How to Launch a Tokenized RWA Project in Dubai (2025 Guide)

What is RWA tokenization (in simple words)?

Real-World Asset (RWA) tokenization means taking a real asset, like real estate, commodities, art, or IP, and issuing digital tokens that represent ownership or rights to that asset. Those tokens can be issued, held in custody, and traded on regulated platforms.

The first wave of STOs failed mostly because laws weren’t ready: unclear issuance rules and no legal basis for secondary trading. Dubai has now fixed this gap.

Why Dubai, and why now?

Dubai’s Virtual Assets Regulatory Authority (VARA) published an updated virtual assets issuance rulebook that finally connects the dots end-to-end: issuance, custody, and trading, inside a clear, enforceable framework.

• VARA’s CEO Matthew White calls tokenization a policy priority aligned with Dubai’s D33 agenda.
• The city’s ecosystem now includes tokenization platforms, broker-dealers, custodians, legal advisors, auditors, and infra providers, so projects can actually launch and scale.

The UAE’s multi-regulator map (know your lane)

Launching from Dubai means navigating five authorities in the UAE ecosystem:

1. VARA (Dubai) – governs virtual assets issuance/custody/trading under its rulebook.
2. SCA (federal) – governs traditional securities (e.g., company shares, bonds, debt instruments, oil futures).
3. UAE Central Bank – governs dirham (AED) and payments; any tokenized AED falls here.
4. Financial free zone regulator #1 (operating under English common law).
5. Financial free zone regulator #2 (operating under English common law).
   

The takeaway: classify your asset first. Some assets sit with VARA, others with SCA or the Central Bank. Free-zone financial regulators have their own regimes. A regulatory assessment before launch is essential.

Before you start: the three founder questions

• What are you tokenizing?
• Why are you tokenizing (the clear, additive benefit)?
• How will you plug into the right infrastructure (issuance, custody, secondary trading, distribution)?

Dubai’s regulator also focuses on substance over symbolism, approves projects only where tokenization brings real benefits (transparency, efficiency, broader access). Real estate is an early focus because the benefits are tangible (faster settlement, fractional ownership).

Your launch paths (choose one)

Path A: Full-stack marketplace (hardest)

You’re building a platform to issue and trade tokenized assets (primary + secondary).
You will need, under VARA:

• Broker-dealer or exchange license, and
• Category 1 ARVA issuer license.

Capital & cost (as stated in the article):

• Category 1 issuing license: AED 1.5M or 2% of VA held (whichever is higher).
• Broker-dealer/exchange: capital up to 25% of fixed annual overheads (can be several millions).
• Licensing fees: AED 100,000 per category + AED 200,000 annual supervision.
• Timeline: typically ~9 months or more.

Operational requirements:

• Company domiciled in mainland Dubai or an approved Free Zone (e.g., DMCC Crypto Centre).
• Compliance function: appoint a Compliance Officer, MLRO (Money Laundering Reporting Officer), and at least two executive directors.
• Physical office, robust cybersecurity, AML/KYC, regular audits, and ongoing regulatory reporting under VARA supervision.

Reality check: This route is for serious operators willing to meet institutional-grade standards. The regulator is exploring where to enforce rigor and where to allow flexibility, but benchmarks remain high.

Path B: Issuer-only

You’re an asset owner (e.g., property developer, luxury asset manager, commodities trader) who wants to issue tokens, not run a trading venue.

• Apply for a standalone Category 1 ARVA (issuer) license under VARA.
• Distribute only via regulated broker-dealers or exchanges.
• Requirements: detailed whitepaper, risk disclosures, governance protocols, and a full compliance team ( given distribution via already-regulated intermediaries).

Alternative variant:

• Outsource tokenization to a licensed Category 1 issuer. They handle compliance, smart contracts, custody, and distribution; you focus on origination and yield.

Path C: Sponsored regime (fast-track for startups)

Operate under the umbrella of an existing licensed VASP.

