UAE’s Ras Al Khaimah to Launch Free Zone for Digital Asset Companies
The Emirate of Ras Al Khaimah in the UAE is set to launch a free zone for digital and virtual asset companies.
The RAK Digital Assets Oasis (RAK DAO) will be a “purpose-built, innovation-enabling free zone for non-regulated activities in the virtual assets sector.”
The free zone will be dedicated to digital and virtual assets service providers in emerging technologies, such as the metaverse, blockchain, utility tokens, virtual asset wallets, non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), decentralized applications (DApps), and other Web3-related businesses.
Free zones in UAE
Free zones in the UAE are areas where entrepreneurs have 100% ownership of their businesses and have different regulatory frameworks and tax schemes, except for the UAE’s criminal law.
The new free zone adds to the more than 40 multidisciplinary free zones in the country that have attracted numerous crypto, blockchain, and Web3 firms, including the Dubai Multi Commodities Centre (DMCC), Dubai International Financial Centre (DIFC), and Abu Dhabi Global Market (ADGM).
RAK DAO’s approach
Dubai-based crypto lawyer Irina Heaver thinks RAK DAO will start with non-financial activities first, then may introduce financial activities at a later stage. She adds that entrepreneurs will be able to launch a crypto exchange later, which is an ESCA-regulated financial activity.
The Securities and Commodities Authority (SCA) is one of the UAE’s primary financial regulators. According to the country’s latest federal-level virtual assets law, the SCA has authority throughout the Emirates, except for the financial free zones, the ADGM and DIFC, and others, which have their financial regulators.
UAE’s regulatory framework
The UAE has more friendly regulations for crypto firms, and the country has positioned itself as a forward-thinking hub for such firms. In March 2022, Dubai unveiled its virtual assets law and the Virtual Asset Regulatory Authority to protect investors and provide standards for the digital asset industry.
In September 2022, the Financial Services Regulatory Authority, the regulator of the ADGM, published guiding principles on its approach to regulating and overseeing the new asset class and its service providers.