Marshall Islands DAO LLC vs. RAK DAO (now Innovation City), in short: RAK DAO (RAK Digital Assets Oasis), the Ras Al Khaimah free zone, relaunched as Innovation City in September 2025, and its DAO Association Regulations 2024 are what a decentralized autonomous organization (DAO) forms under there. A DAO Association has its own legal personality, a non-profit purpose and a Council of at least two people. A Marshall Islands DAO LLC is a limited liability company created by the DAO Act, managed by its members or, if it is algorithmically managed, by its smart contract. Innovation City fits a team that wants a base in the United Arab Emirates (UAE), and the DAO LLC fits a team that wants token governance with no council and no UAE-resident manager or zone registered agent.
What is RAK DAO, and what is it called now?
RAK DAO is now Innovation City, a free zone in Ras Al Khaimah. The RAK Media Office announced on 18 September 2025 that RAK Digital Assets Oasis had rebranded and relaunched as Innovation City. The old rakdao.com address now redirects to innovationcity.com.
The DAO Association Regulations 2024 are published on the Innovation City site. They were issued by the Board of Directors of the Innovation City Authority and apply to a DAO Association incorporated in the zone (Reg. 2(1), Reg. 4). The page shows no issue date. Innovation City's Legal Entity Types page lists a company limited by shares, a company limited by guarantee and a branch, and does not list a DAO Association, so confirm with the zone that DAO Association registrations are open before you plan around them.
How do the two compare at a glance?
Here are the main points side by side.
- Legal basis: the Marshall Islands DAO Act 2022, amended 2023, against the Innovation City DAO Association Regulations 2024.
- Governance: members or a smart contract manage an RMI DAO LLC; an Innovation City DAO Association has a Council of at least two and 2 to 10 Founding Members at incorporation who give Guarantees.
- Local presence: a registered agent in the Marshall Islands; a UAE-resident Manager or a zone Registered Agent in Innovation City (Reg. 30(1)).
- Purpose: for-profit or nonprofit in the Marshall Islands; a non-profit purpose in Innovation City (Reg. 13).
- Tokens: securities carve-outs in the DAO Act; a No Objection Certificate from the Registrar in Innovation City (Reg. 91).
- Tax: no RMI rate is stated here; in the UAE, a Qualifying Free Zone Person pays 0% on Qualifying Income and 9% on other taxable income, and we found no tax statement specific to DAO Associations.
- Cost and timeline: $9,500 standard, as low as $3,000, normally 21 to 28 days; we found no current DAO fee schedule or timeline on Innovation City's official pages.
How do the legal basis and entity form compare?
Both give a DAO its own legal entity, built on different statutes and different authorities.
The Republic of the Marshall Islands (RMI) passed its DAO Act in 2022 and amended it in 2023, and the Cabinet approved the DAO Regulations on 13 June 2024. MIDAO operates the exclusive public-private partnership, signed in 2022, through which DAO LLCs register, and 300+ DAOs and web3 projects have signed up. A DAO LLC may be formed "for any lawful purpose, regardless of whether for profit" (Marshall Islands Revised Code (MIRC) Title 52, §705(3)) and can also register as a nonprofit (§705(4)).
In Innovation City, a DAO Association has a separate legal personality from its Members and Token Holders and can enter into obligations in its own name (Reg. 8(3)).
A DAO Association may be incorporated only if its Memorandum of Association or Constitution states a purpose that does not seek to distribute profit to Members or Officers, prohibits dividends to Token Holders, and requires assets that would have been paid out as dividends to be reinvested toward that purpose (Reg. 13). The RMI DAO LLC can be for-profit or nonprofit.
How do governance and local presence compare?
Innovation City requires a Council and, under Reg. 30(1), a Manager or zone Registered Agent. The RMI DAO LLC requires a registered agent but no council.
