Business Setup in the RAK Economic Zone (RAKEZ), the UAE

Get the details about company formation in RAKEZ Free Zone

Email address: request@dubai-freezone.ae

Phone number: +971 (4) 425 6062

Office hours: Sunday - Thursday from 9-00 to 17-30

Page content:

1. The benefits of registering a company in the Ras Al Khaimah economic zone
2. Company registration in the UAE in the RAK
3. Local infrastructure in the RAK free economic zone
4. Documents for company registration in the Ras Al Khaimah free zone
5. FAQ

Ras Al Khaimah (often abbreviated as RAK) is the northern emirate in the UAE Federation. The city of Ras Al Khaimah is about 100 kilometers to the north of Dubai and 230 kilometers to the northeast of the capital, Abu Dhabi. Highways connect RAK to these business centers. Also, there are regular flights between these Emirates. Ras Al Khaimah is the closest emirate to Iran; its ports are very close to the entrance to the Persian Gulf, which makes them very promising trading hubs.

Although Ras Al Khaimah is smaller than Abu Dhabi and Dubai, local leaders are keen to keep up with these recognized business centers. To achieve this goal, the government has established several free economic zones. The conditions of doing business in the Ras Al Khaimah economic zone (RAKEZ) are just as favorable as those in the free zones of Dubai, but the company formation cost is noticeably lower than in other Emirates, making it an attractive option for entrepreneurs and investors looking to establish a presence in the region. Since 2003, the RAK government has invested heavily in education and public utilities and has been conducting a policy of economic diversification, promoting industrialization, trade, and tourism in the region.

The Ras Al Khaimah Economic Zone (RAKEZ) was established in 2017 through the merger of the Ras Al Khaimah Free Trade Zone (RAK FTZ) and the Ras Al Khaimah Investment Authority (RAKIA). Today, RAKEZ is one of the largest free trade zones in the UAE. RAKEZ registers thousands of companies from various countries operating in the trade, services, industry, and logistics sectors.

With a reputation for accessibility, flexibility, and wide geographical reach, RAK Free Zone quickly became the preferred business center for company setups in the UAE. Ras Al Khaimah is a region from which investors of any origin and any industry can easily access the developing markets of Asia, Africa, and the Middle East. RAK Free Zone leaders have opened offices in Dubai and other countries, such as Germany. These offices now provide information on the procedure for establishing a company in the RAKEZ free zone. Here you can submit documents and get advice on opening an account, obtaining a visa, and other important issues.

Fig. 1 – Location of Ras Al Khaimah free economic zone (Google maps)

You can find all the relevant information about this jurisdiction on their official website: https://rakez.com/

The benefits of registering a company in the Ras Al Khaimah economic zone

Among the advantages that RAK Free Zone offers to foreign investors are the following:

• Companies registered in the RAKEZ Free Zone are subject to the UAE tax system. There is no personal income tax, but a 9% corporate tax is applied to company profits above a certain threshold. Certain types of income may be taxed at a 0% rate if the qualifying free zone person regime is met.
• Imports of goods into the RAKEZ Free Zone are generally exempt from customs duties. However, when supplying goods to the UAE domestic market, the appropriate customs duties (usually 5%) and VAT (5% for most goods) apply.
• Foreign investors can fully own their companies in the RAKEZ Free Zone. Since 2021, following changes to UAE legislation, foreigners have been allowed to own 100% of companies on the mainland in most cases (with the exception of certain strategic industries).
• No restrictions on capital and profit repatriation. All your profits can be freely withdrawn abroad; there is also no currency control in the free zone.
• A promising place for international trade. The strategic position of Mina Saqr port offers great opportunities for trade in the region.
• Developed infrastructure. There is everything necessary for business development: offices, warehouses, building area, communications, and access to the labor market. Ras Al Khaimah Airport and the seaports, Port Khalid of Sharjah and Port of Khor Fakkan, are located close to it.
• Low cost of doing business. The cost of registering a company, the cost of energy, and the cost of labor are lower than those in Dubai.

Also, the United Arab Emirates has concluded double taxation agreements with more than 70 countries, including Canada, China, France, Germany, Indonesia, the Republic of Korea, India, Italy, Malaysia, Pakistan, Spain, Turkey, and others.

Company registration in the UAE in the RAK

In the Ras Al Khaimah free zone, a foreign investor can register a company of three types:

• A branch of a company from the UAE or a foreign company. This is a subsidiary of a foreign or local company; the branch is not a separate legal entity and is engaged in the same activities as the parent company. There is no requirement for the size of the share capital for branches;
• FZE (Free Zone Establishment) is a separate legal entity; in fact, FZE is a limited liability company. A company of this type can have only one owner. The name of such a company should include the word "FZE."
• FZC (Free Zone Company) is also a separate legal entity, but this company must have at least two owners (up to 50). The name of such a company should include the word "FZC." The share capital requirements for FZE/FZC companies may be established by the RAKEZ administration and depend on the type of license and activity; in some cases, nominal capital is permitted.

