Ras Al Khaimah, one of the seven Emirates of the United Arab Emirates (UAE), is set to launch a free zone designed specifically for digital and virtual asset companies, as the country’s approach to the industry continues to attract global crypto players.
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, with applications set to open in the second quarter of 2023.
The free zone is dedicated to digital and virtual assets service providers in emerging technologies, such as blockchain, metaverse, decentralized applications (DApps), non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), virtual asset wallets, utility tokens, and other Web3-related businesses.
According to Sheikh Mohammed bin Humaid bin Abdullah Al Qasimi, Chairman of the RAK International Corporate Centre, the operator of the new free zone,
“We are building the free zone of the future for companies of the future. As the world’s first free zone solely dedicated to digital and virtual asset companies, we look forward to supporting the ambitions of entrepreneurs from around the world.”
Free zones or free-trade zones are areas where entrepreneurs have 100% ownership of their businesses and have their own tax schemes and regulatory frameworks, except for the UAE’s criminal law.
Dubai-based crypto lawyer Irina Heaver thinks “RAK DAO will start with non-financial activities first, then may introduce the financial activities at a later stage.”
She added: “[Entrepreneurs] won’t be able to launch a crypto exchange just yet, which is an ESCA-regulated financial activity.”
The UAE has painted itself as a forward-thinking hub for crypto firms eyeing jurisdictions with friendlier regulations. In March 2022, Dubai unveiled its virtual assets law, along with 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 Abu Dhabi Global Market (ADGM), published guiding principles on its approach to regulating and overseeing the new asset class and its service providers.
The RAK DAO 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), DIFC, and the ADGM. The new free zone is set to support the ambitions of entrepreneurs from around the world and is another step towards establishing the UAE as a leading destination for digital and virtual asset companies.