An Innovation City DAO Association needs between 2 and 10 Founding Members at incorporation, and no more than 10 afterwards (Reg. 37(4)). Each gives a Guarantee, an undertaking to contribute up to a specified amount if the DAO Association is liquidated with debts it cannot pay (Reg. 37(2), (3)).
The Council is the executive and supervisory body, must have at least two Council Members at all times, and its members must be natural persons (Reg. 39(1), (4), (8)).
On local presence, the Council must ensure a Manager or a Registered Agent is appointed at all times (Reg. 30(1)). A Manager must be a UAE resident (Reg. 31(4)(d)), and a Registered Agent must keep a physical registered office in the zone (Reg. 31(2)(b)). Reg. 33(2) also contemplates a DAO Association with neither appointed, and the Startup designation criteria are left to implementing regulations (Reg. 15(3)), so ask the zone in writing what applies to your designation.
An RMI DAO LLC can have one or more members (52 MIRC §705(1)). The DAO Act vests management in the members if the company is member managed, or in the smart contract if it is algorithmically managed, unless the formation documents say otherwise (DAO Act §708). Its operating agreement can reference smart contracts and token voting, and a blockchain used to govern or track members must be publicly accessible (DAO Regulations §3(1)). The local requirement is a registered agent, and MIDAO acts as that agent.
How do token issuance and regulators compare?
Innovation City adds zone filings and an approval step for tokens, and a DAO Association may not carry on any activity that a UAE financial services regulator regulates (Reg. 11(2)).
A DAO Association must obtain a No Objection Certificate from the Registrar before it issues a new class of Token, and before it lists a Token on any market or exchange regulated by a financial services regulator (Reg. 91(1)). Before issuing a new class of Token, it must also give the Registrar a white paper or equivalent document, a legal opinion that the Token and the DAO Association's activities comply with UAE law and that the Token is not a security token under UAE federal law, and a cybersecurity audit of the relevant smart contracts (Reg. 10).
At federal level, a decree-law renamed the Securities and Commodities Authority (SCA) as the Capital Market Authority (CMA), effective 1 January 2026, according to the CMA's own page on the new law. Innovation City's home page says any activity within the regulatory mandate must be submitted to the CMA for supervision. On 13 April 2026 the CMA issued a Virtual Assets Framework with five modules and eight regulated activities. Whether CMA licensing applies depends on what a project actually does. The announcement gives no guidance specific to DAO Associations, and the DAO Association Regulations still cite an SCA decision in their definitions.
In the Marshall Islands, the Securities and Investment Act does not apply to a DAO LLC to the extent that it is not, directly or indirectly, issuing, selling, exchanging or transferring digital securities to RMI residents, and a governance token conferring no economic rights is not deemed a security (52 MIRC §703(2)(a), (c)). Securities law where buyers live still applies. A DAO LLC that is a virtual asset service provider must comply with the Banking Act 1987 (§715(2)).
How do KYC and AML compare?
Both regimes screen the people behind the entity.
In Innovation City, a Guarantee Member must complete all applicable AML/CFT (anti-money laundering and countering the financing of terrorism) and KYC (know your customer) checks required under UAE law (Reg. 37(7)(c)).
In the Marshall Islands, beneficial owners are reported at formation and with each annual filing, with passport and address verification through the registered agent (52 MIRC §712; DAO Regulations §8). MIDAO runs KYC and KYB (know your business) checks. The 25% governance-rights figure is the general benchmark for who completes KYC, and MIDAO's guidance sets out the detail.
How do taxes compare?
Neither regime can be reduced to one rate, and we found no tax statement from Innovation City specific to DAO Associations.
The UAE Ministry of Finance says a free zone person that qualifies as a Qualifying Free Zone Person can benefit from a corporate tax rate of 0% on its Qualifying Income (Ministry of Finance, corporate tax). The Federal Tax Authority adds that a Qualifying Free Zone Person pays 9% on all its other taxable income and does not get the 0% rate on the first AED 375,000 (UAE dirham) of income (FTA free zone bulletin). Under the ordinary regime, the UAE government portal sets 0% up to AED 375,000 and 9% above it. The DAO Association Regulations do not mention tax, so whether a DAO Association qualifies depends on its own facts and on advice.
