Ras Al Khaimah's government plans to launch a free zone for digital and virtual asset companies as the UAE continues to attract a number of companies from this industry, drawing more foreign direct investment and positioning itself as a global tech centre.
The RAK Digital Assets Oasis will be a purpose-built, innovation-enabling free zone for non-regulated activities in the virtual assets sector and will start accepting applications in the second quarter of 2023, according to a government statement on Monday.
“We are proud to further the UAE’s position as a primary destination for innovation with the launch of RAK Digital Assets Oasis”, said Sheikh Mohammed Al Qasimi, chairman of RAK ICC, the operator of the free zone.
“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 entrepreneursfrom around the world.”
Free zones — also known as free-trade zones — are economic areas where business owners have 100 per cent ownership of their organisations and tend to have preferential tax schemes.
The UAE has been investing heavily in developing its infrastructure and implementing policy reforms to attract more entrepreneurs and businesses to the country as it seeks to grow its non-oil sector.
The national digital economy is expected to grow to more than $140 billion in 2031, up from nearly $38 billion currently, the Dubai Chamber of Digital Economy said in a report this month.
Meanwhile, regulatory agencies in the country have been adopting laws to streamline and supervise the digital asset industry.
In March last year, Dubai adopted the Dubai Virtual Asset Regulation Law, which aims to create an advanced legal framework to protect investors and provide international standards for virtual asset industry governance that promotes responsible business growth in the emirate.
It also established the Virtual Asset Regulatory Authority (Vara) as an independent body to regulate the sector throughout Dubai, including special development zones and free zones, but excluding the Dubai International Financial Centre.
Last September, the Financial Services Regulatory Authority, the regulator of Abu Dhabi's financial hub, The Abu Dhabi Global Market, published guiding principles on its approach to virtual asset regulation and supervision to outline its expectations for the asset class and service providers in the sector.
However, the UAE Central Bank does not recognise cryptocurrencies as legal tender.
RAK Digital Assets Oasis is intended to be solely dedicated to digital and virtual assets service providers in new and emerging sectors, including the metaverse, blockchain, utility tokens, virtual asset wallets, non-fungible tokens, decentralised autonomous organisations, decentralised applications, and other Web3-related businesses, according to the statement.
With the UAE’s “established reputation as an innovation hub”, the free zone will deliver a unique offering to global entrepreneurs, according to Sameer Al Ansari, chief executive of RAK ICC and Digital Assets Oasis.
“We look forward to welcoming the world's brightest Web3 minds with their most disruptive ideas that uncover new approaches to creating a better future. We are committed to empowering the next generation of global entrepreneurial talent to build transformative solutions and create impact, while shaping the future of businesses and economies”, he said.
RAK Digital Assets Oasis will support companies with innovation-enabling adoption frameworks, advisory and professional services, hybrid workspaces, accelerators and incubators, sandboxes and access to funding.
The UAE offers more than 40 multidisciplinary free zones, in which expatriates and foreign investors can have full ownership of companies, according to the Ministry of Economy.
The Emirates is also offering incentives to attract digital companies to set up operations in the country.
Under the first phase of the NextGenFDI initiative, the country aims to attract 300 digital companies within six months to a year, Dr Thani Al Zeyoudi, Minister of State for Foreign Trade, said in July.