UAE MoF Designates VARA as Competent Authority for Fund and Wealth Management Activities
The UAE Ministry of Finance has issued Ministerial Decision No. (336) of 2025, formally designating the Virtual Assets Regulatory Authority (VARA) as a “Competent Authority” for qualifying activities related to wealth and investment management services and fund management services under Ministerial Decision No. (229) of 2025.
The move integrates Dubai’s virtual asset regulator into the federal corporate tax framework, providing clarity for digital asset fund and wealth management structures operating in the emirate.
What the UAE MoF Decision Means
Under Ministerial Decision No. (229) of 2025, certain activities qualify for favorable corporate tax treatment — particularly for Qualifying Free Zone Persons (QFZPs).
Among those activities:
- Fund management services
- Wealth and investment management services
However, these activities only qualify if they are conducted under the supervision of a recognized “Competent Authority in the State.”
Ministerial Decision No. (336) now confirms that VARA meets that definition.
In practical terms, this means that digital asset fund and wealth management activities supervised by VARA can fall within the qualifying activity framework of the UAE Corporate Tax regime, subject to compliance with Free Zone conditions.
Tax Clarification — Not New Licensing Powers
The decision does not expand VARA’s regulatory mandate.
VARA already supervises virtual asset service providers in Dubai, including portfolio managers and certain fund-related activities involving digital assets.
What changes is tax recognition.
By formally acknowledging VARA as a Competent Authority, the UAE Ministry of Finance removes ambiguity regarding how VARA-supervised fund and wealth management activities interact with corporate tax qualification rules.
This is a structural clarification, not a regulatory expansion.
Implications for DMCC and DWTC Companies
For companies operating within:
- Dubai Multi Commodities Centre (DMCC)
- Dubai World Trade Centre (DWTC)
The impact is most relevant for firms engaged in digital asset portfolio management or fund management.
If such companies:
- Operate as Free Zone entities,
- Hold VARA supervision or licensing,
- Meet Qualifying Free Zone Person requirements,
Their fund and wealth management activities may qualify under the UAE corporate tax regime.
This enhances tax certainty for Dubai-based digital asset investment structures.
No Conflict with CMA, DIFC, or ADGM
The decision does not alter jurisdictional boundaries.
The UAE maintains a layered regulatory framework:
- The Capital Markets Authority (CMA) supervises traditional securities and capital markets at the federal level.
- The Financial Services Regulatory Authority (FSRA) regulates financial services within ADGM.
- The Dubai Financial Services Authority (DFSA) regulates financial services within DIFC.
- VARA supervises virtual assets in Dubai (outside DIFC).
Ministerial Decision No. (336) does not redefine asset classification and does not shift authority between regulators.
It aligns VARA-supervised activities with federal corporate tax definitions.
Strategic Significance for the UAE Digital Asset Ecosystem
The designation of VARA as a Competent Authority under Ministerial Decision No. (229) signals a deeper phase of institutional integration.
The UAE is embedding digital asset fund and wealth management activities into its formal tax architecture.
This development:
- Strengthens regulatory coherence between emirate-level and federal frameworks
- Reduces tax ambiguity for virtual asset fund managers
- Enhances Dubai’s competitiveness for digital asset structuring outside traditional financial free zones
Rather than introducing new regulatory powers, the move consolidates policy alignment.
For institutional players evaluating the UAE as a jurisdiction for digital asset wealth management, clarity in regulatory-tax coordination is a decisive factor.
