2026 an exchange-traded derivatives regime applies: retail leverage no greater than 5-to-1, initial margin no less than 20%, and perpetual funding rates struck at least three times a day.

•          Dirham stablecoins are removed from VARA entirely and belong to the exclusive competence of the Central Bank.

•          From 1 January 2026 the SCA was replaced by the Capital Market Authority, with the substitution operating “wherever it appears in any legislation”; on 13 April 2026 the CMA issued its own virtual assets framework running in parallel with VARA’s.

•          Ministerial Decision No. 265 of 2023 has been repealed; Ministerial Decision No. 229 of 2025 governs and widened treasury services to transactions on own account. Federal Decree-Law No. 47 of 2022 itself has been amended three times, not twice: by Nos. 60 of 2023, 40 of 2024 and 28 of 2025.

•          Decision No. 336 of 2025 recognised VARA as a competent authority only for fund management and wealth and investment management — no other VASP activity is on the Qualifying Activities list.

•          VAT: transfer and conversion are exempt retroactively from 1 January 2018; keeping and managing are not.

•          DWTC is not a VAT Designated Zone, and for services the status would make no difference under Article 51(6) of the Executive Regulation; the list itself has grown from 20 zones in 2017 to 23, and should be cited “as subsequently amended”.

•          Directive on Tax Transactions No. 3 of 2026, published on 17 July 2026, requires digital currency values to be converted into dirhams at the average rate of three platforms from an approved list, with the same set of platforms used throughout the calendar year.

Summary

The Dubai World Trade Centre Free Zone was created by Article 3 of Dubai Law No. 9 of 2015, issued on 11 April 2015, which in a single instrument established the DWTC zone, the Dubai World Trade Centre Authority as a public corporation and the free zone within it; Article 5 empowers DWTCA to register and license companies and to determine permitted activities, Article 22 removes free zone companies from the reach of Dubai Municipality and the Department of Economic Development, and Article 34 supersedes Law No. 10 of 2008. The entity forms are the FZE with one shareholder, the FZCO with two or more and the branch; shares have a nominal value of AED 1,000, there is no single minimum capital figure, the visa quota is one visa per 7.4 square metres of leased space, and the zone publishes no tariff. DWTCA is not a virtual assets regulator: the framework announced on 20 December 2021 as a “comprehensive zone and regulator for virtual assets and crypto” was never enacted, and ten weeks later, on 28 February 2022, Dubai Law No. 4 of 2022 was issued, Article 3 of which extends the regime to all zones in the emirate including free zones but excluding the DIFC, Article 6 of which makes VARA the competent entity, and Article 4 of which provides that VARA is affiliated to the DWTC Authority. The same follows from the federal instrument: Article 4 of Cabinet Decision No. 112 of 2022 confines VARA’s powers to the Emirate of Dubai and the free zones within it, while Article 3 of Cabinet Resolution No. 111 of 2022 excludes the financial free zones. A company needs two licences — an operational licence from the DWTC Authority and a VASP licence from VARA — with VARA’s pre-approval obtained at the second of six steps, and the zone’s non-operational licence lasting one year, after which it is not renewed without the VASP licence and the fees paid are forfeited. VARA licenses eight activities: advisory, broker-dealer, custody, exchange, lending and borrowing, management and investment, transfer and settlement, and Category 1 virtual asset issuance; proprietary trading requires an NOC above AED 1 billion in monthly rolling volume, and NFT marketplaces require an exchange or broker-dealer licence. Paid-up capital under Rule VI.B.1 of the Company Rulebook runs from AED 100,000 for advisory services to AED 1,500,000 for exchange services without an approved custodian, with an alternative of 15% or 25% of fixed annual overheads and a Net Liquid Assets measure of at least 1.2 times monthly operating expenses; application fees are AED 40,000 or AED 100,000, annual supervision fees AED 80,000 or AED 200,000 per activity, and extensions cost 50% of the lower application fee. Four rulebooks are compulsory — Company, Compliance and Risk Management, Technology and Information, and Market Conduct; the activity rulebooks were reissued on 19 May 2025 with compliance required by 19 June 2025, and the Exchange Services Rulebook effective 31 March 2026 permits exchange-traded derivatives for the first time, with retail leverage capped at 5-to-1, initial margin of at least 20% and perpetual funding rates calculated at least three times a day. A dirham-referenced stablecoin is removed from VARA by Rule I.B.4 of the Issuance Rulebook and belongs to the exclusive purview of the Central Bank under the Payment Token Services Regulation, circular C 2/2024 of 31 August 2024; FRVAs in other currencies and asset-referenced tokens are licensed by VARA under VA Issuance – Category 1 with 100% reserve backing. From 1 January 2026 the Securities and Commodities Authority was replaced by the Capital Market Authority under Federal Decree-Law No. 32 of 2025, Article 2(3) of which substitutes the designation “wherever it appears in any legislation”, and on 13 April 2026 the CMA issued a virtual assets framework of five modules and eight regulated activities operating in parallel with VARA’s regime. For corporate tax, no virtual asset activity appears in the Qualifying Activities under Ministerial Decision No. 229 of 2025, issued 28 August 2025 with effect from 1 June 2023 and repealing Ministerial Decision No. 265 of 2023; Decision No. 336 of 2025, announced by the Ministry of Finance on 11 February 2026, added VARA to the definition of Competent Authority for fund management services and wealth and investment management services only, and the de minimis threshold is 5% of revenue or AED 5,000,000, whichever is lower. For VAT, the transfer of ownership and the conversion of virtual assets are exempt retroactively from 1 January 2018 under Article 42(3)(e) of the Executive Regulation as amended by Cabinet Decision No. 100 of 2024, while keeping and managing under paragraph (m) sit outside the retroactive exemption; DWTC does not appear in the VAT Designated Zones list under Cabinet Decision No. 59 of 2017, but the status is immaterial for services under Article 51(6). Economic Substance reporting for financial years after 31 December 2022 was withdrawn by Cabinet Decision No. 98 of 2024, the governing AML instrument is Federal Decree-Law No. 10 of 2025 of 30 September 2025 which repealed Federal Decree-Law No. 20 of 2018, and Crypto-Asset Reporting Framework exchange begins in 2027 with the first exchanges in 2028. VARA’s fiftieth VASP licence was issued on 22 June 2026 and announced on 2 July 2026, against 56 entries on a public register that also includes in-principle approval holders, and on 7 October 2025 it fined 19 firms between AED 100,000 and AED 600,000 for unlicensed activity.

