The city of Ras Al Khaimah (RAK), UAE, intends to introduce a free zone for digital and virtual asset companies. The government of Ras Al Khaimah says this free zone will be called the RAK Digital Assets Oasis. This announcement was made recently in the international forum Blockchain Life 2023.
The reason behind such a decision could be that the UAE wants to invite global crypto businesses to set up shop in Ras Al Khaimah, one of the seven Emirates of the United Arab Emirates (UAE). With this new move, the free zone will enable innovation for non-regulated activities within the virtual asset space.
Sheikh Mohammed Al Qasmi, chairman of the RAK ICC, announced:
We are proud to further the UAE’s position as a primary destination for innovation with the launch of RAK Digital Assets Oasis. We are building the free zone of the future for companies of the future. As the world’s first free zone solely dedicated to digital and virtual asset companies, we look forward to supporting the ambitions of entrepreneurs from around the world.
According to reports, this free zone for digital and virtual asset service providers will be open for applications in the second quarter of 2023.
What Is A Free Zone Exactly?
A free zone, or free-trade zone, is an economic area where businesses and entrepreneurs will have absolute ownership of their businesses. This also means that entrepreneurs are entitled to have their very own tax schemes and regulatory frameworks; this preferential structure will not, however, include the UAE’s criminal law.
A virtual asset-free zone will include digital asset service providers from the sectors of non-fungible tokens (NFTs), blockchain, decentralized autonomous organizations (DAOs), utility tokens, the metaverse, and any other business that is connected to the crypto/Web3 ecosystem.
The UAE, specifically, has been very welcoming towards the virtual asset industry. It has dedicated resources to invest in and develop its infrastructure to become conducive to the growth of the digital asset industry. The UAE has also developed policies to assist entrepreneurs in this space, as the country seeks to expand beyond its oil-based economy.
This free zone will encourage virtual asset companies by adopting frameworks that help accelerators and incubators in the digital and virtual asset industries. This zone will provide advisory services, sandboxes, and hybrid workspaces. There will be access to funding as well. RAK Digital Assets Oasis will also support this business-friendly infrastructure by providing progressive policies.
What Does The Country’s Federal Virtual Asset Law State?
The Securities and Commodities Authority (SCA) is the UAE’s primary financial regulator. According to the SCA and the most recent federal-level law on virtual assets, the SCA has the authority to govern the industry all across the Emirates apart from the financial free zones, which include the Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC).
ADGM and DIFC have their own sets of financial regulators. In the UAE, new free zones have added more than 40 multidisciplinary companies, including many new crypto, blockchain, and Web3 companies. This includes the Dubai Multi Commodities Centre (DMCC), DIFC, and ADGM.
