If a firm wants to recommend which tokens a family office should allocate to, outline staking yields for a hedge fund, or advise a token-issuer on tokenomics and sale structure (in a way that is client-specific), that firm may require a VARA Advisory Services license. Ignoring the rule is not an option: unlicensed advisory activity can trigger administrative penalties, reputational damage, and potential legal exposure under Dubai’s virtual assets framework.

In this article, we take a look at the Advisory Services license offered by VARA, including what counts as “advice”, what is exempt, capital and insurance expectations, and the typical licensing process and compliance considerations.

What is a VARA advisory services license?

A VARA Advisory Services license authorises an entity to provide client-facing, tailored recommendations or opinions on virtual assets. This is not limited to “buy/sell calls”. In practice, it captures advisory work that can influence a client’s decision to acquire, hold, dispose of, or otherwise engage with a virtual asset (including yield strategies, token portfolio construction, and issuer advisory that is not purely technical).

VARA’s approach mirrors traditional investment adviser regulation: advice moves markets, and poorly governed advisory practices can fuel misinformation, conflicts of interest, and market abuse- especially in an asset class defined by volatility, fast narratives, and retail-driven sentiment.

What is VARA?

The Virtual Assets Regulatory Authority (VARA), established in early 2022, represents a pioneering initiative by the Dubai government to regulate the fast-growing sector of virtual assets.

VARA is the first regulatory body of its kind dedicated to ensuring the secure and effective functioning of Virtual Asset Service Providers (VASPs) in Dubai. This initiative positions Dubai and the UAE as a prominent centre for digital finance and innovation.

What are VARA’s objectives?

VARA’s primary objectives include promoting Dubai as a regional and international centre for virtual assets, enhancing the competitive edge of the Emirate in this domain, and fostering a robust digital economy.

The authority is tasked with developing regulations that protect investors while curbing illegal practices associated with virtual assets, including requirements around governance, disclosure, market conduct, and operational resilience.

The Virtual Assets Regulatory Authority is the single regulatory body in Dubai that offers licensing options in the virtual assets space. Here are the key benefits:

(i.)Regulatory Compliance and Legitimacy

1. Legal Authorisation: A VARA license provides legal authorization to operate within Dubai, ensuring that businesses comply with local laws and regulations governing virtual assets.
2. Investor Trust: Being licensed by VARA enhances credibility and trust among investors and clients, as it signifies adherence to established regulatory standards.

(ii.)Access to a Thriving Market

1. Strategic Location: Dubai's position as a global hub for blockchain and cryptocurrency innovation allows licensed firms to access a vibrant market with numerous opportunities for growth.
2. Supportive Ecosystem: VARA fosters a supportive regulatory environment that encourages innovation, providing firms with the necessary framework to develop and expand their services.

(iii.)Comprehensive Framework

1. Diverse Licensing Categories: VARA offers various licensing categories tailored to different types of virtual asset services, including advisory, exchange, custodial, and payment services. This flexibility allows businesses to choose a license that best fits their operational model.
2. Ongoing Support: VARA provides continuous guidance and support throughout the licensing process and beyond, helping firms navigate compliance requirements effectively.

(iv.)Enhanced Operational Standards

       a.  High Compliance Standards:

License applicants are required to implement a robust compliance and anti-money laundering framework. They also have to put in place elaborate cybersecurity policies to address risks associated with virtual asset businesses.

This commitment not only protects consumers but also helps firms mitigate risks associated with virtual asset operations.

(v.)Training and Development: Licensed entities must engage in ongoing training for staff to stay updated on regulatory changes, ensuring that they maintain high operational standards at all times.

Firms that are licensed by VARA have to put in place detailed training and development plans for their employees and senior management, thus ensuring commitment to robust operational standards and keeping pace with the fast-developing field of virtual assets.

What activities fall under the VARA advisory services license?

