VARA Investment and Management Services: What you Need to Know

The Dubai Virtual Assets Regulatory Authority (“VARA”) serves as the dedicated regulator overseeing Virtual Asset Service Providers (“VASPs”) across Dubai. Its mandate is to create a secure, transparent, and sustainable environment for virtual asset activities, ensuring that innovation is balanced with investor protection and financial stability.

Among VARA’s regulated activities, Management & Investment Services are among the most sensitive because they place a VASP in direct control of a client’s virtual assets. This activity goes beyond advice as it involves actual decision-making, administration, or management on behalf of the client, often with fiduciary responsibilities.

When Does a VASP Need the Management & Investment Services License?

A VASP must obtain the Management & Investment Services License when it acts on behalf of a client, as an agent, fiduciary, or in any capacity, to manage, administer, or make decisions regarding that client’s Virtual Assets.

This includes activities such as managing investment strategies, allocating client assets, and taking responsibility for staking Virtual Assets to earn protocol rewards.

If a VASP is making decisions for the client, rather than advising the client, this license is required.

What Does VARA Expect from VASPs?

Understanding Client Suitability and Investment Profiles

Because this activity involves discretionary decision-making, VARA requires VASPs to demonstrate that every action taken is aligned with the client’s financial situation, risk tolerance, and investment objectives.

Before taking control of a client’s assets, the VASP must thoroughly assess the client’s understanding of virtual assets, verify all information provided, and ensure ongoing accuracy by reviewing and updating records regularly.

Client data and suitability assessments must be retained for at least eight years, with clear documentation showing why each mandate or decision is appropriate.

This ensures that Virtual Asset management is never treated as a one-size-fits-all service, but as a tailored mandate built on informed consent and responsible oversight.

Competence and Expertise of the Management Team

Management & Investment Services can only be delivered by individuals who possess genuine technical and regulatory competence. VARA expects VASPs to appoint staff and senior personnel with the qualifications, experience, and practical understanding necessary to manage client assets responsibly.

This includes expertise in virtual asset markets, knowledge of risk management processes, fluency with staking technologies when relevant, and a strong grasp of VARA’s regulatory ecosystem. Training must be ongoing, ensuring that competence is continuously maintained.

Client Consent, Transparency, and Ongoing Reporting

Because the VASP is taking direct responsibility for the client’s assets, VARA places heavy emphasis on informed, explicit consent.

Clients must clearly understand:

VASP must provide monthly account statements, including all transactions, updated balances, and asset valuations based on a documented and consistently applied valuation methodology. Every aspect of the relationship must be transparent and properly communicated.

Managing Virtual Assets with Integrity and Professionalism

VARA requires VASPs to manage client assets with the highest standards of care. This means acting in the client’s best interests at all times, taking into account factors such as asset pricing, execution quality, market liquidity, cost efficiency, custody risks, settlement likelihood, and any specific client instructions.

Risk management processes must be effective, independently reviewed, and capable of identifying liquidity threats, market disruptions, and operational vulnerabilities. VARA may request these assessments or audits at any time, and the VASP must be prepared to demonstrate that all decisions were made responsibly and in alignment with both client interests and regulatory obligations.

Marketing and Communications: No Misleading Claims

VARA takes particular care with marketing in this category. VASPs may not claim, imply, or suggest that clients will receive staking rewards or similar benefits unless such rewards come directly from actual protocol-level staking. Marketing material must never include misleading statements, exaggerated claims, or unverified projections.

All factual information presented to clients must be verified, accurate, up to date, and supported by reliable sources.

What about the capital requirements?

VASPs providing custody services, the entity must maintain a minimum of AED 280,000 (approximately USD 76,300) or 15% of its fixed annual overheads. This threshold ensures the VASP has sufficient financial resources to operate securely, cover operational costs, and meet obligations to clients. VARA requires all VASPs to maintain their paid-up capital in secure, regulator-approved forms. At all times, the capital must be held in one of the following ways: Capital must be maintained in a VARA-approved form such as a UAE bank trust account, a surety bond, or another arrangement approved by the regulator.

What about the fees?

VASPs must pay a license application fee of AED 100,000 and an annual supervision fee of AED 200,000 payable in advance for this licensed activity.

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.