Company registration can be completed either in person by the founders or through an authorized representative with a power of attorney. However, personal presence is required to obtain visas and open accounts with local banks.

Businesses in RAKEZ are required to maintain accounting records and keep financial documents. In certain cases, the free zone administration may require audited financial statements.

Any company registered in the Ras Al Khaimah economic zone is required to get a license. A license in RAKEZ is a document permitting activities in one of the selected areas.

• Commercial. This license allows your company to import, export, distribute, or store goods. You can choose any specific or general trade license. Most companies registered with RAKEZ have this type of license.
• Consulting/services. This type of license gives your company the right to provide services or consult. Consultation in matters of logistics and customs control, business consulting, etc., requires a consulting license.
• Industrial. Having gotten such a license, a company can produce, process, package, and export finished products.
• Educational. A company may conduct courses and training on the territory of this FEZ. To do this, you must obtain an educational license.

By registering a company in a RAKEZ free zone, a foreign investor gets the right to obtain a resident visa. It is also possible to issue a visa for family members (spouses and children) and employees. The number of visas for employees is determined depending on the size of the office, type of company, and type of activity.

Local infrastructure in the RAK free economic zone

Here we consider the options available to a foreign entrepreneur who plans to open a company in the Ras Al Khaimah free economic zone.

Table 1 – Infrastructure facilities that can be rented for business

Documents for company registration in the Ras Al Khaimah free zone

The list of documents required for the registration of FZE and FZC companies differs from that for the registration of a branch. Here is what you need to collect to open a new FZE/FZC company:

• Application forms, duly signed by the authorized party.
• Applicant’s personal data, Power of Attorney, applicant's signature copy, a valid passport copy, a signature sample application, and copies of the manager’s, director's, and secretary’s passports.
• A brief description of the project for which the company is registered in the UAE.
• Bank letter on the initial share capital of 100,000 dirhams or more according to the share capital of the company.
• Certificate of Registration or Certificate of Good Standing of the parent company, Memorandum of Association, and Charter of the parent company (corporate shareholder).
• A council resolution, which requires the establishment of the FZE/FZC in the RAK Free Zone, a sample signature application, passport copies, and a power of attorney of the manager, director, and secretary. (corporate shareholder)
• Extract from the bank of the parent company, showing a balance equal to or greater than the share capital of the proposed company.

To open a branch, you must collect the following set of documents:

• Application forms, duly signed by the authorized party.
• A brief description of the project for which the company is registered in the UAE.
• Certificate of Registration or Good Standing Certificate, Memorandum and Articles of Association of the parent company, an application with signature samples, copies of passports, and a power of attorney for the manager and directors.
• Council Resolution, which requires the establishment of a branch in the free zone of RAK and guarantees full financial commitment.
• A letter from the parent company about the appointment of a manager.
• Extract from the bank of the parent company, showing a balance equal to or greater than the share capital of the proposed company.

You can complete all the above procedures related to registering a company with RAKEZ by yourself, or you can apply for the services of business consulting companies that will help you make the right choice of jurisdiction, deal with communication issues with local authorities, help you obtain a license and a visa, and open an account at a bank. Using the services of professional business consulting companies, you will save your time and efforts.

If you have any questions about registering a company with RAKEZ, contact our specialists, and they will help you overcome all the obstacles in your path to starting a business in the UAE. 

FAQ

How long does it take to register a company in RAKEZ?

RAKEZ Registry typically takes between a few days and 2-3 weeks to complete registration, depending on the company form, license type chosen, and ownership structure as well as factors such as the completeness of submitted documents.

How much does it cost to register a company in RAKEZ?

The cost varies based on the type of license, service package, and office infrastructure (e.g., flexi-desk/office/warehouse). The registration of the company in RAKEZ is usually cheaper by basic package than most Dubai free zones, but the final cost can vary significantly according to business activity and number of visas.

Is it necessary to rent an office for company registration?

Yes. When you register a company in RAKEZ, it must be registered at an address inside the free zone. This could be a flexi-desk, flexi-office, standard office, warehouse, or industrial space. The location of the infrastructure impacts the cost of both the license and the number of visas a company is able to sponsor.

Is the RAKEZ company allowed to trade with companies in the UAE (mainland)?

A free zone company can do business with international clients and other free zone businesses. To conduct direct commercial activities in the UAE domestic market, a local distributor, a branch on the mainland, or special permits are required.

Can a RAKEZ company open a bank account with a UAE bank?

Yes. RAKEZ companies can open corporate accounts with local banks. UAE financial institutions, however, employ tight compliance measures (KYC/AML); therefore, almost always it requires proof of business activity, a business plan, and personal presence of beneficiaries.

Companies are permitted to acquire how many visas for their directors and employees?

Basically, the number of residents a given company can sponsor depends on the type of license, the size of the office, and the policies of the specific free zone (in this case, RAKEZ). As a guideline, use the following rule: every 8-10 square meters of office space equals one visa. Visas for dependents (family members) can also be obtained.