Ras Al Khaimah (RAK) may be overshadowed by its neighbor, Dubai, in terms of global profile, but it is fast emerging as one of the most important business hubs in the region, thanks to its benign tax regime, favourable company laws, pro-business authorities, pool of skilled foreign workers, and economic and political stability. And like Dubai, RAK is also capitalising on its strategic location between the important economic and financial centres of Asia, Europe, and the Americas.
RAK – an introduction
RAK is the northern-most and fourth-largest of the seven emirates of the United Arab Emirates, bordering Oman to the north and east. Its coastline runs for 65 kilometers along the eastern end of the Arabian Gulf and it benefits from good transport infrastructure, including a well-connected airport close to Ras Al Khaimah town, the major population center. RAK is connected by road to Sharjah and Dubai, which are approximately 80km and 100km away, respectively.
Like its neighbour Dubai, RAK has a large population of expatriate workers, attracted to the emirate by its high pay, low taxes, and, compared with Dubai, its relatively low cost of living.
RAK International Companies
RAK International companies are modelled on BVI Business Companies, which are widely viewed as the premier offshore corporate vehicle. As such, they offer a similar combination of low taxation, confidentiality, and flexibility, and have become a popular choice for foreign investors undertaking investment, trading and holding activities, among other uses, in RAK and the wider region.
The Ras-Al-Khaimah International Corporate Centre (RAK ICC), which was established in early 2015, is the sole entity in the emirate for the incorporation and formation of International Companies.
Legislation and formation
RAK ICs are governed by the International Companies Regulations 2006 and are limited by shares. Generally, a RAK IC takes 1 to 2 weeks to establish, and the initial registration fee is AED2,000 (USD540). A registered office in Ras-Al-Khaimah is required, and company names must end with the words “Limited” or “Incorporated.”
Taxes and exchange controls
RAK ICs are not subject to corporate tax or any other local taxes, and 100 percent foreign ownership is permitted. Furthermore, there are no exchange controls.
Share capital and shareholders
The minimum paid-up capital is AED1,000 and shares can be denominated in any currency. There is no limit on the amount of authorised capital. Bearer shares are permitted, although no par value shares are not allowed.
A RAK IC must have at least one shareholder, and shareholders may be natural or corporate persons. Shareholder records are not accessible by the public. Shareholder meetings can take place anywhere except in Ras-Al-Khaimah.
Directors and secretaries
A RAK IC must have at least one director, although directors do not need to be residents of Ras-Al-Khaimah. Corporate directorships are permitted. However, the company secretary must be local, although these can also be corporate as well as natural persons. A company director can also serve as a secretary. Details of a RAK IC’s directors are not disclosed publicly.
A RAK IC must prepare annual accounts which must be maintained for seven years after the relevant year-end. However, there is no requirement for these to be filed, and they are not accessible by the public. There is no requirement for accounts to be audited.
RAK company law allows companies registered in other jurisdictions to redomicile to Ras-Al-Khaimah as a RAK IC when certain conditions are met. In addition, RAK company law allows an IC to follow the laws of an alternative jurisdiction in certain matters.
RAK ICs are generally prohibited from trading within Ras-Al-Khaimah and the wider UAE, although authorisation can be sought for the holding of shares in UAE companies.
Ongoing company registration fees are AED2,000 per year, and there is an annual return filing fee of AED1,500.