UAE to Be First With DAO Legal Framework, More Rewarding for Blockchain Innovation
To date, the United Arab Emirates is one step away from becoming the world’s number one center when it comes to blockchain governance by offering a legal framework for DAOs. This has been created by RAK DAO, an economic zone that is primarily positioned for and addressing the scale-up and development of digital assets.
Governance and Legal Structure: Dispelling the Ambiguity
The newly announced legal framework would be introduced in the DAO Legal Clinic on 25th October 2024 to establish a clear legal framework for DAOs. As Irina Heaver, Partner at NeosLegal, showed, the framework is designed in such a way as to give confidence that DAOs operate within UAE’s legal framework while giving protection to founders, members, and contributors.
The framework will cover the skeleton structure of tax obligations, asset ownership on both chains and off-chain, and a protective mantle of legal liability protection. It will also give DAOs the legal right to contract with other parties and resolve disputes with both themselves and outsiders.
Remote Registration and Global Access
Another salient feature of the framework is that DAOs can be registered in the UAE from anywhere in the world without requiring an actual physical presence in the country. To this, Irina Heaver said that this is going to attract participants from all over the world because they will be engaged with the fast-growing Virtual Asset sector in UAE without being actually relocated to it.
Moreover, the DAOs will reach a point when they can create bank accounts, making the UAE a convenient and attractive destination for decentralized governance projects.
Cost-Effective Legal Solutions
The other major advantage is the cost of establishing a DAO in the UAE compared to any other country. While it would cost up to $46,000 to establish in Switzerland, starting costs in the UAE’s framework now go as low as $3,000, thus allowing even smaller DAOs an avenue to legally protect their operations.
Empowering the UAE Blockchain Position
Such a legal framework not only will ensure better governance within DAOs but also will further cement the position of the UAE as a world’s blockchain hub. The UAE, therefore, will offer an accessible and affordable regime to attract entrepreneurs and developers in search of friendly environments in which to innovate within Web3 and digital assets.
