Feb 28, 2023

RAK Launches Free Zone for Digital Asset Companies

The United Arab Emirates (UAE) is continuing to attract global crypto players with its approach to the industry, as Ras Al Khaimah, one of the seven emirates that make up the UAE, prepares to launch a new free zone for digital and virtual asset companies.

The RAK Digital Assets Oasis (RAK DAO) is a “purpose-built, innovation-enabling free zone for non-regulated activities in the virtual assets sector” and applications are set to open in the second quarter of 2023, according to a statement.

The free zone is designed for digital and virtual asset service providers in emerging technologies, such as the metaverse, blockchain, utility tokens, virtual asset wallets, NFTs, DAOs, dApps and other Web3-related businesses.

Sheikh Mohammed bin Humaid bin Abdullah Al Qasimi, chairman of RAK ICC, the operator of the new free zone, said: “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, with the exception of the UAE’s criminal law.

Crypto lawyer Irina Heaver believes that “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 Securities and Commodities Authority (SCA) is one of the UAE’s main financial regulators and, 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, which have their own financial regulators.

The new free zone joins the more than 40 multidisciplinary free zones already 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).

The UAE has become known as a forward-thinking hub for crypto firms looking for jurisdictions with friendlier regulations. Last year, Dubai unveiled its virtual assets law, along with the Virtual Asset Regulatory Authority (VARA), to protect investors and provide standards for the digital asset industry.

In September, the Financial Services Regulatory Authority, the regulator of the ADGM, published its guiding principles on its approach to regulating and overseeing the new asset class and its service providers.

The RAK DAO free zone is the latest development in the UAE’s drive to become a leader in the crypto space, enabling entrepreneurs to take advantage of the country’s supportive environment for NFTs, crypto, and web3 businesses.

The free zone provides a safe and secure environment for NFTs and crypto businesses to promote and sell their products and services, as well as a platform for NFT marketing and promotion.

The free zone also allows businesses to benefit from the UAE’s progressive approach to crypto and web3 legislation, as well as access to a range of services from a dedicated NFT marketing agency and web3 agency to help businesses succeed in the digital asset space.

With the launch of the RAK DAO free zone, the UAE is set to become a leading destination for crypto and web3 entrepreneurs, offering a supportive and innovative environment to help businesses reach their goals.

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