Log in to the back end of your Joomla! site, and then go to the VirtueMart control panel:
components>virtuemart>list payment methods
Select the "PayPal" method and then ensure that check box next to "active" is checked.
Next, under the "configuration" tab, enter your paypal payment e-mail in the appropriate field.
Also, note that this is the same area where you can turn off the PayPal test mode (otherwise known as a sandbox).