Free-trade zones in the UAE are areas where entrepreneurs have 100% ownership of their businesses and have different regulatory frameworks and tax schemes.
Ras Al Khaimah, one of the seven capital cities of the United Arab Emirates (UAE), is set to launch a free zone for digital and virtual industries as the country’s path to continue growth attracts global crypto players.
The RAK Digital Assets Oasis (RAK DAO) will be an “organized and innovative free zone for unorganized activities in the virtual asset industry”. Applications will open in the second quarter of 2023, according to the statement.
The free zone will be dedicated to providers of digital and virtual assets and emerging technologies, such as metaverse, blockchain, utility tokens, virtual asset wallets, non-fungible tokens (NFTs), autonomous companies Decentralized Applications (DAOs), Decentralized Applications (DApps). ) and other Web3-related transactions.
“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 the RAK International Corporate Center, the operator of the new free zone. “As the first free zone in the world dedicated solely to digital and efficient companies, we look forward to supporting the goals of entrepreneurs around the world.”
A free zone or free trade zone is an area where entrepreneurs own 100% of their business and have their own tax system and legal framework, apart from the UAE criminal law.
Setting the stage for the new free zone, Dubai-based crypto lawyer Irina Heaver believes that “RAK DAO will start with non-financial activities first and introduce financial activities at a later stage.” He added:
“[Investors] will not be able to start crypto exchanges, which are financial services regulated by ESCA.”
The Securities and Exchange Commission (SCA) is one of the leading financial institutions in the UAE. According to the new Federal Virtual Assets Act, SCA has jurisdiction in all Emirates except the free financial zone – Abu Dhabi Global Market (ADGM) and Dubai International Financial Center (DIFC) and others, with financial regulators of them.
The new free zone adds to the 40 free zones in the country that have attracted many crypto, Blockchain, and Web3 companies, including Dubai Multi Commodities Center (DMCC), DIFC, and ADGM. The UAE has declared itself as a forward-thinking place for crypto businesses looking at the right and friendly standards.
In March 2022, Dubai unveiled its Virtual Asset Regulatory Authority, as well as the Virtual Asset Regulatory Authority, to protect investors and provide regulation for the digital asset industry. In September 2022, the Financial Services Regulatory Authority – ADGM’s regulator – issued guidelines on how to organize and supervise the new class and its service providers.
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