Covered advisory activities 

An entity generally needs an advisory services license where it provides, for monetary or non-monetary benefit, recommendations or opinions that can influence a client’s decision on dealing in, holding, or disposing of a virtual asset.

Common scenarios include:

1. Token research and allocation advice (e.g., recommending a basket of tokens, sector allocations, or entry/exit rationale).

2. Yield strategy advice, including staking strategies, validator/masternode participation, or structured yield approaches (where positioned as a client recommendation rather than general education).

3. Issuer advisory tied to strategy, such as advising an ICO/token generation event team on tokenomics and sale structure where the work goes beyond drafting and becomes a recommendation on how to raise, distribute, or position the token.

4. Bespoke research reports prepared for wealth managers or private banking arms where the report is tailored to the specific client’s profile or mandate.

5. Virtual asset M&A / treasury diversification consulting, where the output is framed as a recommendation on acquiring, holding, disposing of, or deploying treasury into virtual assets.

What activities are exempt?

VARA typically recognises exemptions where the activity does not cross the line into personalised recommendations or trading guidance.

1) Public media analysis

Examples include newspaper articles, general TV commentary, or unsponsored podcasts that remain general, non-personalised, and non-actionable. A YouTube host discussing Bitcoin’s halving impact for a general audience is typically not the same as advising a particular client what to buy or when to sell.

2) Technical developer advice

Examples include code optimisation, bug fixes, smart contract auditing, and technical build support, as long as the firm does not provide token trading recommendations or structure sales as a financial recommendation.

Important: once commentary or technical work morphs into client-tailored allocation strategy or transaction-facing advisory, the exemption disappears and licensing risk increases.

I want to operate a virtual asset business. Do I need a VARA license?

Yes. You will need to obtain a license from VARA, before you conduct any virtual asset business within the emirate of Dubai.

There are two stages in the licensing process. Step 1 is submission of an intial application, followed by a detailed review and in-principal approval.

VASPs are also required to be physically present in Dubai, in the form of leasing or purchasing an office.

The authority has also outlined specific requirements regarding capital adequacy, operational transparency, and compliance with anti-money laundering protocols.

What staffing and “fit and proper” expectations apply?

VARA expects advisory services firms to operate with an identifiable, accountable professional layer.

Advisory staff (including senior management and key advisory personnel) are typically expected to satisfy:

1. Integrity checks (fitness, propriety, conflicts, past conduct);
   
   
2. Competence checks (skills and capability to deliver advisory services responsibly);
   
   
3. Financial soundness checks; and
   
   
4. For analysts, formal education and relevant experience in crypto and/or financial markets (especially where the firm produces research or recommendations relied upon by clients).

Do I need a VARA license if I advise on crypto?

If you are providing tailored recommendations on virtual assets in Dubai, including allocations, staking/yield strategies, or client-specific token strategy, then yes, you should assume licensing is required unless you can clearly sit within a defined exemption.

If you only provide:

• general educational commentary, or
  
  
• purely technical build support with no investment angle,
  
  

you may fall outside scope, but the line is thin, and firms often accidentally cross it through marketing, deliverables, or “strategy” language.

What is the process to set up a VARA license in Dubai?

Fees and capital requirements

1) VARA regulatory fees (official schedule)

Under VARA’s Schedule 2- Supervision and Authorisation Fees, the Advisory Services activity attracts the following regulator fees:

• Licence application fee: AED 40,000 (one-time; payable on submission)
  
  
• Licence extension fee: 50% of the lower Licence Application Fee(s) (payable for each additional regulated VA activity added under the same application)
  
  
• Annual supervision fee: AED 80,000 (payable per year, per activity)
  
  

VARA notes that applications are not processed until applicable application/extension fees are received, and it retains discretion to impose additional supervision fees depending on a VASP’s risk profile.

2) Paid-up capital (minimum capitalisation)

VARA’s Company Rulebook prescribes a minimum paid-up capital requirement for Advisory Services of:

• AED 100,000 (to be held and maintained at all times).
  
