8 Essential Steps For Setting Up a Business in RAK

8 Essential Steps For Setting Up a Business in RAK

by Zaara 12, Feb 2021

Ras al-Khaimah (RAK) is situated in the northern part of the United Arab Emirates ( UAE), bordering Musandam's Oman exclave, and is the first port of call for all north emirates. RAK is a growing Middle East business destination recognized for the second time in a row as the "Best Emerging Free Zone." Its strategic location (proximity to Port Saqr makes it closest to Northern markets such as India, Pakistan, Iran, CIS, China, etc.), efficient management, global connectivity, accessibility to Dubai (45 minutes). The ease of transshipment gives RAK an advantage despite the abundance of other UAE business hubs.

Establish Up a Business in Ras Al Khaimah

Ras Al Khaimah (RAK), located in the northern end of the UAE, shares mountainous boundaries with the Oman Sultanate and is established between the West Arab Gulf and the East Hajjar Mountains. RAK is 45 minutes from Dubai and is quickly emerging as the preferred option for global investors.

Though there are many free zones in the Emirates, which makes RAK step out in the Emirates is its strategic position. RAK is nearest to the far eastern nations; China, India, Iran, Pakistan, and the CIS. In contrast to easy entry, trouble-free administrative procedures, and proximity to the RAK Free Trade Zone and Port Saqr, Ras Al Khaimah is a popular port and offshoring northern Emirates hub.

Why is Business Formation in RAK the Right Decision?

Ras Al Khaimah has encountered an influx of foreign investors as it is one of the Emirates' most developed economies and has seen significant economic growth. The factors attracting significant foreign investment in RAK are liberal government policies, state-of-the-art infrastructure growth, a vibrant economy, and friendly neighboring nation trade relations.

Another factor you should consider starting up a business in RAK is that having a physical presence in the Emirates creates trust among the indigenous people, establishes long-term customer relationships, and gains trade contacts in the UAE.

Companies established in Ras Al Khaimah enjoy the following benefits and services:

  • No personal or company income tax
  • No restrictions on foreign exchange, quotas or trade barriers
  • No tariffs on imports, exports, or services
  • Hassle-free and business-friendly legislative structure and company laws which guarantee investment protection
  • Government-sponsored Investor rewards
  • Ownership at 100 percent
  • 100 % Tax exclusion on all industrial import and export taxes
  • 100% Capital and Income return
  • Business-friendly ecosystem and quick process for establishing a business

Types of Business Setup in RAK

It needs proper licenses to start a business in Ras Al Khaimah. The Free Zone Authorities manage the registration and issuance of business licenses at Ras Al Khaimah to non-resident companies. Other licensing procedures are governed by the federal government and the individual emirates. The conditions and regulations for establishing business differ in each Emirate depending on the type of company.

An expatriate has three choices for setting up a business with RAK:

  • RAK Free Zone
  • RAK Offshore
  • Mainland Company

Commitbiz is well versed in these regulations and laws. It lets its customers register new businesses with either the Free Trade Zones, Economic Department, or Local Chambers of Commerce, depending upon their business type.

For a company established in Ras Al Khaimah, the types of licenses available are:

  • Industrial/Service License
  • Trading/Commercial License
  • Professional/General Trading License

Here is a brief description of each location:

1. RAK Free Zone

Commitbiz offers the setup of its RAK free zone enterprise. The city provides all company set up facilities at 25 percent lower rates than any other UAE Emirate. As a result, businesses of all forms and scales choose RAK for the creation of companies. The Ras Al Khaimah free zones are cost-efficient, hassle-free, and has a customer-friendly atmosphere that drives foreign nations to set up their business.

Ras Al Khaimah has four major Free Zone business parks:

  • Business: Investing in Businesses and Corporations
  • Industrial: Ideal for heavy manufacturing industries
  • Technology: It has companies and light producers engaged in the trade

Academic: The RAK FTC seeks to be a top educational destination by demarcating a region for the world’s best educational institutions.

