UAE Set to Establish Legal Framework for DAOs

The Ras Al Khaimah Digital Assets Oasis (RAK DAO), a free economic zone in the United Arab Emirates focused on digital assets, is set to introduce a legal framework for decentralized autonomous organizations (DAOs).
In an
announcement
sent to Cointelegraph, law firm NeosLegal and RAK DAO said the new regime will be introduced and discussed at the DAO Legal Clinic on Oct. 25.
Irina Heaver, a partner at NeosLegal, told Cointelegraph that the framework is expected to clarify how DAOs can remain legally compliant, which she believes will significantly impact decentralized governance and the broader Web3 ecosystem in the UAE.
Legal wrapper for DAOs
RAK DAO’s announcement noted that the new framework will address legal and governance requirements for DAOs, including establishing a legal structure.
The announcement highlighted that the legal structure will clarify tax obligations and benefits. It will also enable property ownership of onchain and offchain assets and provide legal protection from personal liability for a DAO’s founders, members and contributors.
The free zone added that the legal framework will also enable DAOs to enter legally binding contracts and establish guidelines for resolving internal and external disputes.
Related:
Regulation by enforcement leads to ‘exodus’ of talent — RAK DAO exec
Remote establishment of DAOs in the UAE
Heaver told Cointelegraph that DAOs can be registered in the UAE under the new regime without physically being in the country. Heaver explained that DAOs can be “established remotely” without a physical presence in the UAE.
The UAE-based crypto lawyer also said these organizations can open bank accounts. “This remote accessibility makes it easier for global participants to engage with the UAE’s burgeoning virtual assets sector,” Heaver added.
Heaver believes introducing the legal framework would continue to establish the UAE’s position as a global hub for blockchain and digital asset innovation, attracting entrepreneurs and developers.
DAO legal wrappers can also be established in Switzerland. While Switzerland has no special regulations for DAOs, it also
allows
DAOs to be set up in its jurisdiction through a legal wrapper.
The UAE-based lawyer told Cointelegraph that establishing a DAO legal wrapper in the UAE would be much more cost-effective than in Switzerland. Heaver said that in Switzerland, a DAO setup may cost up to $46,000. However, the lawyer said that in the UAE, the process could start at $3,000.
“This affordability allows even the smallest DAOs to protect themselves and operate within a legal framework,” Heaver added.
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