Varela was born and grew up in Södermalm on the south side of Stockholm. Both of his parents are from Galicia and he did not learn Swedish until he started school. During middle school, he became friends with Gustaf Skarsgård, son of actor Stellan Skarsgård. Varela did not then know of the famous Skarsgård family because he mostly watched Spanish satellite television. When his friend Skarsgård applied to a selective upper secondary school, Södra Latin's drama program near where both boys lived, Varela wanted to do the same. The elder Skarsgård gave the young Varela a few hours of acting instructions and he was accepted by the school. Varela said he was surprised, because he had shown up in a track suit and looked more like a chav than an aspiring actor.
After a brief appearance in the soap opera Nya tider, he left Sweden for a while and on returning worked as a construction worker with small acting jobs for a sideline. After reading the bestselling Swedish crime novel Snabba Cash and hearing that a film production company Tre Vänner was adapting the book for the big screen he set his sights on starring as the Swedish-Chilean drug dealer Jorge Salinas. Varela convinced the director Daniel Espinosa to give him a screen test. Espinosa, who himself is of Chilean descent, had stated he wanted someone with roots in Chile, and Varela would eventually land the role.
Easy Money was a success and Varela went on to star in both sequels: Easy Money II: Hard to Kill (2012) and Easy Money III: Life Deluxe (2013). He also got the part of Police Detective Jorge Chavez in the big budget TV series Arne Dahl. In series 2 Alexander Salzberger replaced him.

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