The Ras Al Khaimah Digital Assets Oasis (RAK DAO), a free economic zone in the United Arab Emirates focused on digital assets, is poised to launch a groundbreaking legal framework specifically designed for decentralized autonomous organizations (DAOs). This initiative aims to enhance clarity and compliance for DAOs operating within the region, marking a significant step forward for the Web3 ecosystem in the UAE.
In an announcement shared, RAK DAO, in collaboration with the law firm NeosLegal, revealed that the new legal regime will be discussed at the upcoming DAO Legal Clinic on October 25. Irina Heaver, a partner at NeosLegal, highlighted that this framework is expected to provide essential guidance on how DAOs can remain legally compliant. She believes that this clarity will greatly influence decentralized governance and the broader Web3 landscape in the UAE.
The framework will address several critical aspects for DAOs, including:
One of the most notable aspects of the new regime is that DAOs can be registered in the UAE without needing a physical presence in the country. Heaver explained that this remote establishment allows global participants to easily engage with the UAE’s rapidly growing virtual assets sector. Furthermore, the new framework facilitates the opening of bank accounts for these organizations, enhancing their operational capabilities.
Heaver emphasized that the introduction of this legal framework reinforces the UAE’s position as a global hub for blockchain and digital asset innovation. By attracting entrepreneurs and developers, the region aims to foster a vibrant ecosystem for digital assets.
While DAOs can also be established in Switzerland, the costs associated with setting up a DAO legal wrapper there can be prohibitively high—potentially reaching up to $46,000. In contrast, the establishment of a DAO in the UAE can start at around $3,000, making it a more accessible option for smaller organizations. Heaver noted, “This affordability allows even the smallest DAOs to protect themselves and operate within a legal framework.”
The RAK DAO's initiative to introduce a legal framework for DAOs marks a significant development in the UAE’s efforts to enhance compliance and foster innovation within the digital asset space. By providing a structured approach for DAOs, the region is poised to attract global participants and solidify its reputation as a leading hub for blockchain and digital asset development. As the legal landscape for DAOs evolves, the potential for growth and collaboration within the Web3 ecosystem in the UAE looks promising.
October 2024, Cryptoniteuae