UAE emirate will launch a free zone for digital and virtual asset firms AKA crypto players

Ras Al Khaimah is trying to attract the global crypto community.

Companies, developing digital and virtual assets will have a free-trade zone in one of the United Arab Emirate’s (UAE) seven Emirates. It means entrepreneurs have 100% ownership of their businesses and have different regulatory frameworks and tax schemes. The announcement was made at the Blockhain Life 2023 event attended by Durov's Code.

The initiative called 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”. Companies could apply from the second quarter of 2023, the statement said.

It's not about only crypto, the free zone will be dedicated to things like metaverse, blockchain, utility tokens, virtual asset wallets, NFT, decentralized autonomous organizations (DAO), decentralized applications (DApps), and other Web3-related projects.

"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.", said Sheikh Mohammed bin Humaid bin Abdullah Al Qasimi, chairman of the RAK International Corporate Centre, the operator of the new free zone

As the Dubai-based crypto lawyer Irina Heaver points out, "RAK DAO will start with non-financial activities first, then may introduce the financial activities at a later stage."

“[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 main financial regulators in the UAE. The SCA has authority throughout the Emirates, except for the financial free zones, which have their own regulations.

UAE already has more than 40 multidisciplinary free zones in the country but none of them are web3-focused. Emirates is positioning itself as the hub for crypto firms eyeing jurisdictions with friendlier regulations. For example, in March 2022, Dubai unveiled its virtual assets law to protect investors and provide standards for the digital asset industry.