Virtual Assets Service Providers in Dubai : Regulatory Regime on Advisory Services

The Virtual Assets Regulatory Authority (VARA) of Dubai has laid out a robust, principle-based rulebook for Virtual Asset Advisory Services—applicable to all firms offering consulting, strategy, or technical advisory around virtual assets. As of mid-2025, firms engaging in any form of token-related advisory—whether strategic structuring, tokenomics consulting, whitepaper reviews, or investment due diligence—must be licensed under VARA’s “Advisory Services” VASP category and comply with its bespoke rulebook alongside general compliance frameworks.

What Counts as Advisory Services?

Under VARA’s Advisory Services Rulebook, the following activities fall under licensing scope:

Provision of recommendations or opinions relating to acquisition, holding, transfer, or disposal of Virtual Assets;
Technical, legal, or tokenomic advisory around token launches, whitepaper structuring, DeFi projects, or tokenized products;
Strategic guidance or risk assessments in relation to Virtual Asset platforms or instruments

Licensing Overview

License: ‘Advisory Services’ under the dedicated VARA Advisory Services Rulebook.
Paid-Up Capital: AED 100,000 must be held in a trust with VARA as beneficiary, via surety bonds, or another approved method.
Net Liquid Assets: Must maintain at least 1.2x times of monthly operating expenses.
Key Function Officers: Appoint a Compliance Officer, MLRO, and Technology Lead with verifiable DLT and advisory experience.
Pre-License Tech Audit: A mandatory third-party review of cybersecurity, platform resilience, and code escrow.
Fees & Timeline: AED 40,000 application fee + AED 80,000 annual supervision fee; expect approval within 3–6 months.

Core Regulatory Frameworks (Rulebooks Applied)

In addition to the Advisory Services Rulebook, licensees must comply with:

Company Rulebook (entity structure, key individuals, board governance)
Compliance & Risk Management Rulebook (AML/CFT, conflict of interest, complaints handling)
Technology & Information Rulebook (IT architecture, cybersecurity, outsourcing)
Market Conduct Rulebook (advertising, transparency, client interaction norms)
Advisory Services Rulebook (client suitability, engagement scope, deliverable standards)

Key Ongoing Compliance Obligations for Advisory VASPs

Client Suitability & Risk Disclosures

Documented risk profiling and suitability assessments for each client engagement.
Mandatory disclosure of token risks, project stage, liquidity conditions, and non-licensing caveats.

Staff Qualification & Conduct Controls

All advisory staff must be certified or demonstrably competent in Virtual Asset markets.
Annual performance evaluations and refresher training required; records retained for 8 years.

Public Disclosures & Client Transparency

Publish internal policies on conflicts, data protection, whistleblowing, and custody arrangements.
Clearly communicate fee structure, disclaimers, and scope limits via formal client agreements.

AML/CFT & Governance

Appoint an independent MLRO (Money-Laundering Reporting Officer); conduct enhanced due diligence for all high-risk clients.
Internal audit and regulatory reporting to VARA on quarterly and annual basis.

Marketing & Advisory Restrictions

All marketing material, including whitepapers and website content, must be pre-approved by VARA.
Promotional content must be fair, balanced, risk-disclosed, and non-misleading.
Firms cannot guarantee returns or make unqualified endorsements of virtual assets.

How HLS-Global Can Assist You

At HLS-Global UAE, we are equipped to support ‘Advisory Services’ VASPs at every stage:

Licensing & Strategy

Draft and submit full license application to VARA.
Assist in structuring governance, audits, and regulatory filings.

Compliance Infrastructure

Develop AML/KYC frameworks, client onboarding workflows, and training programs.
Create rulebook-compliant public disclosures, conflict registers, and engagement templates.

Audit & Inspection Preparedness

Mock inspections, compliance gap assessments, and audit coordination.

Post-Licensing Support

Ongoing regulatory monitoring, staff certification tracking, and real-time updates on rule changes.

VARA’s regulatory framework is among the most detailed globally. As Dubai positions itself as a premier digital-asset hub, Advisory Services VASPs must be both comprehensively licensed and proactively compliant. Let us help you unlock this growth opportunity—securely, lawfully, and confidently.

____________________________________________________________________________________

Disclaimer: All views expressed in this article are solely for informational purposes and should not be construed as legal advice. This information is for reference only and is bound to change in case of any amendments or changes to applicable laws. We do not assume any responsibility or liability for any errors or omissions in the content of this article, and do not make any warranties about the completeness, reliability and accuracy of the information expressed in this article.