Lakshmi Omanakuttan October 20, 2025October 21, 2025 The metaverse has quickly evolved from a speculative concept into a driver of technological and economic change. It encompasses immersive, three-dimensional environments powered by VR, AR, and Web3 technologies, where individuals and businesses interact and transact across physical and digital spaces. The United Arab Emirates (UAE) has placed itself at the forefront of this shift, using national strategies, regulatory initiatives, and institutional reforms to harness the metaverse for economic diversification, stronger governance, and global competitiveness. The UAE’s Metaverse Vision and Strategy The most prominent articulation of the UAE’s metaverse ambitions is the Dubai Metaverse Strategy, launched in 2022. The strategy sets ambitious economic targets: contributing USD 4 billion to Dubai’s GDP by 2030, creating more than 40,000 virtual jobs, and attracting over 1,000 companies in blockchain and metaverse-related fields. Several public institutions have already established a presence in the metaverse. The Ministry of Economy operates a virtual headquarters, enabling conferences and global stakeholder engagement. The Dubai Electricity and Water Authority (DEWA) created DEWAverse, making it the first government entity in the emirate to provide services through a metaverse platform. In Abu Dhabi, the Abu Dhabi Global Market (ADGM) Arbitration Centre has introduced mediation in the metaverse, providing virtual 3D office spaces for dispute resolution. These initiatives demonstrate that the UAE’s vision is not limited to commercial applications. Rather, it encompasses governance, public services, and legal processes, thereby embedding the metaverse within the broader fabric of national development. Regulatory Developments in the UAE While technological progress has been swift, the regulatory landscape is also evolving. The UAE has introduced or is developing several frameworks relevant to metaverse activities. a) Responsible Metaverse Self-Governance Framework (2024): Launched in 2024, the Responsible Metaverse Self-Governance Framework is the UAE’s most comprehensive initiative regarding the metaverse. It provides a unified set of principles to ensure that participation in virtual spaces is safe, ethical, and accountable, addressing challenges that traditional legal systems cannot fully cover. Its scope extends across the following key areas: online harm and crime prevention, data protection and privacy, sovereignty and cybersecurity, digital well-being, intellectual property protection (notably NFTs and digital goods), and sustainability. To implement these objectives, the Self-Governance Framework sets out guiding principles such as interoperability (movement of users and assets across platforms), privacy by design and default, accountability of developers and operators, fairness and inclusiveness, transparency, and sustainability. Beyond technical compliance, the Self-Governance Framework operates as a normative benchmark. By embedding privacy, security, inclusiveness, and environmental responsibility into the digital ecosystem, the UAE seeks to foster trust, attract investment, and position itself as a global model for metaverse governance. b) Further Metaverse Initiatives in the UAE Alongside the Self-Governance Framework, the UAE and its individual emirates have launched a range of complementary initiatives to foster innovation and capacity-building in immersive technologies. These include the MBZUAI Metaverse Center, a research hub dedicated to AI-driven immersive applications in sectors such as healthcare and education; the DIFC Metaverse Accelerator Programme, which supports start-ups with proof-of-concept opportunities, mentorship, and market access; the Metaverse Alliance, a global network connecting government bodies, technology companies, and entrepreneurs to drive cross-border collaboration, and Metaverse Guidelines that provide a framework for the responsible integration of virtual technologies into government operations, as well as the Metaverse Pioneers Programme, which equips Dubai’s public sector employees with the skills and tools needed to apply metaverse solutions in practice What This Means for Businesses The UAE’s regulatory efforts are not purely theoretical. They have tangible implications for commercial actors. The metaverse provides avenues for virtual real estate transactions, immersive retail and tourism experiences, digital healthcare delivery, and educational platforms. Government services and dispute resolution mechanisms are also being embedded into virtual platforms. These developments create access to new consumer markets, international reach without geographic barriers, and streamlined service delivery. The metaverse can also enhance branding, customer engagement, and operational efficiency. Companies must secure appropriate licensing, assess VAT and corporate tax exposure, implement strong data protection policies, and ensure trademark protection for virtual assets and services. Businesses that adapt early will be best placed to benefit from the UAE’s positioning as a global hub for immersive digital commerce and governance. Key Challenges and Legal Risks Despite the opportunities, several challenges remain unresolved. First, the classification of digital assets under UAE tax law remains uncertain, particularly regarding cryptocurrencies and NFTs. Their treatment as currency, commodity, or digital goods has implications for VAT and corporate tax liability. Second, intellectual property enforcement in virtual spaces is complex, especially where cross-border infringements occur. While UAE law recognizes certain metaverse-related trademarks, such as 3D marks and hologram marks (under Federal Decree Law No. 36 of 2021 on Trademarks), enforcement mechanisms across jurisdictions remain unclear. Third, data protection and cybersecurity present ongoing risks. Virtual environments involve extensive real-time data collection, creating vulnerabilities to misuse, deepfakes, and identity fraud. Finally, there is a risk of regulatory fragmentation between federal law and free zone regimes (such as DIFC and ADGM), potentially creating uncertainty for multinational businesses. Significance of the Responsible Governance Framework The Responsible Metaverse Self-Governance Framework is a landmark initiative. It reflects the UAE’s recognition that immersive technologies require not only innovation but also ethical safeguards. By articulating principles for privacy, security, sustainability, and inclusiveness, the framework seeks to foster trust and transparency in digital interactions. For businesses, the framework offers clarity and predictability. By complying with its standards, companies can build consumer trust, mitigate legal risk, and position themselves as responsible actors in the digital economy. At a broader level, the framework consolidates the UAE’s reputation as a global thought leader in digital governance and sets a precedent that may influence international regulatory trends. The UAE’s approach to the metaverse shows how law and policy can actively shape emerging technologies. Rather than reacting, the country has adopted a forward-looking strategy that combines economic ambition with regulatory innovation. By embedding governance principles into virtual ecosystems, the UAE is not only safeguarding against risks but also creating a trusted environment in which businesses can operate and scale. For the economy, these measures strengthen diversification beyond hydrocarbons, foster new industries in digital commerce and immersive services, and attract global talent and capital. For businesses and investors, this creates opportunities in sectors such as virtual real estate, retail, education, healthcare, and dispute resolution. In effect, the UAE has positioned itself as global benchmark for metaverse governance. Companies that engage with this ecosystem responsibly will not only gain access to new markets and customers but also benefit from operating within one of the world’s most forward-looking digital jurisdictions.
