The UAE’s emirate, Ras Al Khaimah, is launching a free zone for crypto companies. The RAK Digital Assets Oasis (RAK DAO) has been designed to cater to the needs of service providers operating in the cryptocurrency sector by offering a specialized, innovation-focused free zone for non-regulated activities. This free zone is exclusively dedicated to supporting emerging technologies, including blockchain, utility tokens, virtual asset wallets, non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), decentralized applications (DApps), and other Web3-related ventures.
The RAK DAO will accept applications in the second quarter of 2023. The free zone is aimed at supporting entrepreneurs and their ambitions from around the world.
Free zones or free-trade zones are areas where entrepreneurs have 100% ownership of their businesses and have their tax schemes and regulatory frameworks, except for the UAE’s criminal law.
Dubai-based crypto lawyer Irina Heaver suggests that “RAK DAO will start with non-financial activities first, then may introduce the financial activities at a later stage.” However, entrepreneurs won’t be able to launch a crypto exchange yet, which is an ESCA-regulated financial activity.
The UAE boasts over 40 multidisciplinary free zones that have successfully attracted several Web3, blockchain, and crypto firms, such as the Dubai Multi Commodities Centre (DMCC), Dubai International Financial Centre (DIFC), and Abu Dhabi Global Market (ADGM).
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In March 2022, Dubai unveiled its virtual assets law and the Virtual Asset Regulatory Authority, while the Financial Services Regulatory Authority published guiding principles on its approach to regulating and overseeing the new asset class and its service providers in September 2022. The UAE has positioned itself as a forward-thinking hub for crypto firms looking for jurisdictions with friendlier regulations.
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