The Establishment of new FZ – RAK DAO

On October 19, 2023, a significant milestone was reached with the official launch of the Ras Al Khaimah Digital Assets Oasis (“RAK DAO“), established earlier in the year through RAK Law No. 2 of 2023, referred as “RAK Digital Assets Oasis” Law, under the supervision of RAK’s Department of the Future.

The enactment of new legislation establishes the RAK DAO as an autonomous entity with comprehensive financial, administrative, and legislative authority.

This pioneering initiative of the Emirate of Ras Al Khaimah positions the newly established FZ as the premier innovation-centric hub, specifically designed to target the growing and rapidly evolving virtual assets industry.

RAK DAO stands out as the first of its kind globally, dedicated exclusively to fostering digital and virtual asset enterprises that are at the forefront of emerging technologies. This includes, but is not limited to, developments within the metaverse, blockchain technology, utility tokens, virtual asset wallets, Non-Fungible Tokens (NFTs), DAO’s, Decentralized Applications (DApps), and other ventures intrinsic to Web3 innovation.

The RAK DAO aims to serve as a bespoke ecosystem for next-generation technologists and entrepreneurs, thereby solidifying its position as the only FZ worldwide singularly focused on the digital and virtual asset sectors.

During the inauguration, the newly established FZ entered into a MoU with the UAE Securities and Commodities Authority to establish a regulatory framework for the targeted activities.

Article (2) of the governing legislation meticulously outlines the foundational elements pertaining to the establishment of the RAK DAO, delineating key definitions that provide clarity and legal precision.

These definitions are instrumental in the legal structuring and operational governance of the free zone, encompassing the following terms:

• State: United Arab Emirates
• Emirate: The Emirate of Ras Al Khaimah
• Government: The Government of Ras Al Khaimah
• Public Prosecutor: The public prosecutor of the Emirate
• Department: The Department of the Future established by virtue of Law No 1 of 2023
• RAK Digital Assets Oasis: The zone established by virtue of this Law and which is jurisdictionally defined in accordance with the relevant Emiri Decrees issued in this respect
• Authority: The RAK Digital Assets Oasis Authority, the governing body vested with the power to administer and regulate the free zone.
• Companies: All types of companies licensed by the Authority, and in accordance with the regulations.
• Activity: All activities licensed by the Authority in accordance with the provisions of applicable federal laws and the objectives of this Law. The free zone will cater to companies operating in emerging virtual assets businesses and other future technology activities.

In accordance with Article (4) of RAK Law No. 2 of 2023, the mandate of RAK Digital Assets Oasis is delineated to encompass the achievement of specific and strategic goals:

• Raising the levels of economic growth and diversification in the Emirate.
• Promoting the status of the Emirate and enhancing its competitiveness as an economic and global destination for business.
• Attracting national and foreign investments in all economic fields.
• Providing a flexible business environment and enhancing opportunities for success and prosperity.
• Licensing companies are involved in the virtual assets sector, as well as digital and electronic activities and the activities which relate to both.
• Securing residency permits for companies and individuals in coordination with concerned authorities.

Benefits of Incorporating in RAK Digital Assets Oasis

• 100% foreign ownership.
• Full repatriation of profits and capital.
• The Authority shall follow the international financial reporting standards for businesses operating in the UAE.
• Businesses can incorporate with at least one shareholder, director and manager.
• Companies may establish and operate though local bank account.
• Flexible and hybrid office spaces, based on the requirements of the Business License.

Types of Company Registration in RAK DAO

Companies established within RAK DAO will be governed by the Regulations outlined in RAK Law No. 2 of 2023 and the Ras Al Khaimah Digital Assets Oasis Companies Regulations 2023 (“Companies Regulations“).

1. Type of Entities
   • • Companies limited by shares.
     • Companies limited by guarantee.
     • A branch of a foreign company.
2. Type of Licenses
   1. • SPV – special purpose vehicle incorporated in the Zone following the following the Companies Regulations.
      • SPC – segregated portfolio company incorporated in the Zone following the Companies Regulations.
      • CLC – a company limited by shares incorporated in the Zone following the Companies Regulations.
      • CLG – a company limited by guarantee incorporated in the Zone following the Companies Regulations.
      • PLC – a public listed company limited by guarantee incorporated in the Zone following the Companies Regulations – Regulation 9 (2).
      • PJSC – a public joined stock company incorporated in the Zone following the Companies Regulations.

Conclusion

In conclusion, the establishment of the Ras Al Khaimah Digital Assets Oasis is poised to significantly enhance Ras Al Khaimah’s standing as a hub for cutting-edge businesses and a catalyst for the economic landscape of the digital future of the Emirate and the UAE.

The emphasis is squarely on nurturing entrepreneurial spirit, particularly within the dynamic and rapidly evolving realms of digital and virtual assets that demand continual innovation and expeditious development.
The inauguration of this free zone is expected to act as a magnet for both visionaries, eager to bring their digital ambitions to fruition through the support of an ecosystem, law legal framework based on common law system and also attracting the established international digital conglomerates looking to extend their presence. It is an invitation to innovation, promising to introduce fresh vigor into the economy by creating employment opportunities and attracting foreign direct investment.

In essence, the free zone is more than a mere location; it represents a strategic investment in the future, fostering a conducive environment for the digital ideas of today to become the economic drivers of tomorrow.