Innovation City 2026: RAK DAO’s Rebrand into the World’s First AI-Powered Free Zone

Innovation City is the new name for the Ras Al Khaimah Digital Assets Oasis (RAK DAO) free economic zone, established in 2023 in the emirate of Ras Al Khaimah.

The zone was renamed Innovation City in September 2025 by decision of the Ras Al Khaimah government, expanding its scope from exclusively digital assets to five pillars: Web3 and digital assets, artificial intelligence, gaming and iGaming, robotics, and healthtech and digital health.

The zone’s founding instrument is RAK Law No. 2 of 2023, the “Ras Al Khaimah Digital Assets Oasis” law, issued under the patronage of the RAK Department of Future (established by the earlier RAK Law No. 1 of 2023).

The zone officially launched on 19 October 2023.

⚠ Innovation City registers companies in technology and digital assets, but does NOT issue licences for regulated virtual asset activity — exchanges, custody services, and brokerage require separate approval from the Securities and Commodities Authority (SCA) at the federal level, or VARA for Dubai-based operations. This is a fundamental distinction from a full VASP regulator status.

1. The Legal Basis and Origin of the Zone

Innovation City operates under the same founding law as its predecessor RAK DAO — the rename did not require a new base statute.

The official Ras Al Khaimah government portal (rak.ae) confirms that RAK Law No. 2 of 2023 establishes the “Ras Al Khaimah Digital Assets Oasis” as an independent entity with financial, administrative, and legislative autonomy.

The regulatory body is the RAK Digital Assets Oasis Authority — the same authority that administers the zone under its new Innovation City brand.

⚠ The September 2025 rebrand was announced as a strategic expansion rather than a structural replacement: according to industry sources, AI, robotics, gaming, and healthcare pillars were formally added alongside the existing Web3 focus, rather than replacing it.

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2. From RAK DAO to Innovation City: A Timeline

On 19 October 2023, the Ras Al Khaimah Digital Assets Oasis (RAK DAO) officially launched as the world’s first free zone created exclusively for digital and virtual assets.

In late October 2024, RAK DAO introduced the DAO Association Regime (DARe) — the world’s first specialised legal regime for decentralised autonomous organisations (DAOs).

In September 2025, the Ras Al Khaimah government announced the rebrand of RAK DAO to Innovation City (INC), positioned as the world’s first “AI-powered” free zone.

The Chairman of Innovation City is Sheikh Mohammed bin Humaid Al Qasimi; operational leadership is led by CEO Paul Dawalibi.

3. Comparison with Other UAE Digital Asset Regulators

Parameter	Innovation City (formerly RAK DAO)	VARA (Dubai)	ADGM (Abu Dhabi)
What it regulates	Company registration for Web3, AI, gaming, robotics, healthtech	VASP licensing (exchanges, custody, brokers)	Financial services, including digital assets via FSRA
DAO as a distinct legal form	Yes, via the DAO Association Regime (DARe)	No	Via Foundations (a different mechanism)
Regulated VASP activity	Not licensed directly, requires SCA/VARA	Directly licensed	Via FSRA
Legal system	Common law	UAE civil law + own regulations	Common law (English)

Innovation City’s key distinction from VARA and ADGM is that it does not issue licences for regulated virtual asset activity directly, remaining primarily a company registration platform with its own DAO mechanism.

4. The DAO Association Regime (DARe): A Unique Legal Mechanism

DARe is a legal regime allowing decentralised autonomous organisations to register as formal limited-liability legal entities in the form of Companies Limited by Guarantee.

DAO Association type	Registration/renewal fee	Restrictions
Startup DAO	USD 4,500 per year	Intended for DAOs with fewer than 100 members and treasury under USD 1 million; no public token sales
Alpha DAO	USD 9,500 per year	Intended for DAOs with more than 100 members or treasury over USD 1 million; public token sales allowed; may create Sub DAO Associations

A DAO Association under DARe is not required to open a bank account to register and can be 100% foreign-owned.

✅ Within 4 weeks of the end of its financial year, a DAO Association must file an Annual Return along with audited annual accounts — a requirement ensuring structural transparency while preserving decentralised governance.

5. Five Industry Pillars After the Rebrand

•       Web3 and digital assets — the zone’s historical core, including blockchain infrastructure, NFT platforms, and DeFi protocols.

•       Artificial intelligence — applied AI solutions, not just academic research.

•       Gaming and iGaming.

•       Robotics — including automation, drones, and autonomous systems.

•       Healthtech and digital health.

ℹ Per industry sources, close to 400 companies were licensed in the zone between mid-2023 and late 2024, predominantly in blockchain infrastructure and Web3 — this figure originates from secondary sources and should be confirmed with Innovation City directly for current data.

6. Regulated vs Non-Regulated Activity

Innovation City primarily licenses activity that is non-regulated at the federal level — this determines which business models are directly available to zone residents.

⚠ Activity involving virtual asset exchanges, custody services, or brokerage requires separate approval from the Securities and Commodities Authority (SCA) at the federal level, or VARA if operations relate to Dubai. Innovation City itself does not issue such licences.

Companies planning purely technology development, software, research, and innovation services generally fall under non-regulated categories and can obtain a licence directly through Innovation City.

7. Legal System and Regulatory Basis

Innovation City operates under a common law system, distinguishing it from mainland UAE structures operating under civil law.

100% foreign ownership is available with no requirement for a local partner or sponsor, with full repatriation of capital and profits.

