According to CoinDesk: Marking a significant step towards becoming a global nucleus for decentralized autonomous organizations (DAOs), the Marshall Islands has enhanced its existing law that recognizes DAOs as legal entities.
Last week, the parliament of the Republic of the Marshall Islands advanced its DAO regulation by amending the Decentralized Autonomous Organization Act of 2023. According to Member of Parliament David Paul and Adam Miller, CEO & Co-Founder of MIDAO, who authored the legislative modifications, the new legislation amplifies the legal recognition of DAOs and positions the country as a global frontrunner in the advanced regulation of DAOs.
MIDAO is a public-private partnership entity between the Marshall Islands and MIDAO Directory Services, a Marshall Islands corporation, and acts as the DAOs and Web 3 registrar's office extension.
Miller claimed that the updated Act is the "most comprehensive law for DAOs globally," serving as a "blueprint for the rest of the world" on DAO regulations. In 2022, the Marshall Islands became the forerunner in recognizing DAOs as legal entities and has since incorporated nearly 100 DAOs under its original act of 2021.
Under the revised law, DAOs can benefit from faster registration times, capped at 30 days as opposed to the previous 30-60 days range. Additional measures exempt DAOs from being held accountable for the use of any open-source software they might have created. Furthermore, the Act stipulates that most governance tokens will not be classified as securities unless they offer economic rights distinct from potential financial gain.
To establish a DAO within the country, one needs to visit MIDAO.org and hire MIDAO as a registered agent. The Act was also ground-breaking in legitimizing Series DAO LLCs, often used to segregate assets and liabilities in sub-DAO structures.
The Marshall Islands' unique status allows it to make such advancements without being subject to U.S. federal laws while maintaining access to U.S. services such as the U.S. Postal Services, Federal Aviation Administration (FAA), and the U.S Military.