  

If the entity is licensed for more than one VA activity, VARA requires the VASP to hold the paid-up capital amount specified for each VA activity for which it is licensed (i.e., activity-by-activity capitalisation).

Form / where capital is held: Paid-up capital must be maintained in one of the prescribed forms, including:

• a trust account with a UAE-licensed bank with VARA as beneficiary;
  
  
• a surety bond (no end date) with VARA as beneficiary; or
  
  
• another method specified by VARA as a licence condition.
  
  

3) Expense-based liquidity buffer (net liquid assets)

In addition to paid-up capital, VARA requires VASPs to maintain Net Liquid Assets such that:

• Net Liquid Assets ≥ 1.2 × monthly operating expenses, maintained at all times.
  
  

Key practical points under the rulebook:

• NLA must be reconciled daily and reported to VARA monthly.
  
  
• NLA may only be maintained in permitted liquid assets, including cash/cash equivalents and (where approved by VARA) USD/AED-referenced virtual assets. 

In addition, firms are expected to maintain appropriate insurance coverage, including: Professional indemnity insurance (to cover advisory risk, errors, omissions, and client claims); and cyber insurance (to address technology, data, and cyber-risk exposure).

Ongoing compliance expectations

A well-run advisory practice is expected to implement controls around:

1. Suitability and client classification (who the advice is for, and on what basis recommendations are made).
   
   
2. Conflicts of interest management (e.g., token holdings, issuer relationships, referral fees, paid promotions).
   
   
3. Research governance (methodology, documentation standards, recordkeeping, and controls against misleading claims).
   
   
4. Disclosure discipline (how risks, assumptions, and performance are presented).
   
   
5. Market conduct and market abuse controls (including avoiding behaviours that could facilitate manipulation).
   
   
6. Technology and cyber governance (especially where client data, analytics systems, or trading integrations exist).
   
   

FAQ

1. Does “advice” under VARA only mean explicit buy/sell recommendations?

No. VARA’s Advisory Services framework captures client-facing advice that is “suitable” and in the client’s best interests, and it expects you to assess client knowledge/experience, objectives, and financial circumstances before giving advice. That goes beyond simple “buy/sell calls” and includes personalised recommendations that influence how a client engages with virtual assets.

2. What if we call it “research” or “market insights” instead of “advice”?

Labeling doesn’t decide the perimeter, substance does. If the output is effectively a personal recommendation or tailored guidance (or is used by clients as such), VARA will expect suitability, governance, and controls consistent with an advisory permission.

3. Are model portfolios, “token baskets,” or allocation frameworks considered advisory?

If delivered as a client-specific recommendation (or adjusted for a client’s profile/mandate), it will generally be treated as advisory activity and must meet suitability and documentation standards.

4. Do “signals groups,” paid Telegram/Discord channels, or subscription newsletters trigger licensing?

They can. If the content is general and non-personalised, the licensing risk is lower. But once you provide client-specific direction, respond to individuals with “you should do X,” or tailor guidance based on a user’s circumstances, you start looking like an advisory service provider under VARA’s approach (and you also need to comply with marketing rules when promoting VA-related activity in Dubai).

5. If we only advise institutions/family offices—not retail—does VARA still apply?

Yes. VARA’s licensing is based on carrying out VA activities in or from Dubai, not just on whether your clients are retail. VARA may, however, restrict certain VASPs to Qualified Investors/institutional clients at its discretion.

6. Can a foreign (non-UAE) advisory firm advise Dubai clients without a VARA licence?

If the firm is carrying on VA advisory activity in or from Dubai, it should assume VARA’s perimeter applies. Separately, marketing and promotions rules apply broadly in Dubai (including to foreign entities) and can create compliance exposure even where the firm is not licensed.

7. Does VARA apply in the DIFC?

VARA’s jurisdiction covers Dubai excluding the DIFC. DIFC is regulated separately (by the DFSA). Your structuring and client-facing activity must reflect which jurisdiction you are operating “in or from.”

