RAK DAO Free Zone: Company Setup for Web3 and Digital Assets

If you have been researching where to start a blockchain, Web3 or digital asset company in the UAE, you have probably come across RAK DAO Free Zone.

There is one important update before you go any further.

RAK Digital Assets Oasis, commonly known as RAK DAO, officially became Innovation City in September 2025. Ras Al Khaimah amended the authority's name through local legislation, while expanding its focus beyond digital assets into AI, gaming, robotics and healthtech. Web3 and digital assets remain one of its core sectors. So, if you search for a RAK DAO licence in 2026, you are effectively looking at company formation under Innovation City.

For founders building blockchain infrastructure, decentralised applications, token-related technology, Web3 software or DAO projects, the free zone remains worth considering. The main issue is knowing where a normal technology licence ends and regulated virtual asset activity begins.

What Is RAK DAO Free Zone?

RAK Digital Assets Oasis was created in Ras Al Khaimah in 2023 as a specialised economic free zone for digital and virtual asset businesses.

Its original focus included blockchain companies, NFTs, DAOs, decentralised applications, metaverse businesses, gaming and other Web3 projects.

Following the 2025 change to Innovation City, its scope became broader. The authority now supports more than 200 technology and innovation-related activities covering Web3, blockchain, AI, gaming, robotics, cybersecurity, digital health and other technology sectors.

What Types of Web3 Businesses Can Set Up Here?

Innovation City remains particularly relevant to businesses working with blockchain technology rather than regulated financial services.

Potential activities can include:

• Blockchain software development

• Web3 infrastructure

• Decentralised application development

• Smart contract technology

• Web3 gaming

• NFT technology

• Tokenisation technology

• Blockchain analytics

• Cybersecurity

• Web3 consulting

• Digital identity technology

• Metaverse platforms

• DAO-related projects

The exact activity on your licence should match what your company actually does. Avoid choosing a broad blockchain activity simply because it sounds close enough.

A founder developing wallet software, for example, is in a very different regulatory position from a company taking custody of customers' crypto assets.

RAK DAO Licence vs Virtual Asset Regulatory Licence

This is the most important distinction to understand.

Innovation City is a commercial free-zone licensing authority. A company licence there does not replace a financial-services or virtual-asset regulatory licence when your business falls within a regulated category.

The UAE's Capital Market Authority, formerly the Securities and Commodities Authority, introduced an updated Virtual Assets Framework in April 2026. The framework covers eight regulated activities, including dealing in virtual assets as principal or agent, custody, arranging custody, arranging investment transactions, investment advice, portfolio management and operating a multilateral trading facility. 

Payment-token businesses need another check. The Central Bank's Payment Token Services Regulation covers areas such as payment-token issuance, conversion, custody and transfer.

Before incorporating, map out exactly what happens to customer money, tokens and private keys.

If your business trades for customers, gives investment advice, controls client assets or operates an exchange, get the regulatory position confirmed before paying for a normal free-zone licence.

For comparison, you can also read Nexture's guide on starting a crypto business in Dubai and the VARA approval process.

Legal Structures Available

Innovation City currently offers several company structures.

Company Limited by Shares

This is the normal choice for commercial startups and businesses with shareholders. Shareholder liability is generally limited to their investment.

Company Limited by Guarantee

This structure can suit non-profit organisations, associations and certain community-led structures.

Branch

An existing overseas or UAE company can establish a branch instead of creating an entirely separate shareholder-owned business.

For most commercial Web3 startups planning to raise investment, employ staff and earn revenue, a company limited by shares will usually be the more straightforward option.

Can You Register a DAO?

Yes. One feature that separates this jurisdiction from many general UAE free zones is its dedicated DAO Association Regulations.

A DAO Association can obtain separate legal personality and hold assets or enter contracts in its own name. Current regulations require at least two founding members. They also contain specific rules covering governance, token holders, councils, constitutions and DAO assets.

The regulations state that a DAO Association must operate on a permissionless distributed ledger and use publicly accessible open-source software code. Regulated financial activities remain outside the normal DAO Association licence.

That makes the structure relevant to decentralised communities that need a legal wrapper for contracts, governance or asset ownership.

RAK DAO Company Setup Cost in 2026

Current published Innovation City prices start considerably lower than many specialist technology jurisdictions.

The Idea, Startup and Growth packages currently include up to 10 standard or custom activities. Premium activities, additional visas and upgraded office space can cost extra. Package features may also change during promotional periods.

You can also check the current offers directly through the official Innovation City company setup information before budgeting.

Your real first-year cost can therefore be higher than the licence price once you add visas, Emirates ID processing, medical examinations, regulatory approvals, premium activities or additional workspace.

Documents Required for Company Formation

For an individual shareholder, you should normally prepare:

• Valid passport copy

• Proof of residential address

• UAE residence visa, if applicable

• Emirates ID, if applicable

• Business plan

• Source-of-funds information if requested

Innovation City also states that source-of-wealth evidence may be required for investments above USD 250,000.

If a company will hold shares, additional documents can include:

• Certificate of incorporation

• Memorandum and Articles of Association

• Board resolution

• Certificate of incumbency or good standing

• UBO documents

• Passport and address evidence for beneficial owners

Foreign corporate documents may need attestation depending on the issuing jurisdiction.

RAK DAO Company Formation Process

1. Define Your Business Activity

   Start with what the company will actually do. For Web3 projects, check whether any part of the business falls under CMA or CBUAE supervision.

2. Choose the Legal Structure

   Select a company limited by shares, guarantee structure, branch or, where appropriate, a DAO Association.

3. Select Your Package

   Your visa needs, number of shareholders, activities and workspace requirements will affect the package.

4. Submit the Documents

   Applications can be completed digitally. Physical presence is generally not required for the incorporation stage.

5. Complete Compliance Checks

   The authority carries out KYC, due diligence, business-activity assessment and document verification.

6. Pay the Fees and Receive the Licence

   Once the application is approved and the fees are paid, the licence is issued digitally.

   Innovation City currently states that company formation can take around 5 to 10 working days for standard cases. Regulated or more complex activities can take longer.

Is RAK DAO a Good Choice for Your Web3 Business?

It can make sense if you are running a lean technology business, building blockchain infrastructure or developing a Web3 product without carrying out regulated financial services.

The low starting licence cost, remote registration process, specialist activities, DAO framework and technology-focused business environment are practical advantages.

It becomes more complicated when your model involves customer assets, investment activity, exchange services, payment tokens or large teams. In those cases, licensing costs are only one part of the decision. Regulatory approval, banking, staffing and compliance can matter far more.

Conclusion

RAK DAO has changed significantly since its launch. The name is now Innovation City, but Web3, blockchain and digital assets remain central to the free zone.

For a software-led Web3 startup, blockchain developer, gaming project or decentralised technology business, company setup can start from AED 6,600 and standard applications may be completed within 5 to 10 working days.

The key is to classify your activity properly before you apply. A technology licence works for many Web3 businesses. It does not give you automatic permission to operate a crypto exchange, provide custody, manage investments or run regulated payment-token services.

Frequently Asked Questions