Law Blog Categories

more

Overview of Company Formation in Ras Al Khaimah Economic Zone

Published on : September 2018
Author(s):Several

Company Formation in Ras Al Khaimah Economic Zone

The Northern Emirate

Ras al Khaimah (RAK) is the most northerly of the Emirates within the UAE, and while it is not as recognizable as the bigger glittering cities located within a couple of hours of it. It does have many natural wonders including its pristine beaches and Jebal Jais Mountain, which is the tallest and arguably most impressive natural formation within the country.

Ras al Khaimah is often overlooked from a business perspective though, especially when compared to the other larger Emirates such as Dubai and Abu Dhabi. However, the Emirate has much to offer for businesses and is surprisingly well versed in the processes with there already being multiple free zones already present and operational.

Within the UAE in general, there are numerous free zones, with over 40 being present across the countries entirety. The vast majority of these are in Dubai, which has over 20 at this stage. The draw of the free zones and the main reason people choose to set up within them is often similar between all free zones.

The Ras al Khaimah RAKEZ free zone draws people to it with the following incentives:

  1. The allowance of 100% foreign business ownership.
  2. Free zone and non-free zone company formation.
  3. Wide-ranging business and industrial facilities and value-added services.
  4. Provision to build on-site staff and labor accommodation.
  5. One-stop shop facility for services.
  6. Self-service customer portal.
  7. Nearest connections to major logistical hubs and multilane superhighways.
  8. Accessibility via an international spread of regional offices.
  9. Easy access to markets across Europe, the Middle East, North Africa, and Asia regions.

RAKEZ is the culmination of 17 years of Ras al Khaimah Free zone activity, and so it has rich experience and is a secure and reliable location within the beautiful emirate of Ras al Khaimah in which to set up a business.

The History of RAKEZ

Ras al Khaimah Economic Zone or RAKEZ as it is known as one of the key free zones within the city. RAKEZ is a relatively new entity introduced in 2017. Its primary duty was to act as an overseer and consolidator for the clients of both Ras al Khaimah Free Trade Zone (RAK FZ formed in 2000) and Ras al Khaimah Investment Authority (RAKIA initially introduced in 2005). This matter may be a little confusing, and so to clarify, both RAKFTZ and RAKIA were individual free zones established before RAKEZ and RAKEZ were set up to merge the two.

Due to RAKEZ consisting of two free zones, the locations within various parts of the city and so setting up within the free zone depends on the business type. The different geographical locations allow for the following activities:

  1. RAKEZ Business Zone: Trading, service and consultancy business
  2. Al Hamra Industrial Zone/Al Ghail Industrial Zone/Al Hulaila Industrial Zone: All three of these locations allow for manufacturing, industrial projects, trading, assembly, and logistics
  3. RAKEZ Academic Zone: Schools, universities, institutes, academic consultancy, and services
  4. Media Zone: Radio, TV, magazines, broadcast, film production, events management, etc.

RAKEZ also has regulations and a regulatory body separate from the mainland. The RAKEZ Companies Regulations of 2017. Within the regulation guide, is contained the information relating to the business set up within the zone, the company structuring and senior employee requirements, and also the permitted activities. On top of this, the accounts and audits of the company are stated and will have to be kept up to date. It is also indicated and specified the manner in which the free zone may inspect the businesses activities, and also what remedies are available in the case that they may be required.

There are a variety of license types offered as well as numerous forms of business entities which can be set up. The types of licenses have briefly appeared in the list above under the different areas of set up. These are:

  1. Commercial License: These entities are involved in the importing, exporting, distributing and storing of goods;
  2. Consultancy/Service License for entities conducting said activities in any industry;
  3. Industrial License for those importing raw materials, manufacturing, processing, packaging and exporting final products;
  4. Educational License which allows for the opening of any form of an educational institute or related consultancy; or finally
  5. Media License for the operating of media (TV, broadcasting, etc.) business.

The following types of companies can be formed:

Free Zone Company

Branches

Non-Free Zone Company

Free Zone Establishment (FZE)

Free Zone Company (FZC)

Branch of a Local Company

Branch of a Foreign Company

Establishment (E) for a non-free zone company

Limited Liability Company

A business entity with a sole owner

Between 2-5 shareholders

Branch of a domestic company. Should be established for over one year

Branch of a foreign company. Should be developed for above one year

Non-Free Zone company with a sole owner

Non-Free Zone company with a minimum of two shareholders

With the non-free zone companies, while they may run within RAKEZ, they will be subject to the UAE Federal Laws rather than the free zone specific regulations, and will not be able to have 100% foreign ownership.

RAKEZ provides a wealth of opportunity to those setting up within it. Consisting of two more experienced free zones allows for it to possess a healthy knowledge of how a free zone should work, while at the same time, it will have its more modern twists (such as 2017 regulations). What this will allow for is a best of both worlds situation with both modern touches and experience. For more information on the business setup in Dubai or RAK, please get in touch with one of our lawyers in Dubai. 

The application process in itself is highly versatile and customizable, and the entire process is fast, with help provided to all. Firstly, a package will have to be selected. What can be chosen from is customizable, and so prices will vary. Following this, the documents and application form will need to be submitted, and the RAKEZ business development professionals will assist in this stage. Finally, the business entity will receive their license and will be able to commence activity in the RAKEZ free zone.

Related Articles