 2. RAK Offshore

RAK Offshore was developed to meet the growing demand for offshore markets. It also helps the government increase its sources of income for their economy's constant growth. In RAK offshore client portfolio, over 1900 International Business Companies (IBCs) are registered. The first offshore companies listed with RAK are investments in real estate and energy. RAK offshore is creating new policies creating a safe atmosphere for the residents.

The business consultants can help you with the cost-effective RAK offshore company formation without any problems and quickly.

3. RAK Mainland Company

Business opportunities in the Emirates are booming at Ras Al Khaimah. A mainland company in RAK should have a local patron. Foreign investors are swarming in and making it one of the Emirates with the most growth. The business setup is now widely known as Ras Al Khaimah because it has advantages in its location.

Types of Business Entities in RAK

One has to choose the type of corporate structure for their business before creating the RAK business. Here's Ras Al Khaimah's list of legal forms provided to its investors.

1. Limited Liability Company

A company may conduct its business at Ras Al Khaimah through an LLC. It can be founded with at least two members and a maximum of fifty. It is compulsory to prove that capital has been deposited in a UAE Bank to register a limited liability company. The funds may be released following procedure with the Ras al-Khaimah Chamber of Commerce.

2. Joint Venture Company

A Ras Al Khaimah Joint Venture is a contractual arrangement between a foreign party and a local group. There's no need to license or disclose the agreement in a joint venture.

3. Public Shareholding Company

A Public Joint-Stock Company must have minimal ten shareholders and be authorized by the Ministry of Economy and Trade. The company's founders should subscribe at least 20 percent of the company's capital and 45 percent at the maximum. A single shareholder cannot subscribe to over 10 percent of the shares.

4. Private Shareholding Company

A private joint-stock corporation can not have a member of less than three. Shareholders may contribute to AED 2,000,000 or more of the full shares. A private joint-stock company's claims cannot be placed up for public sale.

5. Free Zone Company

A Free Zone Corporation (FZCO) is a limited liability organization. May be registered by two or more shareholders. The minimum capital needed to create an FZCO is AED 250,000.

6. Free Zones Establishment

A Free Zone Establishment (FZE) is a distinct legal entity with a sole proprietor or corporation. An individual or a corporate entity may own an FZE. The minimum capital required for establishing an FZE is AED 150,000.

Business Licenses in Ras Al Khaimah

One must have a valid license to conduct the business operation. Here's a list of Ras Al Khaimah's business license provided:

1. General Trading License

Trading or General Trading License enables the importation and export of products to and from the UAE. The general trade license requirement can include up to two separate product categories, such as 'Foodstuff,' 'Cosmetics,' and 'Building Materials.' The license allows one to unrestrictedly trade goods.

2. Professional License

One can undertake multiple professional services such as consulting, IT, design,  production, by obtaining this license. RAK Free Zone has the most comprehensive list of activities, and one can be sure they can find a suitable business activity in their country.

3. Industrial license

An Industrial License permits an investor to import raw materials, produce specified products, and export the finished product. RAK Free Zone has rentable warehouses and property, and unlike many other Free Zones, it still has convenient storage warehouses.

Benefits of Business setup in Ras Al Khaimah

RAK offers additional powers for regional business growth. The Emirates provides a forum that links eastern to western trade routes. Several key advantages can be highlighted out among the main opportunities for foreign investors, in particular:

  • Rich content and technological foundation and high stocking capacity
  • Growth prospects for the international tourism industry
  • A vital location with access to the regional and global markets
  • Larger transport hubs available
  • Large container port and docks at the marina
  • Relatively low prices for leasing space and providing electricity
  • Business setup in RAK is an excellent choice to establish a Dubai free zone company, as it offers a wide range of office and warehouse facilities.
  • Investors should leverage the surplus of competitively priced energy supplies.

How to register a Ras Al Khaimah Business?

The Ras Al Khaimah company setup is laidback, but you need to take care of a list of lawful procedures and reporting procedures that our team can assist. Commitbiz has a couple of seasoned business experts to take care of the entire RAK company development process, which will help you with the following:

The procedure for Ras Al Khaimah company formation are:

1. Decide on the Business Activity

Under this step, identify the type of economic activity of your business. It can be listed under business, technical, and industrial operations. Manufacturing, public, industrial, retail companies are engaged in the manufacture and sale of products to consumers or businesses. Professional businesses provide specialized personal or business services such as administration, accounting, consulting, etc. Industrial enterprises typically produce, store, and package products.