Planning a crypto or fintech structure in Dubai and weighing DWTC against the DIFC and ADGM?UPPERSETUP’s specialists can map the regulatory perimeter and the tax consequences before anything is filed, and register the company in the right zone. Related reading: Free Zone or Mainland in the UAE 2026 and Corporate Audit Requirements in the UAE 2026.

Sources

The zone’s constitutive instruments and rules

1.        Law No. (9) of 2015 Concerning the Dubai World Trade Centre — Dubai Legislation Portal

2.        Law No. (9) of 2015 — PDF text

3.        DWTC Free Zone Rules and Regulations V14

4.        DWTC Free Zone Company Regulations V7

5.        DWTC — free zone regulations index

6.        DWTC Free Zone — main page

7.        DWTC — resident packages

8.        DWTC — licence renewal, August 2025

9.        DWTC — corporate tax paper for free zone companies, July 2025

Virtual assets in DWTC: the 2021 announcements and the position in force

10.    Regulator’s press release on the agreement with DWTCA, 22 September 2021

11.    DWTC — the same announcement on the zone’s site

12.    DWTC — “comprehensive zone and regulator” announcement, 20 December 2021

13.    Dubai Media Office — release of 20 December 2021

14.    DWTC — securing a virtual assets licence

15.    DWTCA — Application Guidelines for virtual asset activity licences

16.    DWTC — TheBlock ecosystem platform

The virtual assets regime: emirate and federal levels

17.    Law No. (4) of 2022 Regulating Virtual Assets in the Emirate of Dubai — Dubai Legislation Portal

18.    Law No. (4) of 2022 — text hosted by VARA

19.    VARA — laws and regulations index

20.    Cabinet Resolution No. (111) of 2022 — federal legislation portal

21.    Cabinet Resolution No. (111) of 2022 — full text

22.    Cabinet Decision No. (112) of 2022 on delegating competencies

23.    Cabinet Resolution No. (99) of 2024 on violations and administrative penalties

24.    VARA — official site

25.    VARA — FAQ: licensed activities, proprietary trading, NFTs

VARA rulebooks and regulations

26.    VARA — rulebooks index

27.    VARA — revision tracker

28.    Company Rulebook

29.    Company Rulebook — Rule VI.B.1 on paid-up capital

30.    Company Rulebook — Rule VI.C on Net Liquid Assets

31.    Virtual Assets and Related Activities Regulations 2023 — version of 19 May 2025, Schedule 2 fees

32.    Exchange Services Rulebook — version effective 31 March 2026

33.    Exchange Services Rulebook — margin and leverage limits

34.    Exchange Services Rulebook — perpetual derivatives

35.    Virtual Asset Issuance Rulebook

36.    Virtual Asset Issuance Rulebook — PDF text

37.    Regulations on the Marketing of Virtual Assets and Related Activities 2024

38.    VARA — Marketing Regulations page with revision history

39.    VARA — updated activity rulebooks, 19 May 2025

40.    VARA — clarification on fees, 22 June 2023

41.    VARA — news and circulars index

VARA supervision, register and enforcement

42.    VARA — public register of licensees

43.    VARA — regulatory notices and enforcement

44.    VARA — fines on 19 firms for unlicensed activity, 7 October 2025

45.    VARA — notice of fines, MX Global LTD (MEXC)

46.    VARA — notice of fines, CoinMENA FZE

The federal financial layer

47.    Federal Decree-Law No. (32) of 2025 Regarding the Capital Market Authority — federal legislation portal

48.    Federal Decree-Law No. (32) of 2025 — full text

49.    Federal Decree-Law No. (33) of 2025 on the regulation of capital markets

50.    Capital Market Authority — official page on the new decree-laws

51.    Federal legislation portal — announcement of the two decree-laws

52.    Central Bank of the UAE — Payment Token Services Regulation

