Look, here's something that keeps coming up in conversations with Korean crypto founders lately. While everyone back home is still waiting for regulations that keep getting pushed back—the crypto tax was supposed to hit in 2023, then 2025, now it's 2028—Dubai's already licensed 36 companies and somehow has 850 more in the queue.
Kind of wild when you think about it. They literally built the world's first dedicated crypto regulator in 2022 and just... made it work.
Why Every Korean Founder I Meet Asks About Dubai
So here's the thing. Korean crypto entrepreneurs aren't naive about regulations. They've been dealing with VAUPA since July 2024, doing asset segregation, running strict KYC. Korea even got recognized alongside Dubai and Switzerland as one of the most crypto-friendly countries last year.
But there's this gap nobody really talks about. Korea still doesn't have clear licensing pathways for most crypto activities. Want to launch a new exchange? Good luck. Upbit and Bithumb own 80% of the market, and the regulatory barriers for new players are... let's just say substantial.
Dubai's VARA is different. Not easier—actually harder in some ways, which surprises people—but at least you know what you're dealing with.
The Real Numbers (Because This Is Always Question Number One)
Every single Korean founder who reaches out about VARA asks about cost first. Can't blame them. So here's what you're actually looking at right now in October 2025, not some outdated blog post from 2023:
Initial application fees:
- First regulated activity: AED 100,000 (roughly ₩36 million)
- Each additional activity: AED 50,000 (about ₩18 million)
Annual supervision fees (this is the recurring cost that catches people):
- Core services like exchange, custody, broker-dealer: AED 200,000 per activity (around ₩72 million every year)
- Advisory or transfer services: AED 80,000 per activity (₩29 million annually)
Minimum capital requirements:
- Basic advisory: AED 100,000 (₩36 million)
- Exchange or broker-dealer: AED 1.5 million minimum, or a percentage of your fixed annual overhead if that's higher (that's ₩540 million+)
- Plus you need liquid assets at 1.2 times your monthly operating expenses
Korean startups always underestimate what I call the "soft costs" though. Compliance consulting? Typically AED 500,000-600,000 (₩180-216 million). Office setup in a free zone adds anywhere from AED 50,000 to 300,000 depending on how fancy you want to go. And you absolutely need two "responsible individuals" who are UAE residents or citizens—you can't just fly people in and out from Seoul when VARA wants to meet.
If you're planning a basic exchange operation, first-year total? You're looking at around AED 2-2.5 million (₩720-900 million) in actual money spent, plus the capital that sits there locked up.
That's not counting your Seoul office costs or the salary for whoever's running the Dubai side.
The Eight License Types (And What Korean Startups Actually Go For)
VARA splits everything into eight distinct virtual asset activities. Each one needs its own license, which is honestly kind of annoying:
Exchange Services - Pretty straightforward. Crypto-to-crypto or crypto-to-fiat trading platforms. This is what most Korean founders want because it's what they know from home.
Broker-Dealer Services - You're the intermediary for client trades. Usually gets combined with an exchange license because otherwise what's the point.
Custody Services - Holding virtual assets for clients. If you're keeping customer funds, you need this.
Advisory Services - Investment advice on virtual assets. Lowest barrier to entry at AED 40,000 application fee, but also... not what most people are actually trying to do.
Lending and Borrowing Services - DeFi protocols, lending platforms, that whole world.
Management and Investment Services - Running funds or portfolios with virtual assets.
Transfer and Settlement Services - Moving VAs between parties.
VA Issuance - Token launches, distribution, the works.
Most Korean exchange operators end up needing at least three: Exchange + Broker-Dealer + Custody. That's AED 300,000 just to apply, and AED 600,000 every single year in supervision fees.
Adds up fast.
The Timeline (Spoiler: Not Seoul Speed)
Korean startups are used to moving quickly. Seoul's tech scene doesn't waste time. Dubai... Dubai's on a different schedule.
VARA says 2-6 months for straightforward applications. In reality? For Korean companies, 6-12 months is way more common.
