UAE Law and Practice Contributed by: Irina Heaver and Zainab Kamran, NeosLegal
5.2 DeFi Structures There are no corporate structures in the UAE specifi- cally designed for DeFi, and no dedicated DeFi entity regime exists. However, two frameworks provide a legal basis for decentralised autonomous organisa- tions. Innovation City (formerly RAK DAO), a free zone in Ras Al Khaimah, introduced the DAO Associations Regime (DARe) in 2024, under which DAOs may be registered as associations with legal personality. In ADGM, the Distributed Ledger Technology Foun- dations Regulations 2023 introduced the DLT Foun- dation, a legal entity with separate legal personality governed by a foundation council of between two and 16 councillors, an optional guardian, and tokenhold- ers who may hold voting and information rights on matters including charter amendments and dissolu- tion. The minimum initial asset value is USD50,000, payable in fiat currency only. A DLT Foundation must at all times maintain a registered office in ADGM and engage a licensed company service provider, subject to a substance-based exemption available where the foundation demonstrates adequate resources, expe- rience and governance in the UAE. Audited annual accounts must be published on the foundation’s web- site and filed with the Registrar within six months of the financial year end. Both regimes provide legal personality and govern- ance frameworks suitable for decentralised projects, though neither confers any regulatory authorisation to conduct regulated virtual asset activities, which remain subject to the applicable licensing require- ments. In practice, it remains common for DeFi projects with a UAE nexus to adopt dual legal structures, combin- ing a UAE entity (typically in a commercial free zone or ADGM) for development company operations, employment and commercial contracting, with an off- shore entity for token issuance or as a protocol-level legal wrapper. Cayman Islands foundation companies and Swiss associations remain the most frequently used offshore vehicles for this purpose, given their established treatment of token issuance, governance flexibility and tax neutrality.
Firms based in ADGM or the DIFC may also be subject to VARA’s Marketing Regulations where their market- ing activities are directed at onshore UAE residents. 4.2 White Labelling The UAE’s virtual asset regulatory frameworks do not expressly address white-label arrangements. In practice, however, both VARA and the CMA permit such structures provided that all applicable regula- tory requirements, including those relating to tech- nology, cybersecurity, conduct of business and AML/ CFT, are met in full. The licensed entity retains regula- tory responsibility for the activities conducted under its licence, and the arrangement must be structured so that oversight and control remain with the licence holder. Firms considering white-label models are advised to engage with the relevant regulator at an early stage to confirm that the proposed structure is acceptable. There is no general prohibition on the use of decen- tralised finance (DeFi) in the UAE. The regulatory frameworks across VARA, the CMA and the financial free zones do not expressly prohibit DeFi activity, and CeFi firms are not prevented from utilising DeFi proto- cols in connection with the products and services they provide, provided they continue to meet all applica- ble regulatory obligations, including those relating to AML/CFT, market conduct and client asset protection. The principal exception is regulated payment servic- es. Federal Decree-Law No 6 of 2025 expanded the CBUAE’s supervisory remit to cover payment activi- ties conducted through decentralised mechanisms, meaning that the use of DeFi protocols in connec- tion with payment services requires compliance with the CBUAE’s regulatory framework in the same man- ner as centralised payment service providers. Firms intending to use DeFi for payment-related activities should assess carefully whether CBUAE authorisation is required before doing so. 5. Decentralised Finance 5.1 Ability to Use DeFi
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