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18/10/24
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RAK DAO: A New Legal Framework for Decentralized Autonomous Organizations in the UAE
The Ras Al Khaimah Digital Assets Oasis (RAK DAO) in the United Arab Emirates is poised to implement a comprehensive legal framework specifically designed for decentralized autonomous organizations (DAOs). This initiative aims to clarify legal compliance and governance structures for DAOs within the region, underlining its commitment to innovation in digital assets.
A legal clinic dedicated to discussing this new framework is scheduled for October 25, where industry experts will provide insights into how these regulations will operate. The legal framework will address critical aspects such as tax obligations, governance requirements, and the establishment of a legal identity for DAOs. This development is expected to empower DAOs by allowing them to own both on-chain and off-chain assets while providing legal protections for founders and contributors against personal liability.
Furthermore, the framework will enable DAOs to engage in legally binding contracts and outline procedures for resolving disputes, contributing to greater operational credibility. The ability to register DAOs without the necessity of a physical presence in the UAE will attract global participants. This remote establishment capability will enhance access for international entities looking to enter the UAE’s thriving digital asset market.
In addition to the conveniences provided, the costs associated with establishing a DAO in the UAE are significantly lower compared to other jurisdictions like Switzerland, where establishing a DAO can reach up to $46,000. In contrast, the initial setup costs in the UAE can start at just $3,000, making it a more accessible option for smaller DAOs seeking legal recognition.
Overall, these measures are expected to bolster the UAE’s position as a leading hub for blockchain and digital asset innovation, appealing to a diverse range of entrepreneurs and developers seeking to capitalize on the evolving landscape of digital assets and decentralized governance.
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