- Ras Al Khaimah, one of the seven Emirates of the United Arab Emirates (UAE), is planning to establish a free zone for digital and virtual asset companies, as the country’s approach to the industry continues to attract global crypto players.
- In the UAE, free trade zones are areas where entrepreneurs own 100% of their businesses and benefit from preferential taxation and regulatory frameworks.
- The UAE has established itself as a forward-thinking hub for cryptocurrency companies.
The United Arab Emirates (UAE) is strengthening its position as a magnet for players in the burgeoning blockchain industry by introducing a new free zone tailored for digital and virtual asset firms.
Ras Al Khaimah, one of the UAE’s seven emirates, announced the RAK Digital Assets Oasis unveiling. This bespoke zone will serve as a dedicated, innovation-oriented space for unregulated activities in the virtual assets sphere.
According to an official government statement on Monday, the RAK Digital Assets Oasis will begin accepting applications from Q2 2023.
“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 around the world.”
The RAK Digital Assets Oasis will exclusively cater to providers of digital and virtual asset services within emerging sectors such as the metaverse, blockchain, utility tokens, virtual asset wallets, non-fungible tokens, decentralized autonomous organizations, decentralized applications, and other Web3-related ventures.
Support for Firms
The RAK Digital Assets Oasis will provide a range of support to firms, including adoption frameworks that encourage innovation, expert advisory services, flexible workspaces, accelerators, incubators, sandboxes, and access to funding. The government proactively offers incentives to entice digital firms to establish operations within its borders as part of the NextGenFDI initiative’s first phase, which seeks to draw 300 digital firms within six to twelve months.
The UAE as an Alliance of Free Zones
Free zones, also known as free-trade zones, are designated financial districts offering entrepreneurs complete ownership of their enterprises and favorable tax regimes. The UAE has been channeling significant resources towards infrastructure development and policy overhauls aimed at bolstering its appeal to businesses and entrepreneurs in a bid to expand its non-oil economy.
As recently reported by the Dubai Chamber of Digital Economy, the UAE’s digital economy is projected to surge to over $140 billion by 2031, up from its current value of approximately $38 billion.
Digital Asset Industry in Dubai
Dubai implemented the Dubai Virtual Asset Regulations Law in March last year, intending to establish a cutting-edge legal framework that safeguards investors and sets global standards for governance within the virtual asset industry. This law intends to promote the responsible expansion of the sector within the emirates.
Virtual Asset Regulatory Authority (Vara) The Dubai Virtual Asset Regulation Law also gave rise to the Virtual Asset Regulatory Authority (Vara), an independent entity tasked with regulating the industry across Dubai’s unique development and free zones, except the Dubai International Financial Centre.
In recent years, the UAE has made significant strides toward becoming a global leader in the crypto and blockchain space.
Establishing the Dubai Multi Commodities Centre (DMCC) Crypto Centre was one of the most notable initiatives. This is the world’s largest cryptocurrency exchange regarding trading volume. The DMCC Crypto Centre has played an essential role in establishing a favorable environment for crypto firms to operate in the UAE.