The Emirate of Ras Al-Khaimah - business climate and corporate law

Ras Al-Khaimah - business climate and corporate law Ras Al-Khaimah is one of the seven Emirates of the United Arab Emirates and is located in the northern part of the country. It is located 100 kilometers north-east of the Dubai metropolis. The capital of the Emirate is similarly-named - city of Ras Al-Khaimah, and the population is over 200 thousand people. National currency is dirhams. Ras Al-Khaimah is the international business center with tax exemption policy for companies. Ideal conditions have been created here for non-residents and residents of the country focused on incorporation of offshore and onshore companies and optimization of tax payments.

Special attention in Ras Al-Khaimah tax free zone is paid to enterprises with small and medium turnover. Great opportunities for active development of business schemes have been created for such projects. Startups and other companies may facilitate special set of tools for establishing beneficial business scheme. In particular, companies operating in the FTZ Ras Al-Khaimah may opt for the following benefits for business:

• Opportunities for business planning and protection of assets by current laws and regulations;
• Confidentiality of information relating to ultimate beneficiaries of business;
• Effective tax planning;
• Direct access to modern international infrastructure and communications;
• No currency control;
• Modern and developed banking sector;
• Extensive outsourcing opportunities;
• Eligibility of non-residents to purchase real estate in specially designated areas;
• Full compliance with international safety standards.

Corporate law and characteristics of companies

Corporate law is governed by the Regulation "International Business Companies" enacted in 2006. In addition to this regulation, relationship between business entities is governed by the main law (Constitution of 1971) and the norms of Sharia.

The provisions of the aforesaid Regulations on international companies allow to establish foreign companies with 100% foreign interest on the territory of FTZ Ras Al-Khaimah. It should be noted that for companies with 100% foreign equity, there is no possibility to conduct operations at the local market of the United Arab Emirates. However, it is possible to open bank account in one of local banking institutions.

Compliance with the requirements provides additional opportunities for overseas companies. For example, such companies are fully exempt from payment of local taxes and customs duties.

Overseas companies that operate on the territory of FTZ Ras Al-Khaimah shall be subject to the following restrictions and rules:

• At least one director shall be appointed. At least 21 years old individual or a legal entity may be appointed to the position of a director of overseas company. The maximum number of directors of international companies shall not exceed seven;
• In order to incorporate an international company you may require the services of a special agent, registered on the territory of the Emirates and authorized to deliver such services;
• There are no strict requirements with respect to authorized capital. Authorized capital is formed in any currency suitable for business, whereas the minimum number of shares that may be issued is one share;
• Information and data with respect to a company disclosed to the state registrar is confidential and may not be provided to law enforcement agencies of foreign countries.

Licensing of business activity

Any companies, conducting their commercial and business activities on the territory of FTZ Ras Al-Khaimah, shall comply with governmental licensing procedure.

Pursuant to current laws and regulations, the following types of official licenses are issued for business:

• Service License;
• Trading License;
• Business license;
• Consulting services license;
• Industrial License.

Official business license is issued subject to compliance with the following rules:

• Companies engaged in management shall have appropriate license of the state regulator if required;
• Availability of qualified staff and personnel for performing particular activities;
• Payment of initial license fee.

Business climate and taxation

Stable political situation and actively developing economy have turned the Emirate of Ras Al-Khaimah into one of the most attractive places for doing business. This is evidenced by high ratings of international rating agencies. It has the reputation of the most attractive places for direct foreign investments in the Middle East.

Simplified procedure of company incorporation in local jurisdiction. All companies with 100% foreign interest are fully exempt from income and corporate taxes.

Particular attention shall be paid to foreign companies engaged in industrial sector. A specialized investment management authority (RAK Investment Authority) has been established to solve challenging issued in that direction. Other business opportunities also equally interesting for businessmen are businesses such as tourism, trade and manufacturing. Purchase of property in this Emirate is very popular as well.

The following types of taxes are not applied in FTZ Ras Al-Khaimah:

• Income tax;
• Property tax and withholding tax;
• Export tax.

You can find more about perspectives and opportunities available in free trade zones of the United Arab Emirates by visiting other sections of our website or by contacting us.