Virtual and digital assets to reign in UAE’s free zone, details inside
- UAE’s Ras al-Khaimah will launch a free zone for virtual and digital asset firms later this year.
- The free zone will have its own tax regime and regulatory framework.
The United Arab Emirates (UAE) will soon have a new free zone for companies operating in the virtual and digital asset space. Ras al-Khaimah (RAK), one of the seven Emirates of the UAE, has announced its plans to create a free zone for digital and virtual assets firms.
The RAK Digital Assets Oasis (RAK DAO) is expected to attract global crypto players and support non-regulated activities related to virtual assets.
Special tax regime for RAK Digital Assets Oasis
Set to launch in the second quarter of 2023, the RAK DAO will provide a space for companies working with emerging technologies such as blockchain, Non-Fungible Tokens [NFTs], decentralized applications (dApps), and decentralized autonomous organizations (DAOs). It will also cater to providers of crypto wallets, utility tokens, and other Web3-related ventures.
According to a report by Forbes, the free zone will be a designated area where entrepreneurs can operate under their own tax and regulatory systems, except for the criminal laws of the UAE.
According to Sheikh Al Qasimi, the chairman of the RAK International Corporate Centre, the RAK DAO will be the world’s first free zone exclusively for digital and virtual asset companies. The free zone is aimed at creating a space for innovative companies that are at the forefront of the digital and virtual asset industry.
The RAK DAO will initially focus on non-financial activities and may introduce financial activities later on. Entrepreneurs will not be permitted to start a crypto exchange immediately, as this is a financial activity regulated by the Emirates Securities and Commodities Authority (ESCA).
The latest federal-level law related to virtual assets in the country stipulates that the ESCA has jurisdiction over all the Emirates, except for the financial free zones such as the Dubai International Financial Centre and the Abu Dhabi Global Market, which have their own financial regulators.
RAK DAO will become the latest addition to the dozens of free zones that currently operate in the UAE.