Ras Al Khaimah, one of the seven emirates that make up the UAE, is set to launch a free zone for digital and virtual asset companies as the country’s approach to the industry continues to attract global crypto players.
RAK Digital Assets Oasis (RAK DAO) will be “a purpose-built free zone and innovation for unregulated activities in the virtual assets sector.” Applications will open in the second quarter of 2023, the statement said.
The free zone will be dedicated to digital and virtual asset service providers in emerging technologies, such as metaverse, blockchain, utility tokens, virtual asset wallets, NFT, DAO, dApps and Web3-related businesses.
“We are building the free zone of the future for the companies of the future,” said Sheikh Mohammed bin Humaid bin Abdullah Al Qasimi, chairman of RAK ICC, the operator of the new free zone. “As the world’s first free zone dedicated to digital and virtual asset companies, we look forward to supporting the ambitions of entrepreneurs from around the world.”
A free zone or free trade zone is an area where entrepreneurs have 100% business ownership and have their own tax scheme and regulatory framework, apart from the UAE criminal law.
Building on the new free zone measures, Dubai-based crypto lawyer Irina Heaver thinks “RAK DAO will start with non-financial activities first, and then they can introduce financial activities at a later stage.” He added:
“[Entrepreneurs] cannot yet start a crypto exchange, which is a financial activity regulated by ESCA.
The Securities and Commodities Authority (SCA) is one of the UAE’s main financial regulators. According to the country’s latest federal-level virtual assets law, the SCA has jurisdiction throughout the Emirates, with the exception of the financial free zones – ADGM and DIFC, which have their own financial regulators.
The new free zone adds more than 40 multidisciplinary free zones in the country that have attracted many crypto, blockchain and Web3 companies, including Dubai Multi Commodities Center (DMCC), Dubai International Financial Center (DIFC), Abu Dhabi Global Market (ADGM).
The United Arab Emirates has painted itself as a forward-thinking hub for crypto companies looking at jurisdictions with friendlier regulations. In March last year, Dubai announced a virtual asset 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, ADGM’s regulator, published guiding principles on its approach to regulating and supervising new asset classes and service providers.