Why so long? The two-stage process creates natural bottlenecks:
Stage 1 - Approval to Incorporate: You submit this Initial Disclosure Questionnaire through Dubai Economy & Tourism or one of the free zone authorities. Business plan, who owns what, background checks on everyone important. Pay half the application fee upfront. Then wait.
At this point, you still can't do anything. You're literally just getting permission to set up the company structure.
Stage 2 - The Actual VASP License: This is where it gets real. You need compliance documentation—AML/CFT policies, risk management frameworks, cybersecurity protocols, market conduct procedures. All of it has to be actually detailed, not high-level outlines. You demonstrate you've hired qualified compliance officers and an MLRO. Show you have the capital and infrastructure. Submit everything to VARA.
They're going to come back with questions. Multiple rounds. I've seen companies go through five or six iterations of their compliance documents.
Then you pay the other half of the application fee plus the first year's supervision fee, and wait for them to issue the license.
Korean founders tend to hit friction at the policy documentation stage. VARA wants detailed compliance manuals with procedures mapped out, not the conceptual frameworks that work for Korean regulatory submissions. The AML/CFT stuff has to meet FATF standards, which means actual transaction monitoring systems, sanctions screening infrastructure, suspicious activity reporting capabilities—not just KYC forms you fill out.
What Korean Compliance Teams Don't Expect (The Rulebook Maze)
This is where Korean startups really stumble. Back home, you've got one set of regulations to follow. Maybe they're strict, but they're one thing.
VARA makes you comply with four mandatory rulebooks at the same time:
Company Rulebook - Corporate governance, capital requirements, who can work for you, what happens if you shut down.
Compliance & Risk Management Rulebook - Risk assessments, AML/CFT controls, regulatory reporting. They updated this to Version 2.0 in May 2025 with stricter rules on margin trading and collateral. Everyone had to comply by June 19, 2025.
Technology & Information Rulebook - Cybersecurity, data protection, making sure your systems don't fall over, what you do when something goes wrong.
Market Conduct Rulebook - How you write client agreements, handle complaints, do marketing. They changed a bunch of stuff in October 2024.
Plus there are activity-specific rulebooks for whatever services you're licensed for.
Korean compliance professionals need to understand something: these aren't guidelines. VARA actually audits you. They show up at your office. They go through your systems. BitOasis got their license yanked in 2024 just three months after getting it because they didn't meet certain conditions.
They're not playing around.
The Weird Korean Advantage Nobody Talks About
Despite all this complexity, Korean crypto startups actually have one advantage that people don't realize.
You're already used to strict regulations.
VAUPA requires asset segregation? VARA wants the same thing—100% of client liabilities held as reserve assets, reconciled every day, audited twice a year.
Korean exchanges do transaction monitoring? VARA expects risk-based transaction monitoring with sanctions screening too.
Korea makes you implement security measures? VARA's Technology & Information Rulebook wants similar cybersecurity protocols.
The gap isn't about whether you can do what VARA requires. Korean startups absolutely can. They struggle with how you document it and what the operational expectations actually look like. Korean teams know how to build secure, compliant platforms. They just need to translate that into the formal policy frameworks VARA wants to see.
Where the Capital Requirements Actually Hurt
The capital math works differently in Dubai. In Korea, you lock up funds but the regulatory framework is relatively stable and you know what you're dealing with.
VARA requires:
- Paid-up capital specific to what you're doing
- Net liquid assets at 1.2 times your monthly operating expenses
- 100% client asset reserves
- Daily reconciliations with quarterly reporting to VARA
So for a Korean startup planning an exchange, that AED 1.5 million minimum (₩540 million) isn't actually the ceiling. If your monthly operational expenses hit AED 100,000—which they will if you're running a real operation—you need AED 120,000 in liquid assets on top of the minimum capital requirement.
And that gets recalculated every month.
Korean founders who are used to lean operational models find this really challenging. You can't bootstrap your way through VARA licensing. The capital requirements are real and they stay real.
