- UAE introduces a legal framework for DAOs, promoting growth in decentralized governance.
- DAOs can register remotely in the UAE, offering legal protection and property rights.
- UAE’s cost-effective setup aims to attract global entrepreneurs and smaller DAOs.
The United Arab Emirates (UAE) is preparing to launch a legal framework for decentralized autonomous organizations (DAOs). The Ras Al Khaimah Digital Assets Oasis (RAK DAO), a free economic zone, will unveil the new rules on October 25 at the DAO Legal Clinic.
The framework will establish legal and governance guidelines for DAOs, including a legal structure to define tax obligations and ownership rights for on-chain and off-chain assets. It will also offer legal protection for DAO founders, members, and contributors.
Irina Heaver, a partner at NeosLegal, says the framework will enable DAOs to enter legally binding contracts and establish clear procedures for handling internal and external conflicts. The new rules aim to support DAO development and strengthen the UAE’s blockchain sector.
Global Accessibility and Cost-Effectiveness Attract DAOs
Under the new regime, DAOs can be established remotely without a physical presence in the UAE, allowing global participants to easily register DAOs and open bank accounts within the country. Heaver highlights the UAE’s cost-effective approach compared to other jurisdictions.
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Heaver said that setting up a DAO in Switzerland can cost up to $46,000, while the process in the UAE starts at $3,000. This affordability will make it easier for smaller DAOs to operate legally in the UAE. The framework is expected to draw more entrepreneurs and developers to the country’s virtual asset sector.
UAE Strengthens Position as a Hub for Digital Asset Innovation
The UAE has already established itself as a center for digital asset innovation, and these new rules will further solidify that position. While Switzerland also allows DAOs through legal casing, the UAE framework is designed to be more versatile and cost-effective.
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The new rules will provide DAOs with a clear legal structure, supporting the growth of decentralized governance and the broader Web3 ecosystem.
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