53.    Federal Decree-Law No. (10) of 2025 on anti-money laundering — full text

54.    Cabinet Resolution No. (134) of 2025 — Executive Regulations of Federal Decree-Law No. 10 of 2025

55.    Cabinet Resolution No. (83) of 2025 on fees for services to virtual asset service providers

56.    Cabinet Resolution No. (83) of 2025 — full text

The tax layer

57.    Federal Decree-Law No. (47) of 2022 Concerning Corporate and Business Tax

58.    Federal Decree-Law No. (47) of 2022 — Ministry of Finance translation

59.    Federal Decree-Law No. (60) of 2023 amending Decree-Law No. 47 of 2022

60.    Cabinet Decision No. (100) of 2023 on Qualifying Income — full text

61.    Ministerial Decision No. (229) of 2025 on Qualifying and Excluded Activities

62.    Ministerial Decision No. (265) of 2023 — the repealed predecessor, for tracing the chain

63.    Ministry of Finance — announcement recognising VARA as a competent authority, 11 February 2026

64.    Cabinet Decision No. (142) of 2024 on top-up tax for multinational groups — full text

65.    Ministry of Finance — announcement on the introduction of top-up tax, 7 February 2025

66.    Ministry of Finance — tax legislation index

67.    Executive Regulation of Federal Decree-Law No. 8 of 2017 on VAT, consolidated text

68.    Federal Tax Authority — legislation and clarifications register

69.    Federal Decree-Law No. 47 of 2022, consolidated text carrying all three amendments

70.    Ministry of Finance — signing of the Crypto-Asset Reporting Framework agreement, 20 September 2025

Mainland access

71.    Executive Council Resolution No. (11) of 2025 Regulating the Conduct of Free Zone Establishments’ Activities within the Emirate of Dubai

Commentary used for cross-checking (Level 2)

72.    Clyde & Co — UAE virtual assets update, Q2 2026

73.    Pinsent Masons — VARA’s derivatives regime, 27 April 2026

74.    Gulf News — the CMA virtual assets framework, 13 April 2026

75.    Gulf News — VARA recognised as a competent authority for corporate tax, 11 February 2026

76.    DLA Piper — the regulatory landscape for digital assets in the UAE, 2025

77.    DLA Piper — amendments to the VAT Executive Regulation, November 2024

78.    DLA Piper — VAT law amendments effective 1 January 2026

79.    KPMG — updated rules for Qualifying Free Zone Persons after Decisions Nos. 229 and 230 of 2025

80.    KPMG — public clarification on cryptocurrency mining, VATP039

81.    KPMG — public clarification VATP040 on the VAT Executive Regulation amendments

82.    PwC — Ministerial Decisions Nos. 229 and 230 of 2025 on the Qualifying Free Zone Person regime

83.    PwC — the Federal Tax Authority’s Free Zone Persons guide

84.    Deloitte — amendment to the Economic Substance Regulations, October 2024

85.    Grant Thornton — reproduction of Cabinet Decision No. 59 of 2017 on Designated Zones

86.    Charles Russell Speechlys — virtual currency regulation in the UAE

87.    Al Tamimi — the UAE capital markets reset under the new federal laws

88.    KPMG — Federal Decree-Laws Nos. 16 and 17 of 2025 on VAT

89.    PwC — FTA Decision No. 6 of 2026 on Designated Zone distribution

90.    BDO — Public Clarification VATP040 of 14 March 2025

91.    Reed Smith — Executive Council Resolution No. 11 of 2025 and mainland access

92.    Afridi & Angell — the composition of the VAT Designated Zones list

This material is provided for information purposes only and does not constitute legal, tax, financial, investment or consulting advice. Before taking any decision, obtain individual professional advice that takes account of the specific situation, jurisdiction, company status and the regulators’ requirements in force.

Content current as at: August 2026.