Ras Al Khaimah announces the launch of its free zone dedicated to digital and virtual asset companies

Ras Al Khaimah, one of the seven emirates in the UAE, is set to launch a free zone dedicated to digital and virtual asset companies, as the country’s approach to the industry continues to attract global players in the crypto space.

The statement said that Ras Al Khaimah Digital Asset Oasis (RAK DAO) will be “a free zone designed for this purpose, in addition to being a zone dedicated to enabling unregulated activities in the virtual asset sector to develop and innovate,” and added that work will begin in the second quarter of 2023.

The free zone will be dedicated to digital and virtual asset service providers in emerging technologies, such as metaverses, blockchains, leveraged tokens, virtual asset wallets, non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), decentralized applications (DApps), and other businesses related to the world of technology. Web 3.0.

“We are building the future free zone for the companies of the future,” said Sheikh Mohammed bin Humaid bin Abdullah Al Qasimi, Chairman of the Ras Al Khaimah International Corporate Center, operator of the new free zone. Entrepreneurs from all over the world.

Free zones or free trade zones are characterized as areas where entrepreneurs fully own their business, in addition to having special tax plans and regulatory frameworks, with the exception of the criminal law of the United Arab Emirates.

While planning the new free zone, Dubai-based cryptocurrency lawyer Irina Heffer stated that RAK DOA “will start with non-financial activities first, and then work to introduce financial activities at a later stage.” She added:

“(Entrepreneurs) will not be able to launch cryptocurrency exchanges yet, as this financial activity is considered to be regulated by the UAE Securities and Commodities Authority (ESCA).”

We consider the Securities and Commodities Authority (SCA) to be one of the main financial regulators in the UAE, and according to the most recent Virtual Assets Law at the federal level in the country, the SCA has jurisdiction in all parts of the Emirates, except for financial free zones, such as Abu Dhabi Market International Financial Center (ADGM), Dubai International Financial Center (DIFC) and others, which have their own financial regulators.

This new free zone will add to the multi-disciplinary free zones in the country that have attracted many of the more than 40 cryptocurrency, blockchain and web 3.0 companies, including the Dubai Multi Commodities Centre, the Dubai International Financial Center and the Abu Dhabi Global Market.

The UAE has positioned itself as a magnet for crypto firms looking to establish jurisdictions with friendlier regulations. In March 2022, Dubai unveiled the Virtual Assets Law, along with the establishment of the Virtual Assets Regulatory Authority, to protect investors and provide specific standards for the digital asset industry.

In September 2022, the Financial Services Regulatory Authority, the regulator of the Abu Dhabi Global Market, published guidelines on its approach to regulation and supervision of the new asset class and its service providers.