One of the seven Emirates of the United Arab Emirates (UAE), Ras Al Khaimah, is getting ready to establish a free zone for businesses dealing in digital and virtual assets as the nation’s approach to the sector continues to draw in major participants from around the world.
It will be a “purpose-built, innovation-enabling autonomous zone for non-regulated activities in the virtual assets sector,” according to the RAK Digital Assets Oasis (RAK DAO). According to the announcement, applications will be accepted starting in the second quarter of 2023.
The free zone will be devoted to digital and virtual asset service providers in cutting-edge technologies, including the metaverse, blockchain, utility tokens, virtual asset wallets, nonfungible tokens (NFTs), decentralized autonomous organizations (DAOs), decentralized applications (DApps), and other Web3-related businesses.
The chairman of RAK International Corporate Centre, which runs the new free zone, Sheikh Mohammed bin Humaid bin Abdullah Al Qasimi, said, “We are building the free zone of the future for businesses of the future.” We are excited to support the goals of businesspeople from around the world as the first free zone in the world exclusively for businesses dealing in digital and virtual assets.
Free zones, also known as free trade zones, are places where company owners own 100% of their companies and are in charge of setting up their own tax structures and regulatory frameworks, with the exception of UAE’s criminal code.
Irina Heaver, a cryptocurrency lawyer based in Dubai, has laid out the steps for the new free zone and predicts that “RAK DAO will start with non-financial activities first, then may introduce the financial activities at a later time.” She added:
“[Entrepreneurs] will not have the option to send off a crypto exchange presently, which is an ESCA-regulated financial activity.”
One of the key regulatory bodies for the UAE’s financial sector is the Securities and Commodities Authority (SCA). According to the nation’s most recent federal-level virtual assets legislation. The SCA is in charge of all of the Emirates, with the exception of the financial free zones, such as the Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC), that also have their own financial regulators.
The nation already has more than 40 multidisciplinary free zones, including the Dubai Multi Commodities Centre (DMCC), DIFC, and the ADGM, which have drawn numerous blockchain, cryptocurrency, and Web3 companies. The new free zone is one more to join this list.
For cryptocurrency companies looking for jurisdictions with friendlier laws, the UAE has positioned itself as a forward-thinking hub. Dubai unveiled its virtual assets law and the Virtual Asset Regulatory Authority in March 2022. To safeguard investors and establish guidelines for the digital asset sector.
The ADGM’s supervisor, the Financial Services Regulatory Authority, released guiding principles in September 2022. Outlining how it would regulate and supervise the new asset class and its service providers.