MLRO, CO, and CRO Requirements: Complete Interim Regulatory Team for Dubai

Here's something most Dubai business owners discover too late: you can't just hire "a compliance person" anymore.

The regulatory landscape changed. Whether you're launching under VARA, setting up in DIFC, or operating in a free zone, you need three distinct roles. Not one. Not two. Three.

And finding these people takes six to twelve months. If you're lucky.

The Three Roles Dubai Regulators Actually Require

Most people think compliance is just... compliance. One person handling "regulatory stuff." But modern financial regulation doesn't work that way in Dubai.

The Compliance Officer (CO)

The CO owns your entire compliance framework. They build the systems. Write the policies. Train your staff. Make sure every business process aligns with DFSA or VARA rulebooks.

Under DFSA's September 2025 rules, the CO became a "Designated Function" – meaning firms are now responsible for ensuring they're fit and proper. For VARA-regulated VASPs, the CO must be appointed before licensing and oversee your entire compliance management system from day one.

The Money Laundering Reporting Officer (MLRO)

The MLRO prevents your company from being used for financial crime. They monitor transactions, investigate suspicious activity, and file reports with the Financial Intelligence Unit.

This isn't a part-time add-on to someone's existing role. VARA requires MLROs to have a minimum of two years of AML/CFT experience. The DFSA still requires MLROs to be approved as Licensed Functions.

Why the scrutiny? Because getting AML wrong destroys businesses. One major breach and you're looking at license suspension, heavy fines, or permanent closure.

The MLRO must be a UAE resident once licensed and needs technical knowledge of your specific sector – blockchain and crypto patterns for VASPs, correspondent banking risks for payment companies.

The Chief Risk Officer (CRO)

VARA calls this the Head of Risk Function. This role identifies, assesses, and manages every type of risk: market, operational, technology, and regulatory.

The CRO builds your risk appetite framework and reports to senior management and the board with independent oversight. For VASPs under VARA, this role is mandatory at the licensing stage.

Why You Need All Three

I know what you're thinking: "Can't one person do all this?"

Technically, sometimes. VARA allows a single qualified person to hold multiple roles if there's no conflict of interest. But these are full-time jobs.

A proper CO spends 40+ hours per week building policies, conducting training, preparing regulatory reports, and managing compliance technology. An MLRO spends another 40+ hours monitoring transactions, investigating alerts, and maintaining AML systems. The CRO coordinates across all business functions, updating risk registers and reporting to the board.

Plus, regulators specifically want these roles separated. The DFSA explicitly prohibits the Senior Executive Officer from holding the CO or Finance Officer role.

You need three distinct functions with clear separation of duties. Similar to how successful businesses need different types of executive leadership, regulatory roles require specialisation.

The Recruitment Reality Nobody Talks About

Finding qualified regulatory professionals in Dubai takes six to twelve months. Minimum.

Why? Because you need people who combine technical regulatory knowledge (DFSA or VARA rulebooks), sector-specific expertise, UAE regulatory experience, relevant certifications (CAMS, ACAMS), and strong references from regulated firms.

They need to be UAE residents or willing to relocate. Available to start within your licensing timeline. And the talent pool is tiny.

Meanwhile, you're stuck. Can't get licensed without these appointments. Can't operate without a license. Can't generate revenue while waiting.

This is the regulatory catch-22 facing Dubai's financial services sector.

The Interim Solution

Smart companies figured something out: you don't need permanent employees for these roles initially. You need the functions, the expertise, and accountability to regulators. But not necessarily on payroll from day one.

Interim regulatory appointments solve this perfectly. Instead of waiting 6-12 months for recruiting, you bring in experienced professionals who already know the rulebooks, have regulator relationships, and can start within weeks.

They cost 40-60% less than permanent hires. Get you licensed. Build your compliance infrastructure. Train your team. Then transition to permanent staff when you're ready.

We've seen payment companies get licensed in 90 days this way. VASPs complete VARA applications while still searching for permanent staff. Fintech startups avoid burning runway before proving product-market fit.