In the Marshall Islands, the DAO Act places DAO LLCs outside the Income Tax Act except for a gross revenue tax on for-profit DAO LLCs (52 MIRC §703(3)). The Net Profit Tax Act 2025 changes the RMI tax system for tax years beginning on or after 1 October 2026 and does not mention DAO LLCs, so confirm the current treatment with MIDAO before relying on a rate.
How do costs and timelines compare?
The RMI DAO LLC has published prices and a normal timeline. For DAO Associations, we could not find either on Innovation City's official pages.
For an RMI DAO LLC, MIDAO's setup price is $9,500 standard and as low as $3,000 for projects with under $250k in treasury and funding. The annual fee is $2,000 to $5,000, tiered by treasury and funding size. Registration is normally processed within 21 to 28 days.
We could not find a current fee schedule for DAO Associations on Innovation City's official pages (checked 14 November 2026). Its regulations leave fees to an implementing regulation issued by the Registrar (Annex 1). The site's company packages start from AED 6,600 a year (Idea, a November limited-time offer with no visa) and AED 13,200 a year (Seed, with one visa), as checked on 14 November 2026, and extra visas and premium office space are upgradeable extras. These are general company packages, not DAO Association fees. We found no published processing time for a DAO Association either, so ask Innovation City for both in writing.
What about banking and residency visas?
Innovation City offers both through company setup, but neither is documented for DAO Associations.
Its bank page describes account applications moving to a UAE banking partner, subject to the partner's eligibility, KYC, compliance checks and final approval. Visas are included at package level, and the Idea package includes none.
Which should you choose?
Choose by what the project needs, because each fits a different use case.
Innovation City fits better when the team wants a UAE base, visas through a company package, UAE banking partners and access to the MENA (Middle East and North Africa) market.
The RMI DAO LLC fits better when the project wants no council requirement, algorithmic management through a smart contract, no resident manager or zone office, and a choice between a for-profit and a nonprofit structure. It is less suited to a team that needs a local presence in a major financial centre.
For related comparisons, see our post on the Marshall Islands DAO LLC vs. UAE ADGM (Abu Dhabi Global Market), our Web3 jurisdiction guide and our ranked guide to crypto-friendly jurisdictions.
This post is general information, not legal or tax advice. Take advice on your own facts before choosing a jurisdiction.
Ready to incorporate your project as a Marshall Islands DAO LLC?
Start your Marshall Islands DAO LLC registration with MIDAO, the exclusive public-private partnership for RMI DAO LLCs. Applications are normally processed within 21 to 28 days.
Frequently Asked Questions
Is RAK DAO the same as Innovation City?
The RAK Media Office announced on 18 September 2025 that the zone had rebranded and relaunched as Innovation City, and rakdao.com redirects to innovationcity.com. The DAO Association Regulations 2024 are published on the Innovation City site.
Does Innovation City publish DAO Association fees?
Not on the official pages we checked on 14 November 2026. The regulations leave fees to an implementing regulation issued by the Registrar, and the AED 6,600 and AED 13,200 figures on the site are for general company packages. Ask Innovation City for the current DAO Association fees in writing.
Does a DAO Association in Innovation City need a UAE resident?
Under Reg. 30(1), the Council must keep a Manager or a Registered Agent appointed. A Manager must be a UAE resident and a Registered Agent needs a zone office (Reg. 31), though Reg. 33(2) contemplates a DAO Association with neither, so ask the zone in writing what applies to your designation.
How long does a Marshall Islands DAO LLC take to register?
Registration is normally processed within 21 to 28 days. We could not find a published timeline for DAO Associations in Innovation City.