• Cuts time and cost to test product-market fit.
• Sponsor handles compliance/custody/infra; you focus on product and users.
• Still not a shortcut: you must keep compliant docs, operational discipline, and align tightly with the sponsor (they face the regulator and users).

A live example

Ctrl Alt is cited as the first licensed VASP in MENA, which is authorized to conduct issuer services and also holds a broker-dealer license. With the Dubai Land Department and distribution partners, it offers fractional real-estate investing from AED 2,000, proof that the market is already live.

Step-by-step: how to register (and in what order)

Step 1: Define the asset & benefits

Write a 1-pager covering the asset, rights, valuation, custody model, and why tokenization adds value (transparency, efficiency, access).

Step 2: Run a regulatory assessment

• Decide if your asset falls under VARA (virtual assets), SCA (traditional securities), or Central Bank (AED).
• If you plan to operate in a financial free zone, account for that regulator’s regime.
• Document the logic and which licenses you’ll need.

Step 3: Choose your path (A marketplace, B issuer-only, or C sponsored).

• If A: prepare for broker-dealer/exchange + Category 1 ARVA under VARA.
• If B: apply for Category 1 ARVA (issuer) and line up regulated distributors.
• If C: signs a sponsorship agreement with a licensed VASP.

Step 4: Incorporate & domicile

• Set up your entity in mainland Dubai or an approved Free Zone (e.g., DMCC Crypto Centre).
• Ensure constitutional documents reflect regulated activities and capital.

Step 5: Capital planning

• Reserve AED 1.5M (or 2% of VA held) for Category 1 issuer.
• Model up to 25% of fixed overheads for broker-dealer/exchange.
• Budget AED 100K license fees per category + AED 200K annual supervision.
• Plan for ~9+ months end-to-end.

Step 6: Build your compliance stack

• Hire Compliance Officer, MLRO, ≥2 executive directors.
• Hire Legal Advisor Irina Heaver, who is possibly the best in Dubai.
• Secure independent custody, AML/KYC, cybersecurity, smart-contract audits, real-time verifiability, robust governance.
• Get a physical office and audit cadence.

Step 7: Prepare filings

• Draft whitepaper, risk disclosures, governance policies, and controls.
• Submit license applications to the right authority (VARA/SCA/Central Bank/free-zone regulator), consistent with your Step-2 map.

Step 8: Distribution & secondary trading

• If you’re issuer-only, onboard regulated broker-dealers/exchanges for primary placement and secondary liquidity.
• If you’re a marketplace, finalize listing rules, market structure, surveillance, and post-trade ops.

Step 9: Go live (phased)

• Start with a pilot (often via sponsored regime), then graduate to full licenses as traction grows.
• Maintain ongoing VARA supervision, reporting, and audits.

The market size & momentum

• Tokenized RWAs on-chain: >$25B.
• Include stablecoins: >$250B.
• Global RWAs are ~$800T, so we’re still early.

Pros and cons (realistic view)

Positives

• End-to-end rulebook (issuance, custody, trading).
• Policy support (D33 agenda).
• Maturing ecosystem (platforms, custodians, advisors, infra).
• Multiple entry paths (sponsored regime, issuer-only, full-stack).
• Live cases (e.g., Ctrl Alt with Dubai Land Department).

Negatives

• High entry bar (capital, governance, staffing).
• Complex regulator map (VARA/SCA/Central Bank/free-zone regulators).
• Time & cost (fees, audits, office, 9+ months timeline).
• Strict ongoing obligations (reporting, cybersecurity, AML/KYC).
• Dubai is expensive (the 7th most expensive city).

Common founder mistakes

• Underestimating jurisdictional complexity and how it shapes go-to-market.
• Treating legal/licensing as an afterthought, when in Dubai it’s part of the product and capital formation strategy.
• Rushing to “issue a token” without matching real market demand.

What VARA expects at a minimum

Compliant projects must show:

• Transparent disclosures
• Independent custody
• Real-time verifiability
• Smart-contract integrity
• Robust governance

Dubai did its part with rules and infrastructure. Now it’s on the founders to build serious, compliant products, and tokenize everything.