RAK DAO: UAE's New Legal Framework for Decentralized Organization
RAK DAO New Legal Framework: Benefits for Decentralized Organizations
The Ras Al Khaimah Digital Assets Oasis (RAK DAO), a free economic zone in the United Arab Emirates (UAE), is poised to revolutionize the digital assets landscape by introducing a comprehensive legal framework for decentralized autonomous organizations (DAOs). This new regime, set to be discussed at the DAO Legal Clinic on October 25, aims to provide clarity and legal certainty for DAOs operating within the UAE.
Key Benefits of UAE’s New DAO Framework
The introduction of this legal framework is a strategic move by the UAE to attract more blockchain-based projects and foster innovation in the digital assets sector. By offering a clear and supportive legal environment, the UAE is set to become a preferred destination for DAO formation and operation, driving forward its vision of becoming a global leader in blockchain and digital assets.
Legal Protection: Ensures personal liability protection for DAO founders, members, and contributors.
Asset Ownership: Allows DAOs to own both digital and physical assets.
Cost-Effective: Significantly lower setup costs compared to other jurisdictions.
Remote Registration: Enables DAOs to be established without physical presence in the UAE.
Contractual Capabilities: Empowers DAOs to enter legally binding contracts.
Dispute Resolution: Provides guidelines for resolving disputes.
Irina Heaver, a partner at NeosLegal, emphasized that the new framework will offer a detailed legal structure for DAOs, addressing tax obligations, property ownership, and legal compliance. It ensures DAOs can establish a legal structure, clarify tax benefits, own on-chain and off-chain assets, protect members from personal liability, enter legally binding contracts, and resolve disputes.
DAOs Remote Establishment and Global Participation
One of the standout features of the new regime is the ability for DAOs to be registered remotely, without the need for physical presence in the UAE. This remote accessibility allows global participants to engage with the UAE’s crypto sector, significantly lowering the entry barrier for international entrepreneurs and developers.
Heaver emphasized that this initiative would cement the UAE’s position as a global hub for blockchain and digital asset innovation. Compared to other jurisdictions, such as Switzerland, where setting up a DAO can cost up to $46,000, the UAE offers a more cost-effective solution starting at just $3,000. This affordability makes it feasible for even the smallest DAOs to protect themselves and operate within a legal framework.
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