The UAE Resident Thing (And How Korean Startups Actually Handle It)
VARA says you need two "responsible individuals" who must be UAE residents or passport holders. This isn't some formality where you just list someone's name.
These people are:
- Your Compliance Officer (needs 2+ years of actual AML/CFT experience)
- Your Money Laundering Reporting Officer (MLRO)
I've seen Korean founders handle this three different ways:
Option 1: Actually relocate key team members. Get UAE residency through the company. This works but takes time and you need someone willing to move.
Option 2: Hire UAE-based compliance professionals. Expensive option—qualified compliance officers in Dubai make salaries comparable to what you'd pay top-tier people in Seoul.
Option 3: Structure a joint venture with Dubai-based partners who can provide the resident personnel. Some Korean startups go this route.
None of these are quick solutions. You're looking at 3-6 months minimum to get this properly set up.
What Those Marketing Regulations Actually Mean
VARA implemented new Marketing Regulations in October 2024. If you're a Korean crypto company used to aggressive digital marketing... you need to understand this part.
Only VARA-licensed entities can market VA activities in or targeting Dubai.
Not "we're applying for a license." Not "we're in the process." Licensed. Present tense. Already done.
This affects Korean exchanges that have UAE users. If you're not licensed yet and you're promoting your services to Dubai residents—even through social media, even through Korean-language channels that happen to reach UAE-based Koreans—you're technically in violation.
The regulations cover "marketing, advertising, and promotional communications." That's deliberately broad. It includes:
- Educational content if it promotes specific services
- Social media posts
- Influencer partnerships
- Event sponsorships
- Even blog posts if they're basically promotional
VARA takes enforcement seriously. You're better off waiting until you're properly licensed than risking regulatory action before you even start operating.
The Legacy Permit (If You Were Already There)
Korean companies that were already offering services to Dubai users before February 2023 had this option called a Legacy Operating Permit.
The benefits were actually pretty good:
- Up to 50% discount on licensing fees
- Reduced capital requirements
- 12-month transition period to meet full compliance
But—and this is a big but—the LOP program had deadlines. November 2023 for most applicants. If your Korean startup missed those deadlines, you're in the full licensing pathway now. No discounts, no transition period.
Some Korean companies did benefit from this. The ones that moved early got breathing room to build proper compliance while operating under temporary authorization. But that window's closed now.
When Korean Startups Should Actually Consider This
Look, not every Korean crypto startup needs Dubai. I'm being serious.
You should consider VARA if:
- You're targeting global markets, not just serving Korean users
- You need regulatory clarity for partnerships with institutions
- You can commit significant capital (think ₩500 million+ and you're still comfortable)
- Your team can actually relocate or you can afford to hire UAE-based personnel
- You're planning multi-year operations, not trying to pivot every six months
VARA probably isn't right if:
- You're early-stage and watching every million won
- Your user base is primarily Korean anyway
- You're still figuring out product-market fit
- The capital requirements make you nervous
- You're looking for some kind of regulatory arbitrage
Dubai isn't a shortcut around Korean regulations. It's a parallel path with completely different tradeoffs.
What Seoul Founders Get Wrong About Dubai Setup
Let me list out the misconceptions I hear constantly from Korean entrepreneurs:
"Dubai is a crypto free-for-all" - Actually it's the opposite. VARA's rulebooks are more comprehensive than most Korean regulations. The advantage is clarity about what's required, not that it's somehow easier or more lenient.
"We can do this remotely from Seoul" - No. You can't. You need actual physical presence in Dubai. Office space. Local personnel. Regular face-to-face engagement with regulators. Korean founders who try to run Dubai operations from Gangnam fail every time.
"Free zones mean no rules apply" - Free zones offer corporate structure benefits like 100% foreign ownership and tax advantages. But VARA's jurisdiction extends across Dubai mainland and all the free zones except DIFC. Same regulations apply everywhere.
"English documentation is enough" - For VARA itself, yes, English works. But for UAE banking relationships, corporate services, day-to-day operational matters, having Arabic language support helps a lot. Korean startups underestimate how important local relationships are.
