The United Arab Emirates is developing by leaps and bounds. The country is gradually building its economy without oil. In such conditions, creating a business in Ras Al Khaimah has become not only profitable, but also convenient. It should be noted that the emirate itself is interested in attracting new businesses, so company registration in Ras Al Khaimah is not such a complicated process as it might seem at first glance. The main thing is to study all the rules and comply with the laws of the country.
Ras Al Khaimah, one of the northernmost emirates, was founded in 1869. This unique place with beautiful date palm plantations, majestic mountains and pristine beaches is located on the border with Oman, just an hour’s drive from the pearl of the Middle East — the city of Dubai. This oasis on the shores of the Persian Gulf has become a manufacturing center in the UAE in a short time. A favorable tax climate for foreign investors, where there is no tax on profits, value added, and income from individuals, provides foreign investors with unlimited opportunities to withdraw profits and assets, attracting more and more new depositors.
The United Arab Emirates is struggling to get off the «oil needle» and diversify the economy. But the country, in which back in the 1970s half of the population could not read, critically lacks its own technologies and talents. Therefore, the government has created heavenly conditions for foreign companies and startups that are ready to relocate.
The Emirates is a quasi—offshore, there are practically no taxes here. In recent decades, the country has used oil windfalls very effectively, and has built a transparent and open bureaucratic system with zero corruption. In addition, the richest people in the world live here and the largest investment funds operate in terms of capital.
Thanks to these conditions, an ideal environment has been formed in the UAE for the development of a business focused on the international market. The country is perceived primarily as a springboard for business development in the Persian Gulf countries, Africa, India and Pakistan. Talents and investors from all over the world come here — 85% of the population are migrants and expats. It hosts many world-class events, assemblies and exhibitions.
Among the advantages of registering a company in Ras Al Khaimah, it should be highlighted:
- stable political situation;
- relatively inexpensive company registration procedure;
- favorable climate;
- registration of companies with 100% participation of non-residents;
- stable national currency;
- availability of a free trade zone;
- low-cost labor and energy resources;
- the emirate has the highest security rating;
- lack of annual audit requirements;
- lack of requirements for the minimum amount of authorized capital;
- lack of currency control;
- favorable geographical location;
- various programs to support small and medium-sized businesses;
- a rapidly developing economy.
Despite the advantages provided for business development in this jurisdiction, each emirate and each free zone of the UAE have their own laws that regulate the procedure for establishing a company.
Various types of businesses can be opened in free zones. It is important to keep in mind that the process of registration and obtaining a license will have some differences. If you plan to trade, then you should open a commercial type. If you are going to conduct scientific activities, you will need to open a professional business. For the production of products, you need to think about opening a production type of company.
RAK Free Zone
There are free zones in the emirate. Not only the laws of the state apply here, but also some other legal rules. The management is carried out by the administration of a specific zone. If the business owner does not have a special license, then he has the right to operate only on the territory of this zone. But the licensing and registration process is simpler and faster.
Ras Al Khaimah Investment Authority Free Zone (RAKIA)
The RAKIA is famous for its natural beauty, an hour’s drive from Dubai. On its territory there are industrial parks Al Khail and Al Hamra, the total area of which is 3000 m2. There are three international airports, three seaports and two expressways nearby.
To date, more than 7.5 thousand companies have been registered in the RAKIA FEZ. Their main activities are consulting, metals, petrochemicals, food processing, plastics, trade, electric power, automotive, construction materials.
Types of companies that can be registered in RAKIA: subsidiary, branch, new company (FZ LLC or FZE).
RAK Maritime City Free Zone
The free zone «RAK Maritime City» was founded in 2009. This zone is located in the area of a deep-water bay, so even large ships with cargo can enter there.
RAK Media Free Zone (RMFZ)
Those wishing to open a company in the RU Media Free Zone (RMFZ) are attracted to this zone due to its desire to provide world-class facilities. This zone will be interesting for those who want to register a company in the UAE free zone in the media industry.
RAK Economic Zone (RAKEZ)
This is one of the largest zones in the emirate. It includes business, industrial, technical, academic, aviation parks. In addition, there is a separate area for media.
One of the advantages of the zone is that the business owner receives a dual license, which gives the right to conduct business not only in the zone, but also in other parts of the country.
The opening of an offshore company in Ras Al Khaimah takes place in the form of the registration of the IBC company in Ras Al Khaimah. At the time of writing, there are about 1,900 offshore companies operating in this emirate.
RAK Mainland company
Firstly, you must have at least 1 resident director. He should own most of the corporate rights. During the establishment of the mainland company in Ras Al Khaimah, the company can have an unlimited number of activities. There are no obligations to conduct annual audited verification and submit reports.
Types of legal entities in RAK
Before creating a company in RAK, you need to choose the type of commercial structure for your company. Among the legal forms offered by Ras Al Khaimah to interested entrepreneurs, several options are available.
The form of an individual entrepreneur is intended for individuals who want to make all decisions related to their business independently.
Limited Liability Company
A company can be classified as an LLC in Ras Al Khaimah if it has at least 1 director and 1 founder. But the company cannot have more than 50 people. One of the mandatory conditions for registration is the opening of a bank account under the authorized capital, which cannot be less than 1,000 AED (224 EUR).
Joint Venture Company
This is a type of company that works after the conclusion of an agreement between several partners. Such a company does not require a license, and the cooperation agreement may not be published.
Public/Private Shareholding Company
A similar type of company can be opened if it includes at least 10 participants. But it is required to obtain a permit, which is issued by the Department of Economy and Trade. A private company must have at least 3 owners of shares.
