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Authorities in the UAE have developed a legal framework for decentralized autonomous organizations (DAO) to function within the Ras Al Khaimah free economic zone (RAK DAO). This initiative is intended to enable international cryptocurrency firms to operate under the UAE’s legal structure without needing a physical presence in the nation.
The RAK DAO will implement new regulatory guidelines to oversee the formation and operation of a DAO. This legal framework will enhance the existing rules and regulations governing the country’s free economic zone.
The objective of the new legal framework is to clarify how cryptocurrency projects can operate within the UAE’s legal parameters while maintaining a decentralized approach, addressing the legal and governance needs for DAOs. Specifically, the draft legislation will:
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- clarify tax responsibilities and exemptions;
- permit DAOs to formalize ownership of digital assets and fiat currencies;
- offer legal protection from personal liability for DAO founders, members, and investors;
- allow DAOs to engage in legally binding agreements and set up dispute resolution protocols.
With the new framework, DAOs will have the capability to register in the UAE remotely and function without a physical presence in the country. This strategy is expected to draw international blockchain enterprises to the area, bolstering the UAE’s status as a global center for blockchain innovation.
The new framework will be discussed at the RAK DAO conference, scheduled for October 25.
Recently, the UAE Ministry of Finance implemented several amendments to tax laws, exempting cryptocurrency firms from VAT. Additionally, the country’s financial regulators have agreed to establish a unified licensing system for crypto-asset service providers in the region.
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