UAE to Launch DAO Regulatory Framework by End of Month, Allowing Remote Registration for Legal Personification of DAOs

The United Arab Emirates (UAE) is set to introduce a legal framework for decentralized autonomous organizations (DAOs) in its free economic zones, with specific regulations expected to be proposed at a meeting on the 25th, according to reports. Irina Heaver, partner at NeosLegal law firm, stated that the framework is expected to govern how DAOs can maintain legality and compliance, noting that this will have a significant impact on decentralized governance in the UAE and the broader Web3 ecosystem.

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Irina Heaver pointed out: "Under the new regulations, DAOs can be registered in the UAE without the need for a physical presence in the UAE." In other words, DAOs can be "established remotely" in the UAE, and these organizations will be able to open bank accounts. Irina Heaver stated: "This remote access makes it easier for global participants to participate in the thriving digital asset industry in the UAE."

Earlier, we reported that Ben Zhou, founder of Bybit, expressed his true feelings, stating that Dubai sees blockchain as a development hope after oil, and the government welcomes exchanges with open arms, rather than viewing blockchain as criminal. Recently, OKX went to Dubai and brought back news of obtaining the Dubai regulatory VARA license and establishing a new headquarters in Dubai. At the end of the month, Binance Blockchain Week will also be held in Dubai, the joint choice of the three major exchanges implying that Dubai will be the next blockchain development hub if the industry can sustain for another decade.

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Introducing DAO Governance in Web 3 Free Economic Zone, DAO Compliance Landing

The RAK DAO in the Hayyakum Digital Asset Oasis is a free economic zone in the UAE focused on digital assets, where decentralized autonomous organizations (DAOs) will be incorporated into the legal framework. Irina Heaver stated: "Introducing a legal framework will enhance the UAE's position as a global center for blockchain and digital asset innovation, attracting entrepreneurs and developers."

It is understood that the new regulatory framework will address the legal and governance requirements of DAOs, including establishing a legal structure despite sounding quite decentralized. Specifically, the legal structure will define tax obligations and benefits. It will also define ownership of on-chain and off-chain assets, and provide legal protection for DAO founders, members, and contributors from personal liability. Additionally, this framework will enable DAOs to enter into legally binding contracts and establish guidelines for resolving internal and external disputes.

It's not that Switzerland is unaffordable to register, but the UAE is more cost-effective

However, the UAE is not the only sovereign country trying to regulate DAO development; DAOs can also be established in Switzerland. Although Switzerland does not have specific regulations for DAOs, it allows the establishment of DAOs within its jurisdiction through a regulatory framework.

Nevertheless, Irina Heaver pointed out that registering a DAO in the UAE would be more cost-effective. In Switzerland, the cost of establishing a DAO could be as high as $46,000, while in the UAE, it starts at $3,000. "This affordability allows even the smallest DAOs to protect themselves and operate within a legal framework," added Irina Heaver.