"Once we get licensed, we're done" - Getting the license is just the beginning. Then you have annual supervision fees. Regular audits. Compliance reporting. VARA actively reviews how you're operating. Korean companies used to "set and forget" licensing approaches find this jarring.
The Post-License Reality Your Team Should Prepare For
Getting the license is one milestone. Actually operating under it requires sustained effort that a lot of teams aren't ready for:
Monthly obligations:
- Financial statements go to VARA
- Transaction reconciliation reports
- Disclosure of virtual asset wallet addresses
Quarterly requirements:
- Risk reporting to your board
- Compliance review documentation
- Updated business metrics
Annual mandates:
- External audit of financial statements
- Review and attestation of AML/CFT policies
- License renewal (you pay supervision fees 90 days before expiration or they'll let it lapse)
- Documentation that your staff received required training
Korean compliance teams need to build actual systems for this. It's not burdensome if you plan for it, but it's definitely more than what most Korean exchanges currently do domestically.
Learning From The Companies That Actually Got Licensed
Of the 36 companies that got VARA licenses through August 2025, you can see some clear patterns:
The big global players moved first. Binance, OKX, Bybit, Crypto.com all have Dubai licenses now. These companies had the resources to navigate complexity and could absorb the costs.
Institutional players are coming in. Laser Digital from Nomura got the first OTC derivatives license. Gate.io got approval for OTC and exchange services. The trend is clearly toward sophisticated institutional offerings, not retail-focused consumer plays.
Nobody compressed the timeline magically. The companies that got licensed quickly all had the same things: strong compliance teams already in place, adequate capital from day one, clear documentation prepared before they even applied. There were no shortcuts.
Free zone choice actually matters. Dubai World Trade Centre and Dubai Multi Commodities Centre are the popular choices. Both offer 100% foreign ownership. DWTC is slightly more streamlined specifically for virtual asset activities.
Korean startups looking at Dubai should study these success cases carefully. The companies that got licensed weren't necessarily the most innovative or the ones with the best tech. They were the most prepared for what VARA actually requires.
If You're a Korean Founder Seriously Considering This
Three things you need to do before you commit any resources:
First, run the real numbers. Not just the application fees everyone talks about. Calculate the total cost of operating a compliant VARA-licensed entity for 18 months minimum. Include office rent, staff salaries, compliance consulting, annual audits, buffer for capital requirements, travel costs. If that total number makes you uncomfortable, you should wait.
Second, honestly assess your team's commitment to having actual Dubai presence. This isn't a remote operation you manage from Seoul. Someone senior needs to be there in person, engaging with regulators, building relationships, managing day-to-day operations. Korean founders consistently underestimate this requirement.
Third, get expert guidance early in the process. VARA licensing isn't something you figure out as you go along. Companies that try to DIY the process burn through cash making avoidable mistakes. Engage experienced VARA consultants during Stage 1, not after you've already hit problems in Stage 2.
Bottom Line
Dubai's VARA framework genuinely offers Korean crypto startups real opportunities. Regulatory clarity that actually exists. Global credibility with institutions. Access to capital markets. Tax advantages (0% personal income tax, 9% corporate tax only on profits above AED 375,000).
But it's not some kind of hack or shortcut. It's a serious commitment of capital, time, and operational focus. Korean startups succeed in Dubai when they approach it strategically—not as regulatory arbitrage or some workaround, but as a legitimate business expansion into a well-regulated international market.
Those 850 companies waiting for VARA licenses include plenty of Korean entrepreneurs. Some will succeed and build real businesses. Many will realize halfway through that Dubai wasn't actually the right fit for their current stage.
Before you join that queue, make absolutely sure you're ready for what VARA actually requires.
Not what some blog post from 2023 said. Not what a consultant promises in their marketing pitch. What it actually requires right now in October 2025.
Disclaimer: This article is for educational and informational purposes only and should not be considered as financial, investment, or trading advice; always conduct your own research and consult with a qualified financial advisor before making any investment decisions.