The framework will also enable DAOs to enter legally binding contracts and create guidelines for resolving internal and external disputes.
The Ras Al Khaimah Digital Assets Oasis (RAK DAO), a free economic zone in the UAE focused on digital assets, is preparing to launch a legal framework specifically for decentralized autonomous organizations (DAOs).
According to an announcement shared with Cointelegraph, law firm NeosLegal and RAK DAO stated that the new regime will be introduced and discussed during the DAO Legal Clinic on October 25.
Irina Heaver, a partner at NeosLegal, explained to Cointelegraph that the framework aims to clarify how DAOs can remain legally compliant, which she believes will significantly influence decentralized governance and the broader Web3 ecosystem in the UAE.
Legal Structure for DAOs
RAK DAO’s announcement highlighted that the new framework will cover legal and governance requirements for DAOs, including the establishment of a legal structure.
This structure will outline tax obligations and benefits, allow ownership of both onchain and offchain assets, and offer legal protection from personal liability for DAO founders, members, and contributors.
The framework will also enable DAOs to enter legally binding contracts and create guidelines for resolving internal and external disputes.
Remote Establishment of DAOs in the UAE
Heaver noted that DAOs could be registered in the UAE under the new regime without requiring a physical presence in the country, allowing DAOs to be “established remotely.” This will also enable DAOs to open bank accounts.
Heaver added that this remote accessibility makes it easier for global participants to engage with the UAE’s growing virtual assets sector.
She further mentioned that the new legal framework would strengthen the UAE’s position as a global center for blockchain and digital asset innovation, attracting developers and entrepreneurs.
While DAO legal wrappers can also be set up in Switzerland, where there are no specific regulations for DAOs, Heaver pointed out that establishing a DAO in the UAE would be far more cost-effective.
She noted that while setting up a DAO in Switzerland could cost up to $46,000, the process in the UAE would start at just $3,000.
“This affordability allows even the smallest DAOs to protect themselves and operate within a legal framework,” Heaver added.