8. Do we need a VARA licence to advise on token launches, tokenomics, or fundraising structure?

If your work crosses from “technical/structuring support” into recommendations on how to raise, distribute, position, or sell a token (especially with investor-facing implications), that can fall within advisory perimeter and/or overlap with other VARA activity categories depending on the model. Treat it as perimeter-sensitive and design the engagement scope carefully.

9. What are the key suitability obligations for VARA advisory firms?

VARA requires advisory firms to implement procedures to ensure clients understand VA risks and are financially able to bear obligations and losses. The firm must assess at least:

• knowledge/experience,
  
  
• investment objectives (risk tolerance, time horizon, venues), and
  
  
• financial circumstances (loss-bearing ability, proportion of net worth in VAs).
  It must also explain why advice is appropriate for that client and retain suitability information for at least 8 years. 

10. Are we required to maintain evidence and records of advice?

Yes. VARA requires collection and maintenance of the client information used for suitability assessments, with a minimum 8-year retention period for that information. In practice, firms should keep defensible records of recommendations, assumptions, and disclosures.

11. What conflicts are most likely to cause VARA issues for advisory firms?

Common problem areas include token holdings by staff, issuer relationships, paid promotions, referral fees, revenue-sharing arrangements, and advising on tokens where the firm (or its group) has an economic interest. VARA’s general conflicts expectations require firms to avoid conflicts where possible and disclose/manage remaining conflicts fairly.

12. Are “guaranteed returns,” “promised yields,” or “forecast marketing” allowed?

VARA expects advisory firms not to provide advice containing statements/forecasts they know (or should reasonably know) are misleading, false, or deceptive; and it requires verification of factual information against appropriate, reliable sources. Marketing rules also apply to VA promotions and can increase exposure where content is misleading.

13. Can we outsource research, analytics, or parts of the advisory process?

Outsourcing is possible, but the licensed entity remains responsible for compliance. Practically, VARA will expect governance over third parties, auditability of inputs/outputs, and continued ability to meet suitability, disclosure, and recordkeeping requirements. The Advisory Services Rulebook also expects disclosures about third parties holding client funds/virtual assets (where applicable).

14. Do we need UAE-resident “Responsible Individuals” (RIs)?

VARA’s FAQ states that VASPs must appoint two Responsible Individuals who are full-time employees and UAE residents (or UAE passport holders), and who must be fit and proper and approved by VARA.

15. How often is a VARA licence renewed?

VARA licences are annual, renewed for 12 months, with renewal notifications typically issued around 90 days in advance, and annual supervision fees payable at renewal.

16. Do we need a VARA licence if we only provide education or general commentary?

General, non-personalised educational content may sit outside “advisory” (depending on how it’s delivered and whether it becomes a personal recommendation). However, firms often accidentally cross the line through DMs, “portfolio reviews,” customised follow-ups, or paid consultations; so your content, disclaimers, engagement scope, and delivery channels must be designed carefully.

How can 10 Leaves help you?

10 Leaves is a Corporate Service Provider at VARA.

We provide turnkey services for VARA Licenses, from initial consultations, to assistance in authorisations, to preparation of the legal documentation, helping you navigate VARA’s Rulebooks and submit an application that is comprehensive, complete and compliant.

Our services include assistance in:

1. Reviewing the business model and advising on the applicable regulatory framework and licensing perimeter;

2. Preparing the Regulatory Business Plan and submission narrative, including advisory operating model and governance approach;

3. Preparing the policy suite required for an advisory practice (conflicts, suitability, disclosures, recordkeeping, complaints, cyber and risk);

4. Supporting controlled functions and staffing readiness (including fit-and-proper support for key persons);

5. Finalising the legal structure, including holding company setup and customisation of Memorandums; and

6. Supporting office setup and regulatory coordination through the IDQ stage and the detailed phase through to approvals.