Interim doesn't mean inferior. You're getting professionals who specialise in regulatory setup and have done this dozens of times. The comparison between fractional executives and traditional consultants shows why this model works better.

A Real Example

A Dubai payment company needed all three regulatory roles for their VARA application. Recruiting permanent staff would take 8-10 months. They didn't have that time.

Instead, they engaged interim professionals:

MLRO with 8 years in payment sector AML
CO who'd set up frameworks for 12 VASPs
Risk specialist with Big 4 background

Timeline: All three started within 3 weeks.

They immediately drafted all 25 compliance documents, built the AML monitoring system, created the risk framework, and prepared the license application.

Result: VARA license approved in 11 weeks.

The interim team stayed for 6 months, managing regulatory reporting while the company recruited permanent staff. When the permanent MLRO joined, the interim MLRO trained them for a month before transitioning.

Total savings: 60% versus hiring permanent staff immediately. Time to market: 8 months faster.

When You Actually Need These Roles

You definitely need them if you're:

Applying for VARA license (mandatory for all VASPs)
Operating in DIFC under DFSA supervision
Running payment services or managing client assets
Providing investment services

You probably don't need them immediately if you're a pure technology provider with no regulated activities or an early-stage startup not yet touching regulated services.

But the moment you touch regulated activities, you'll need them immediately. And "immediately" means either having interim professionals ready to engage, or accepting 6-12 month delays.

What Happens When Companies Get This Wrong

August 2025: VARA issued public fines against a licensed VASP for serious governance and AML breaches. Weaknesses in their AML program, non-disclosure of material facts, and conducting unlicensed activities.

The root cause? Inadequate compliance functions. Their CO, MLRO, and risk functions all failed simultaneously.

Result: Heavy fines. Appointment of a "Skilled Person" to oversee remediation. Ongoing enhanced supervision. Massive reputational damage.

And it's getting worse. The UAE's National Risk Assessment identified virtual assets as high risk. FATF/MENAFATF mutual evaluation is scheduled for June 2026. Enforcement is intensifying.

Companies without proper regulatory governance will face severe consequences.

Why SMEs Can't Ignore This

If you're running a smaller financial services business, you might think this only applies to big players.

Wrong.

Regulators don't care about your size. They care about your activities. A small VASP faces identical MLRO requirements as a large exchange.

This creates a problem for SMEs: you can't afford three full-time regulatory professionals, but you can't operate without them.

Fractional executive services solve this perfectly. You get executive-level expertise without executive-level costs. A fintech startup with 15 employees doesn't need a full-time CRO. They need 1-2 days per week of senior risk expertise.

That's exactly what fractional arrangements provide. Whether you need financial leadership, operational expertise, or technology guidance, the same model works for regulatory functions.

The Bottom Line

Building a regulatory team in Dubai isn't optional. It's a prerequisite for operating in financial services.

You have two choices:

Spend 6-12 months recruiting permanent staff before you can even apply for a license
Engage interim regulatory professionals who start immediately and transition to permanent hires when ready

Smart companies choose option two. They get licensed faster, operate compliantly from day one, and recruit permanent staff without desperation.

The regulatory landscape isn't getting simpler. Requirements are increasing. Scrutiny is intensifying after VARA's August 2025 enforcement actions and the DFSA's CP165 changes.

Companies that succeed treat compliance as strategic advantage, not burden. That starts with getting the right people in the right roles.

Whether permanently or temporarily. Whether on payroll or on contract. What matters is having qualified professionals managing your regulatory obligations while you focus on building your business.

Not sure which regulatory roles you actually need for your business model? Take our executive needs assessment to identify gaps in your current structure.

Ready to build your regulatory team without the 6-month wait? The Fractional Dubai team includes experienced compliance professionals who've helped dozens of financial services companies navigate DFSA and VARA requirements. We can have your CO, MLRO, and risk functions operational within weeks. Contact us to discuss your regulatory staffing needs.