Recently, through the Ras Al Khaimah Digital Assets Oasis (RAK DAO), the UAE has announced plans to implement the legal structure for decentralized autonomous organizations (DAOs). This new regime is intended to empower even the smallest DAOs to operate legally within the country.
NeosLegal, in association with RAK DAO, clarified that the framework will be debated during the DAO Legal Clinic on October 25th. Irina Heaver, a partner at NeosLegal, stressed that the current framework should help define compliance expectations for DAOs and will impact decentralized governance and the Web3 ecosystem in the UAE.
As per the press release, the new framework would help meet basic legal and governance needs, such as legal identity for DAOs. It will endeavor to explain taxes and subsidies to the user and, more importantly, provide the ability to own property in chain and off-chain assets.
Moreover, it will offer legal shields from individual exposures for DAO founders, members, and contributors. It will also enable DAOs to undertake legally enforceable obligations and include procedures for dealing with intramural and intersociety conflicts.
UAE Embraces DAOs: A New Era for Blockchain Innovation and Investment
Under the new rules, DAOs can register in the UAE even though they are not physically based there. “DAOs can be established remotely,” she pointed out, adding the flexibility to attract participants worldwide who wish to work with the UAE’s developing virtual assets market. This framework will also help these organizations obtain bank accounts.
According to Heaver, this legal framework will help cement the UAE’s position as one of the best places to invest in blockchain and digital assets for innovators and developers worldwide.
Like any typical jurisdiction, DAOs can be created in Switzerland through a legal wrapper. He says the cost of forming a DAO in UAE is lower than what is charged back in America. Launching a DAO in Switzerland can cost between $45,000-$46,000 while starting one in the UAE costs a minimum of $3,000. “This availability makes matters possible for the smallest of the DAOs to be safeguarded and run legally,” said Heaver.
Having strengthened trends in the UAE for the formation of new regulations for digital assets, the adaptation of specific legislation for DAOs will also become a platform for the further development of innovation and the attraction of international personnel to the region.
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