As the nation’s approach to the crypto industry continues to draw in international crypto players, Ras Al Khaimah, one of the United Arab Emirate’s (UAE) seven Emirates, has announced that it is set to introduce a free zone for businesses dealing in digital and virtual assets.

Free zones or free-trade zones are areas where entrepreneurs have 100% ownership of their businesses and have their own tax schemes and regulatory frameworks, except for the UAE’s criminal law.

The free zone is to be named RAK Digital Assets Oasis (RAK DAO) and it will be a purpose-built, innovation-enabling free zone for non-regulated activities in the virtual assets sector. It will be dedicated to digital and virtual assets service providers in emerging technologies, such as the metaverse, blockchain, utility tokens, virtual asset wallets, nonfungible tokens (NFTs), decentralized autonomous organizations (DAOs), decentralized applications (DApps) and other Web3-related businesses.

According to the UAE Emirate’s statement, applications will open in the second quarter of 2023.

Sheikh Mohammed bin Humaid bin Abdullah Al Qasimi, Chairman of the RAK International Corporate Centre, the operator of the new free zone commented, “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 from around the world.”

Drawing up the new free zone’s steps, Dubai-based crypto lawyer Irina Heaver thinks RAK DAO will start with non-financial activities first, then may introduce financial activities at a later stage.

She added, “Entrepreneurs won’t be able to launch a crypto exchange just yet, which is an ESCA-regulated financial activity.”

The Securities and Commodities Authority (SCA) is one of the UAE’s main financial regulators. According to the country’s latest federal-level virtual assets law, the SCA has authority throughout the Emirates, except for the financial free zones, the Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC), and others, which have their own financial regulators.

The new free zone adds to the more than 40 multidisciplinary free zones in the country that have attracted numerous crypto, blockchain, and Web3 firms, including the Dubai Multi Commodities Centre (DMCC), DIFC and the ADGM.