Ras Al Khaimah, one of the seven Emirates of the United Arab Emirates (UAE), is preparing to launch a dedicated free zone for digital and virtual asset firms, as the nation’s progressive approach to the crypto industry continues to entice global players.
Known as the RAK Digital Assets Oasis (RAK DAO), this free zone will serve as an innovation-focused hub for non-regulated activities within the virtual assets sector. The zone is scheduled to accept applications in the second quarter of 2023, according to an official statement.
RAK DAO will primarily accommodate service providers operating in emerging technologies, including the metaverse, blockchain, utility tokens, virtual asset wallets, non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), decentralized applications (DApps), and other Web3-related businesses.
Sheikh Mohammed bin Humaid bin Abdullah Al Qasimi, Chairman of the RAK International Corporate Centre, the entity overseeing the new free zone, expressed his vision, stating, “We are constructing the free zone of the future for companies of the future. As the world’s inaugural free zone exclusively dedicated to digital and virtual asset firms, we eagerly anticipate supporting the ambitions of entrepreneurs from across the globe.”
Free zones, also known as free-trade zones, grant entrepreneurs full ownership of their businesses and offer distinct regulatory frameworks and tax schemes, with the exception of criminal law governed by the UAE.
Irina Heaver, a crypto lawyer based in Dubai, outlined the anticipated progression of RAK DAO, noting that it will initially focus on non-financial activities and may later introduce financial activities. However, she clarified that entrepreneurs will not be immediately able to launch a crypto exchange, which falls under the purview of the regulated financial activities overseen by the Emirates Securities and Commodities Authority (ESCA).
The Securities and Commodities Authority (SCA) serves as a key financial regulator in the UAE. Under the country’s most recent federal-level virtual assets law, the SCA holds authority across the Emirates, except for the financial free zones like the Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC), which maintain their independent financial regulators.
This new free zone further expands the UAE’s repertoire of over 40 multidisciplinary free zones, which have successfully attracted numerous crypto, blockchain, and Web3 enterprises. Prominent examples include the Dubai Multi Commodities Centre (DMCC), DIFC, and ADGM.
The UAE has positioned itself as a forward-thinking hub for crypto firms seeking jurisdictions with favorable regulations. In March 2022, Dubai introduced its virtual assets law and established the Virtual Asset Regulatory Authority to safeguard investors and establish industry standards.
In September 2022, the Financial Services Regulatory Authority, the governing body of ADGM, published guiding principles outlining its approach to regulating and overseeing this novel asset class and its service providers.
Moritz Pindorek (Moritzpindorek.com)
Social Media, Marketing & Blockchain
Crypto/Web 3 Advisor, Top 10 Crypto Influencer 2022(Forbes Monaco) & Top 10 Entrepreneur 2022 (Forbes Monaco)
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