2. Determine the Legal Structure of the Business

The next move is to make decisions about the corporate agency and select one from the above list according to your business operation. The requirements regulating legal status are determined by the form and existence of the company.

3. Finalize the Location

There are three leading RAK, Island, Free Zone, and Offshore jurisdictions. Mainland provides a company to be kept in and outside the UAE. A business that wants to register in RAK Mainland has plenty of reaches. RAK Free Trade Zone is located 45 minutes from Dubai and offers a highly efficient business-friendly atmosphere with state-of-the-art facilities and easy set-up with limited office space. From Flexi-desks and core departments to multi-floor offices and industrial warehouses, you choose from various forms.

4. Obtain Initial Approval

Before acquiring a company name certificate,  the investor may receive initial approval. The initial support allows the investor to begin procedures for issuing business licenses and contacting the authorities concerned to receive their assistance. It is appropriate to carry out the required business operation but not carry out the process without first obtaining the license.

5. Register Your Trade Name

After finalizing the business venue, the next step is to choose the company with a specific and fitting trade name. Submit the company name recommended to the Economic Development Department.

6. Apply & Submit

After the initial approval has been received, and the criteria and legal conditions have been met, the investor may contact the other authorities to obtain their consent. Many ministries are classified according to the activity needed, although certain operation types may require the Department of Economic Development's sole permission.

The required documents are:

  • Certified copy of the contract of tenancy
  • Photocopies with no letter with protest, visa, passport, and certificate of residency
  • Copy of land map or Certificate of ownership
  • Gaining agreement to legal matters
  • Type of application for a license and signboard
  • Obtaining permission from the economy ministry
  • Ensuring all essentials government approvals, if necessary
  • Receiving relationship contract approval from notary public
  • Copies of national identity papers and family book
  • Receiving information on professional assessment
  • Acquiring a Certificate of trade name

7. Acquire a Business License

After the authorities’ consent has been obtained, the stakeholder may proceed to the stage of fulfilling all the legal requirements for the issuing business licenses. It can be done with the Department of economic development’s approval before the permit is eventually received.

8. Rent an Office Space

In this phase, the business person may rent the business site after visiting the Department of Economic Development's Monitoring & Consumer Protection Administration. Besides this, they shall also see other authorities concerned to inspect and authorize the company’s position.

Why Invest in Ras Al Khaimah?

A strong economy coupled with a secure political climate makes Ras Al Khaimah an exciting, diverse place to invest. The RAK government maintains a policy of attracting foreign investment. A lot of international corporations have opted to locate their tasks in RAK over the last few years. In the following industries, RAK offers excellent business opportunities:

  • Industrial and manufacturing
  • Mining, minerals exploration, extraction, and quarrying projects
  • Food processing and diary
  • Tourism, real estate, and construction
  • International maritime related industries and services, including maintenance and fabrication work
  • Warehousing, cold stores, transport, and distribution
  • Trade and commerce

There are many such opportunities obtained from starting your business in Ras Al Khaimah.

Our Business Setup Services in RAK

We at Commitbiz are RAK experts on company development and can assist you with the following business setup services. Our services to establish businesses in RAK are:

  • Incorporated business
  • Enterprise Registration
  • Local Patronage
  • Officer of Public Relations (PRO) operations
  • Accounting and bookkeeping
  • Auditing
  • Tax consultancy
  • Register Value Added Tax (VAT)
  • Legal advice
  • Establishing a branch office at RAK
  • Intellectual property protection

How Can We Help You?

Commitbiz is a one-stop company that helps companies set up their RAK operations and fulfills the paperwork and legal formalities needed. Extensive domain experience and familiarity with Emirates laws allow us to take care of our clients' Passport, Visa, and Licensing needs. We ensure they accomplish their mission quickly without unwanted red tape.

We can guide you on your own in this growing economy. Contact us to start a new business in Ras Al Khaimah-you'll love the journey!

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