Legal Structuring for Tokenized Assets
A practical way to unlock liquidity. We create the legal structure that makes asset tokenization secure and reliable.
Asset tokenization converts ownership rights in physical assets—real estate, infrastructure, private equity holdings—into digital tokens that can be traded, transferred, and managed through secure blockchain platforms. For asset owners, this creates liquidity and access to a broader investor base. For investors, it provides fractional ownership opportunities in previously inaccessible assets.
PROLEGAL KABAYAN structures the legal framework for tokenized assets, ensuring digital tokens represent legitimate ownership rights, comply with securities regulations, and provide enforceable claims to underlying assets. Our practice combines traditional asset law with blockchain-specific regulatory requirements across multiple jurisdictions.
Understanding Asset Tokenization
Asset tokenization creates digital representations of ownership rights in physical assets. These digital tokens are recorded on blockchain platforms and can be transferred, traded, or held like traditional securities—but with greater efficiency, transparency, and accessibility.
How tokenization works:
A physical asset (real estate, infrastructure, private equity) is held by a legal entity, typically a Special Purpose Vehicle. This entity issues digital tokens representing fractional ownership stakes, revenue shares, or other rights in the underlying asset. Token holders receive legally enforceable claims to income, appreciation, and eventual asset liquidation.
Regulatory treatment:
Tokenized assets typically constitute securities under UAE and international law. This classification triggers securities regulations, disclosure requirements, and investor protection standards. Proper legal structuring ensures tokens represent legitimate ownership rights that withstand regulatory scrutiny and provide investors with enforceable claims.
Why Consider Asset Tokenization
Traditional asset ownership faces inherent limitations: illiquidity, high minimum investment thresholds, geographic restrictions, and complex transfer processes. Tokenization addresses these constraints by creating digital representations of ownership that can be transferred instantly, divided into smaller units, and accessed by international investors through regulated platforms.
Benefits for asset owners:
- Enhanced liquidity without selling underlying assets
- Broader international investor access
- Capital efficiency while maintaining operational control
- Reduced transaction costs
- Transparent blockchain-based ownership records
Benefits for investors:
- Fractional ownership with lower capital requirements
- Portfolio diversification across geographies
- Liquidity options through secondary markets
- Transparent valuation and ownership structure
Tokenization is not appropriate for every asset. We assess whether tokenization aligns with client goals, evaluate regulatory feasibility, and structure projects delivering measurable advantages over traditional ownership models.
Real Estate Tokenization
Property owners can tokenize residential developments, commercial buildings, hospitality assets, and land holdings to access capital, provide liquidity to existing investors, or create new investment products.
Our services:
- Legal entity structuring with Special Purpose Vehicles
- Token classification under applicable regulations
- Ownership rights definition including dividend distribution and voting rights
- Title and transfer compliance with UAE property law
- Investor documentation meeting securities law standards
We structure tokenized real estate projects across multiple jurisdictions, coordinating with local counsel to ensure compliance with property transfer regulations, securities laws, and tax frameworks.
Infrastructure & Commodity Tokenization
Beyond real estate, tokenization applies to infrastructure projects, natural resource holdings, equipment portfolios, and other income-generating assets.
Our services:
- Asset-backed token design
- Due diligence and ownership verification
- Regulatory classification analysis
- Cross-border structuring
- Ongoing compliance and governance frameworks
Our approach ensures tokens are backed by verified assets, ownership claims are legally enforceable, and investors receive accurate information about underlying asset performance and risks.
Regulatory Compliance & Investor Protection
Tokenized assets often constitute securities under UAE and international regulations, triggering disclosure obligations, investor protection requirements, and ongoing compliance responsibilities.
Our services:
- Securities law analysis under SCA, VARA, and international frameworks
- Licensing and authorization
- KYC/AML implementation meeting UAE Central Bank and FATF standards
- Disclosure documentation and periodic reporting
- Governance and oversight structures
We emphasize regulatory clarity over speed to market. Each tokenization project is designed to withstand regulatory scrutiny and provide investors with confidence in ownership legitimacy.
Legal Documentation & Token Structure
Documentation services:
- Entity formation in optimal jurisdictions
- Shareholder and subscription agreements
- Token terms and conditions
- Custodian and platform agreements
- Smart contract review coordinating with technical teams
Our documentation process ensures token holders possess legally enforceable rights, asset ownership remains clear and unencumbered, and all parties understand their obligations and remedies.
Implementation Process
Assessment & Structuring
- Asset evaluation and ownership verification
- Business model analysis
- Regulatory classification
- Jurisdictional selection
Legal Documentation
- Entity formation
- Token terms and investor agreements
- Offering memorandum
- Platform contracts
Regulatory Compliance
- Licensing applications
- KYC/AML implementation
- Smart contract legal review
- Audit coordination
Launch & Ongoing Management
- Token issuance on licensed platform
- Investor onboarding
- Ongoing compliance and reporting
- Secondary market coordination
Why PROLEGAL KABAYAN for Asset Tokenization
- 25+ years of international legal and corporate experience — Practice spanning traditional asset law, securities regulation, and blockchain technology across the UAE, Europe, Asia, and the Middle East.
- Multi-jurisdictional structuring capability — Establishing entities, coordinating compliance, and structuring transactions across multiple legal systems.
- Regulatory-first approach — Every tokenization project built on defensible legal foundations satisfying regulatory requirements and protecting investor interests.
- Licensed and regulated practice — UAE Free Zone licensed Corporate Services Provider, Legal Consultancy, and E-Commerce Specialist operating under professional oversight.
- Technical coordination — Working with blockchain developers, audit firms, and licensed platforms to ensure legal structures align with technical implementation.
Multi-Jurisdictional Capability
UAE structuring: Mainland and Free Zone entities with appropriate licensing
European entities: Switzerland, Liechtenstein, and other jurisdictions with favorable digital asset frameworks
Asian coordination: Working with counsel in Singapore, Hong Kong, and regional hubs
Cross-border tax planning: Optimizing entity structures to minimize withholding taxes
We act as lead counsel for tokenization projects, coordinating with local legal advisors to ensure seamless compliance across all relevant jurisdictions.