Free Zone Company
You can organize a business in Ras Al Khaimah in about a week. Your personal visit will be required, but you don’t have to get to Ras Al Khaimah — it’s enough to visit the zone’s representative office in Dubai.
RAKEZ also has international offices in India, Turkey and Germany where you can apply.
The register of Ras Al Khaimah companies is not open, it is confidential.
Free Zone Establishment
This type of company differs in that it can have only one shareholder.
International Business Company
This type of company does not require a certain number of participants and annual reporting. Only the name and date of incorporation are indicated in the register.
When applying for a state license to work in the Ras Al Khaimah Free Economic Zone, it is important to consider the following aspects:
- The state license is issued for a certain period, which means that it is allowed to carry out entrepreneurial activity only for the period specified in the license. It is necessary to extend it for the next year;
- The validity period of the state license is one year from the date of its issuance. The business license is renewed annually;
- A prerequisite for the renewal of the state license is the provision of appropriate financial and audit reports;
- The rates and tariffs applicable on the territory of a certain economic zone may change, as companies are informed additionally;
- If the applicant registering a company in the Emirates has received a resident visa through another legal entity, he must provide the written consent of the sponsor to register the company;
- If you are planning to engage in consulting activities, be prepared that you will be required to confirm your qualifications and professional skills in the relevant industry;
- The implementation of activities that have some specifics, for example, medicine, involves obtaining the appropriate permission from the state authorities of the Emirate.
General trading license
This form is issued by businesses that are engaged in various types of trade and trade-related activities.
This type is issued if the business involves the use of a narrow specialty. The directions may be different, but the license is issued of the same type.
This type enables the manufacture, packaging and other types of activities necessary for the production of goods.
How to register a business in Ras Al Khaimah?
Company registration takes place in several stages. The procedure is not so complicated, but you should follow all the steps and rules exactly so that the registration is successful.
Decide on a business activity
It is necessary to determine what kind of activity the company will be engaged in. This is not just an important decision; the order depends on it.
Determine the legal form of the business
Companies that can be registered are divided into local (can operate on the territory of the Emirates) and offshore (cannot operate on the territory of the Emirates).
The most popular organizational and legal forms of local companies in the UAE are presented below:
- Limited Liability Company (Limited Liability Company). The members of the company do not bear personal property responsibility for the obligations of the company, but are responsible for them only within the limits of the contribution made. In the case of registration of such a company, at least 51% of the shares must belong to shareholders-citizens of the UAE.
- A company registered in the free zone (FEZ) UAE (Free Zone Company). Such a company has some specifics, which depends on which particular Season it is registered in. Also, companies in the FEZ can be created with absolute foreign participation.
If we talk about offshore companies, they must operate outside the UAE and are most often holding companies.
Finalize the Jurisdiction
At this stage, a package of all the documents of the company that are necessary for its full-fledged activity is being prepared.
The registrar checks all documents and the fulfillment of all conditions, and only then can we proceed to more detailed registration procedures.
Register your trade name
Registration of an offshore company in Ras Al Khaimah usually begins with the selection of a suitable company name. The name can include no more than one hundred characters, but all characters must be allowed. If the registrar decides that the name contains prohibited or offensive symbols, such a name will be rejected.
Apply and submit
After receiving approval from the regulator to open a company in Ras Al Khaimah, the charter and memorandum of the company are prepared and notarized, the applicant signs all the necessary documents, which are submitted for consideration to the local regulator (Department of Economic Development).
The Department of Economic Development is responsible for issuing all business licenses in the Emirate. In some cases, permission from other government agencies is required, but this is only in relation to certain types of activities.
In total, the department can get:
- Commercial license to carry out activities in the field of trade;
- Industrial license;
- Professional license for activities in a narrow field.
For those who want to register a company with 100% foreign capital, it is necessary to open an office on the territory of the free economic zone.
In the Ras Al Khaimah Free Economic Zone, you can establish any type of company (either a subsidiary or an independent organization) with one or more shareholders. Moreover, your office does not necessarily have to be located on the territory: the offshore type of company is allowed by law.
Why invest in Ras Al Khaimah?
For foreign and local investors, the Emirate of Ras Al Khaimah has become one of the most economically attractive jurisdictions. It should be noted that the increase in profits from real estate investments here, for some projects, exceeded the 100% mark. Such an increase in income is due to such important factors as a favorable environment for building a business, a geographically favorable location, the development of the tourism industry, tax and customs benefits and the presence of constant consumer demand for real estate.
An offshore company is registered within 3-4 business days. For an onshore company in Ras Al Khaimah, the registration of a regular company takes 3-5 days.
If the activity of an onshore company falls under the category requiring additional permits, the time to obtain such permits depends on their type and the necessary regulations and may take from a couple of weeks to several months.
In the emirate, you can get one of several types of licenses: a business license, a general trade license and a professional license.
Yes, the company name must contain no more than 100 allowed characters, taking into account the following additional words or abbreviations.
The name of the RAK ICC limited liability company must end with the words «Limited» or «Incorporated» or the abbreviation «Ltd» or «Inc».
The name of an offshore company with unlimited liability should end with the word «Unlimited» or the abbreviation «Unltd».
The name of the RAK ICC company with divided portfolios should include the designation «Segregated Portfolio Company» or «SPC» placed immediately before one of the above words or abbreviations.
To conduct business and open a company in the UAE, you need to take into account that the legal system in the UAE is based on the principles of the Civil Code and the Islamic Sharia law. Sources of law for civil matters include: the Constitution, Federal Laws and Regulations, laws and regulations of each individual emirate, Islamic Sharia.
Now that you have got acquainted with all the subtleties of company registration in Ras Al Khaimah, you can safely start your business. Remember that your success depends on following all the rules.