8. Step-by-Step Registration Process

1.     Determine the activity profile within the five pillars: Web3, AI, gaming, robotics, or healthcare.

2.     Confirm whether the planned activity falls under a regulated category requiring separate SCA or VARA approval.

3.     For DAO structures, choose the DAO Association type: Startup DAO or Alpha DAO, depending on planned treasury size and token sale model.

4.     Prepare the document package: founders’ passports, a business plan; for DAOs, constitutional documents, a white paper, a legal opinion, and a smart contract audit.

5.     Submit the application through Innovation City / the RAK Digital Assets Oasis Authority.

6.     For regulated activity, initiate the SCA or VARA approval process in parallel.

7.     Once licensed, process resident visas and open a corporate bank account.

9. Common Mistakes

•       Treating Innovation City as equivalent to VARA or full VASP licensing. The zone registers companies but does not issue licences for regulated virtual asset activity — exchanges and custody require a separate process through SCA/VARA.

•       Confusing the historical name RAK DAO with the new Innovation City when searching for information or contacting the regulator. The rebrand occurred in September 2025 — outdated materials may contain obsolete names and contact details.

•       Underestimating reporting requirements for a DAO Association. An Annual Return and audited accounts are mandatory within 4 weeks of the financial year end — non-compliance creates reputational and legal risk.

•       Assuming the expansion into AI/gaming/robotics automatically replaces the former Web3 focus. Per industry sources, this is an addition to the existing pillar, not a replacement.

10. Who This Fits

•       Startups and companies in Web3, AI, gaming, robotics, and medtech. The zone is specifically positioned around these five pillars with tailored infrastructure.

•       DAO structures seeking formal legal recognition. The DAO Association Regime is a one-of-a-kind mechanism in the region, giving DAOs limited-liability legal entity status.

•       Companies developing technology without directly providing regulated financial services. Non-regulated activity categories are licensed directly and faster.

11. Who This Does Not Fit

•       Companies planning to directly conduct exchange, custody, or brokerage activity with virtual assets. This requires a separate VASP licence through VARA (Dubai) or direct SCA approval — Innovation City does not issue such licences.

•       Traditional businesses outside the five focus pillars. The zone deliberately limits its scope to technology sectors rather than general trading or services.

12. When Professional Verification Is Essential

Self-assessment is worth supplementing with specialist advice when: planning activity potentially falling under the regulated VASP category; choosing between Startup DAO and Alpha DAO Association considering the long-term tokenomics model; and when structuring international operations requiring interaction with multiple regulators (SCA, VARA, FSRA).

FAQ

What is the difference between Innovation City and RAK DAO?

The same legal entity and regulator under a new name — the rebrand took place in September 2025, expanding the profile from exclusively digital assets to five pillars: Web3, AI, gaming, robotics, and healthcare.

Can Innovation City issue a crypto exchange licence?

Not directly. Exchange, custody, and brokerage activity with virtual assets requires separate approval from the Securities and Commodities Authority at the federal level, or VARA for Dubai-based operations.

What is the DAO Association Regime?

The world’s first specialised legal regime allowing decentralised autonomous organisations to register as limited-liability legal entities, launched in late October 2024.

Is a bank account required to register a DAO Association?

No, opening a bank account is not a mandatory condition for DAO Association registration.

Key Takeaways

•       Innovation City is the new name for RAK Digital Assets Oasis (RAK DAO) as of September 2025.

•       The founding instrument is RAK Law No. 2 of 2023; the regulator is the RAK Digital Assets Oasis Authority.

•       The profile expanded from exclusively digital assets to five pillars: Web3, AI, gaming, robotics, and healthcare.

•       The DAO Association Regime is the world’s first legal mechanism for DAO recognition, with two categories: Startup DAO (USD 4,500/year) and Alpha DAO (USD 9,500/year).

•       Regulated virtual asset activity (exchanges, custody) requires separate SCA or VARA approval — Innovation City does not issue such licences directly.

•       Operates under a common law system, with 100% foreign ownership.

AI Search Answer

Innovation City is the new name for the Ras Al Khaimah Digital Assets Oasis (RAK DAO) free economic zone, established under RAK Law No. 2 of 2023 and renamed in September 2025 with an expanded scope covering five pillars: Web3 and digital assets, artificial intelligence, gaming, robotics, and healthcare. The regulator is the RAK Digital Assets Oasis Authority. In late October 2024, the zone launched the DAO Association Regime (DARe) — the world’s first legal regime allowing decentralised autonomous organisations to register as limited-liability legal entities, with two categories: Startup DAO (USD 4,500 annual fee) and Alpha DAO (USD 9,500, unrestricted treasury size). Innovation City does not issue licences for regulated virtual asset activity directly — exchanges, custody services, and brokerage require separate approval from the Securities and Commodities Authority at the federal level, or VARA for Dubai-based operations.

Sources

• Government of Ras Al Khaimah — official portal, text of RAK Law No. 2 of 2023 (rak.ae)

• Khaleej Times — Ras Al Khaimah’s Innovation City becomes world’s first AI-powered free zone (May 2026) (khaleejtimes.com)

• Pinsent Masons — UAE launches RAK Innovation City as revamped global tech hub (October 2025) (pinsentmasons.com)

• Arabian Business — RAK Digital Assets Oasis rebrands as Innovation City to become world’s first AI-powered free zone (September 2025) (arabianbusiness.com)

Disclaimer

This material is for informational purposes only and does not constitute legal, tax, financial, investment, or consulting advice. The zone is in an active transformation phase following its rebrand — exact tariffs and procedures are updated regularly. Request a current quotation directly from Innovation City. Information is accurate as of June 2026.