As always this sort of thing shouldn't be asked as "What's the best...", because it's usually the case that there is no best, many options may be equally viable. For this if you asked multiple professional woodworkers I'd bet each would have their own ideas about how this should be treated for the proposed location and there's no way to be sure if one is head and shoulders above the others without trying it.
This is varnish or what we can loosely refer to here as lacquer, which would include the epoxy as proposed by Stoppal.
Epoxy or the right type of lacquer (e.g. an automotive finish) on paper seem like the perfect solution as they can in theory provide a reliable and durable 100% waterproof coating.
But, and this is a big but, this assumes even and thorough coating — no voids, thin spots or pinprick holes. Best of luck treating something this intricate and avoiding every one of those potential weak points in the recesses! Spraying such a finish on (which is practically the only possible application method) would actually make complete coverage harder, not easier.
There is exposed end grain everywhere on a carving like this and if water can get to it it will suck it up like a sponge. If this does occur it will leading to areas of localised swelling and within short order you could have cracks forming and possibly delamination.
As such I think this is the least good of all the options, despite at first glance appearing to be the best.
Just because this is a decorative piece it doesn't mean it has to be treated any differently to other pieces of exterior woodwork, so wood preservative as you might use on a fence is a perfectly viable option here. Clear/colourless and coloured versions are available.
In addition to commercial wood preservatives homemade options are possible, using for example a borax solution, something which is gaining renewed popularity in recent years as people look for non-toxic alternatives. You make up a concentrated solution and then brush it liberally on the wood, letting it soak in and dry. These retard microbial attack and deter wood-boring insects.
No oil finish is waterproof, let's start by saying that. But what they can do is provide some protection, help preserve the original look of the wood (prevents greying/silvering) while allowing it to take on and lose moisture. Over time the wood tends to age 'gently' or 'sympathetically', unlike what can happen when water eventually gets underneath a varnish and causes patches of ugly discolouration.
In addition to the older, more tradtional pure oils (most commonly linseed oil in the West, tung oil in parts of Asia) modern "oil finishes" for exterior application are a possibility. These generally have waxes and resins added to provide better waterproofing and longevity.
Note that the above refers to raw linseed oil, not boiled linseed oil which is normally what would be recommended. This is one of the few applications where the raw oil is to be preferred. Raw linseed oil is also sold as flaxseed oil although it is commonly more expensive.
Although I hate the name of this finish — it's not made from teak any more than Danish oil is made from Danes :-) — it has a long proven history of protecting wood, even with full exposure to sunlight and the elements.
As odd as it might seem some will advise no finish for this, letting the piece weather naturally. Although this does include the likelihood of cracks forming with no finish on the wood it is free to dry out as fast as possible when it does get slightly damp. Often I would be in favour of this but I don't think it's advisable here without knowing the wood and its characteristics. It might be a species that does not like being wet and will begin to break down faster than you'd like.
It's hard to tell from the one small photo but the piece looks pretty sizeable and might therefore not be carved from a single piece of wood. If it is glued up from smaller pieces there's a further unknown and that is whether the glue is soluble, water-resistant or waterproof.