UAE unveils new legal framework to support DAO growth

The United Arab Emirates (UAE) has introduced a legal framework for Decentralized Autonomous Organizations (DAOs) through the RAK Digital Assets Oasis (RAK DAO). 

This initiative aims to strengthen the region’s position as a hub for Web3 innovation, offering crypto-friendly policies and regulatory clarity. 

Under the new DAO Association Regime, or “DARe,” RAK DAO has launched two distinct models: Startup DAO and Alpha DAO. 

The Startup DAO model caters to emerging projects with fewer than 100 members, providing a simplified regulatory process. 

The Alpha DAO model targets larger DAOs with treasuries exceeding $1 million, offering the necessary support for efficient scaling. 

Dr. Sameer Al Ansari, CEO of RAK DAO, emphasised the importance of the new framework. 

He explained that DARe provides DAOs with a separate legal identity and limited liability for members. 

Luc Froehlich, Chief Commercial Officer of RAK DAO, elaborated, stating, “This legal wrapper allows DAOs to interact with the off-chain world, such as opening a bank account and owning both on- and off-chain assets.” 

The DARe framework is designed to enhance the credibility of DAOs, facilitating interactions with stakeholders and investors. 

The UAE’s approach, marked by clear legal frameworks and tax optimisation, showcases its commitment to fostering blockchain innovation and digital asset growth. 

This proactive stance contrasts with recent moves in Italy, where increased capital gains tax on cryptocurrencies has been met with criticism. 

Italy’s focus on taxation, rather than nurturing innovation, diverges sharply from the UAE’s supportive regulatory environment, potentially leading to “capital flight” from digital asset ventures.