The free zone, called RAK Digital Asset Oasis (RAK DAO), is set to attract crypto businesses from around the world.
The UAE is set to launch the world’s first free zone dedicated to digital and virtual assets companies. The opening date is unspecified, but applications will open in the second quarter of 2023, according to the statement.
The free zone, named the RAK Digital Assets Oasis (RAK DAO), will be based in the northern emirate of Ras Al Khaimah. It will be dedicated to digital assets including utility tokens, DAOs, Dapps, NFTs and more, with a focus on emerging technology.
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A freezone is a designated area within a country’s borders where normal trade barriers such as customs duties, quotas, and taxes are lifted or reduced to encourage economic activity and foreign investment. They are often created by governments to promote trade and investment by offering various incentives to businesses that operate within the zone, such as tax exemptions, streamlined customs procedures, relaxed regulations, and access to infrastructure and logistics services.
The free zone is expected to attract Web3 oriented businesses from across the globe. The UAE – Dubai in particular – has been a long-standing hub for crypto projects due to its lax regulations and low tax.
In 2018, the UAE government launched The Emirates Blockchain Strategy 2021 – an initiative that aimed to transform 50 per cent of government transactions into the blockchain platform by 2021. It also announced The Dubai Blockchain Strategy – an ambitious strategy that pledged to make Dubai the first city fully powered by blockchain.
While these plans are yet to be fully implemented, the country remains one of the most crypto-tolerant.
The RAK DAO is an independent governmental authority affiliated with the newly created Department of the Future, established under Law No. 2 of 2023 by Sheikh Saud bin Saqr Al Qasimi, UAE Supreme Council Member and Ruler of Ras Al Khaimah.
Sheikh Saud bin Saqr Al Qasimi said: “Ras Al Khaimah has been playing a leading role in national efforts to strengthen the UAE’s diversified, sustainable economy.
“With the nation’s focus on digitalisation and encouraging enterprises of the future, RAK Digital Assets Oasis will serve as the gateway for global digital and virtual assets companies to establish their operations and grow their business.
“Our commitment is to provide an inspiring, innovation-centric environment that helps realise bright ideas that have transformational impact on the world.”
The free zone aims to “responsible innovation”, positioning the UAE at the forefront of emerging disruptive technologies.
The Sheikh added: “We are focused on promoting entrepreneurship, including the digital and virtual assets sector, which thrives on innovation and speed. The new free zone will encourage young talent to implement their powerful ideas for the digital world, as well as drive global digital players to expand their footprint through our free zone, which will add incremental value to the economy by creating new jobs and promoting inward investment.
“RAK Digital Assets Oasis will be a key economic growth engine for Ras Al Khaimah and the wider region.”
The new free zone will be a unique addition to the 40 multidisciplinary free zones in the UAE that already support Web3 firms, such as Dubai Multi Commodities Centre (DMCC), DIFC and the ADGM.
