VARA Advisory Services License: What you Need to Know

In the virtual asset market, the line between general commentary and regulated advisory activity is clearer than many expect. A business becomes subject to the Virtual Assets Regulatory Authority (“VARA”) licensing regime the moment it offers a personalized recommendation that could influence someone’s decision to acquire, hold, or dispose of a virtual asset.

Even if the advice is provided informally, or in exchange for non-monetary benefits such as referrals or project involvement, it is still treated as a regulated service.

This threshold exists because advisory opinions can significantly shape financial behavior. When that influence carries weight, VARA requires the entity to operate under a license that ensures accountability, independence, and client protection.

1. How Do You Know If Your Advice Should Be Licensed?

What counts as Advisory Services under VARA?

Within VARA’s framework, advisory services refer to providing a client with a personalized recommendation relating to virtual assets, whether initiated by the client or by the advisor. This may involve helping clients assess whether a virtual asset should be acquired, held or disposed of, evaluating the risks associated with a particular token, or advising on the structure and feasibility of a token project. Because such advice can drive investment decisions and influence client behavior, VARA ensures that these services are delivered only by entities that meet clear standards of integrity, competency and transparency.

When does general guidance become regulated advice?

The regulatory threshold is crossed the moment an entity gives a recommendation or opinion that could affect a client’s virtual asset decisions, and does so in exchange for any monetary or non-monetary benefit. From that point on, the activity is no longer informal guidance, it becomes regulated advisory work.

2. What Does It Take to Become a VARA-Compliant Advisor?

Accuracy and Verification of Information

Reliable advisory services begin with accuracy. VARA expects advisors to verify all factual information before providing any recommendation. Opinions must be grounded in evidence, and any data shared with clients must come from credible and up-to-date sources. This protects clients from misleading statements, inflated assumptions or outdated market information, all of which could compromise their decision-making.

The Competence Behind the Recommendation

A VARA-regulated advisor must demonstrate genuine capability. Competency goes beyond qualifications; it requires real understanding of virtual asset markets, hands-on experience, awareness of market conduct standards and a functioning grasp of VARA’s regulatory environment. Advisors must continuously maintain their competency to ensure that the advice they deliver reflects both market reality and regulatory expectations.

Understanding the Client’s Profile

A core requirement under VARA’s rules is the principle of client “suitability”. Advisors must understand a client’s financial situation, investment objectives, experience with virtual assets and ability to tolerate losses. Only then can they assess whether a specific recommendation is appropriate. This assessment is not a one-time exercise; it must be kept updated as the client’s circumstances evolve. All client information must also be retained for at least eight years, ensuring that advisory decisions can always be traced back to a clear rationale.

Delivering Independent, Bias-Free Advice

VARA expects advisory services to be delivered without conscious or unconscious bias. Advice must not be influenced by commercial incentives, internal pressures or exclusive relationships with specific token issuers. Independence is a defining characteristic of regulated advisory services, and VASPs are expected to maintain internal systems that safeguard the integrity of their recommendations.

A Clear Advisory Methodology

Good advice requires a clear methodology. VARA expects advisors to consider a broad and diverse range of virtual assets so that recommendations can be tailored to the client’s objectives rather than limited to a narrow selection. This means evaluating different tokens, risk profiles and market conditions in a structured, defensible way. A documented advisory methodology also helps demonstrate professionalism and fairness.

The Internal Framework that Supports It All

Behind every piece of advice must be an effective internal framework. VASPs offering advisory services must maintain written policies that ensure the independence of their advice, the competence of their staff and the effectiveness of their processes. These policies must be reviewed at least annually and updated to reflect changes in market conditions, regulatory requirements or business operations.

3. What Must Advisory VASPs Disclose to the Public?

Transparency is a cornerstone of VARA’s regulatory approach. Advisory VASPs must clearly disclose several matters, including but not limited to conflicts of interest, the way they handle data privacy and complaints, whether they introduce clients to third parties, and any benefits they receive from such arrangements. Clients should always know how their advisor operates, who they are connected to and how potential conflicts are managed. This level of openness builds trust and reduces the risk of misunderstandings.

4. How Are Advisory Services Used in Practice?

Regulated advisory services help clients navigate the complexity of the virtual asset landscape. They support investors with tailored assessments, assist businesses in structuring token projects and guide sophisticated market participants with portfolio development and risk management strategies. In a fast-moving environment, credible and regulated advice provides clarity, control and confidence.

5. How Do You Establish Advisory Services Under VARA?

To offer advisory services legally in Dubai, a business must obtain the appropriate VARA license, meet its capital requirements, and build a compliance architecture that supports accurate, independent and well-documented advice. This includes implementing governance systems, training advisory staff, maintaining detailed records and meeting all transparency requirements. Once licensed, a VASP can operate sustainably while giving clients the assurance that their recommendations come from a regulated, accountable advisor.

To operate as an Advisory VASP, firms must hold a minimum paid-up capital of AED 100,000. Additionally, the application fee for the advisory services License under VARA is AED 40,000, with an annual supervision fee of AED 80,000.

Once licensed, a VASP can operate sustainably while giving clients the confidence that they are receiving guidance from a regulated and accountable advisor.

How Rasma Legal Can Support You

Rasma Legal helps businesses navigate every stage of the VARA licensing and compliance journey. Our team has successfully worked with VARA across multiple licensing categories and understands the practical and regulatory requirements for operating in Dubai’s fast-evolving digital or crypto asset market. Whether you are applying for a VARA license or strengthening your ongoing compliance, we provide the strategic guidance and hands-on support you need to build a secure, compliant, and scalable VA business.