A Guide to RAKICC Free Trade Zone in the UAE

Ras Al Khaimah became a representative of the Federation in 1972, one of seven emirates including the United Arab Emirates. Ras Al Khaimah passed the Ras Al Khaimah International Company Law in 2006, which is based on the model of the British Virgin Islands' effective international company regime. In 2016, to keep pace with global trends most recently was revised the legislation.

The merging of two business registries in Ras Al Khaimah, namely RAK International Companies (formerly part of the RAK Free Trade Zone) and RAK Offshore (formerly part of the RAK Investment Authority), is the RAK International Corporate Centre.

It is responsible for the issuance and incorporation of International Business Companies and the provision of a comprehensive collection of registry services relating to the activities of International Business Companies.

RAK ICC is a new world-class company registry that operates in the International Business Company creation industry in full compliance with international standards and best practice.

RAK International Corporate Centre will be at the centre of the formation of the International Business Service provider and will continuously develop our service model to meet our customers' needs.

The Ras Al Khaimah International Corporate Centre is a developing free trade zone in the Ras Al Khaimah Emirate of RAK ICC Free Zone. Within a 45-minute car ride away (including Dubai International Airport), RAK ICC has three airports and also has three ports nearby.

As a result of the convergence of two previous free zones, the RAK Free Zone and the RAKIA Free Zone Authority, the RAK Free Zone Authority is trying to ease the regulatory structures for those companies in the growing segment of the Emirati economy.

Benefits of RAK ICC

The RAK ICC offshore company is set up on the territory of the UAE without having to have a physical office and can only conduct business outside the region. Whereby such a person can have a bank account in the bank of Dubai or any other Emirate. There is no need to provide the authorities with annual financial statements on companies of this kind, among other benefits, and it is effortless to sustain the company. All you need to do is renew the company annually.

• 0% Corporate tax, 0% VAT and no sales tax
• No requirement for the manager or director to personally visit the UAE
• Total international ownership of 100 per centRAK ICC
• Capital and tax repatriation of 100 per cent
• For corporate incorporation, personal presence is not needed.
• Confidentiality is preserved; owners or directors are not publicly registered.
• No requirement for an audit or requirement to present financial statements
• The UAE will hold bank accounts.

RAK ICC Company Setup Requirements

There are two variables to be addressed when registering companies in the UAE. First, you will need to decide the form of company you want to build and then the licence that corresponds to your business operations. What kind of organisational structures are permitted by the RAK ICC Free Zone Authority? One of five systems can be taken on by the foreign business company, or IBC:

1. Company Limited by Shares
2. Company with Limited Purposes
3. Company Limited by Guarantee
4. Unlimited Company
5. Segregated Portfolio Company

1. Company Limited By Share

It implies that the responsibility of the shareholders to the company's creditors is limited to the money initially invested, i.e. the nominal value of the stock plus any premium charged in exchange for the company's issuance of the shares.

The Company Limited by Shares Memorandum shall specify the maximum number of shares that the Company is entitled to issue or that the Company is entitled to give an unlimited number of shares. The classes of shares that the firm is entitled to publish and if the Company is entitled to print two or more types of claims, the freedoms, benefits, limitations and conditions attached.

This type of company must have at least one shareholder and a director at all times. The business could issue bonus shares, shares partially paid, or claims zero paid. Shares can be owned as joint owners by more than one person. The name of each of those joint proprietors is entered as holders of the related claims in the member's register. In its papers, a corporation shall determine the circumstances in which share certificates are to be issued. These share certificates must be signed by at least one of the company's directors.

2. Company Limited By Guarantee

The Company Limited by Guarantee could set up with RAK ICC as a company approved to issue shares or as a company not approved to issue shares.

Any former guarantee members in one year before the starting of the liquidation activity of the Company Limited by Guarantee shall be responsible for contributing an amount not exceeding the amount guaranteed by such person to the assets of the company for the payment of its debts and liabilities. The cost of winding up, and for the adjustment of the contributions of that company’s guarantee members and former guarantee members that such former guarantee members would have been liable to contribute had the winding up occurred on the last day of their membership of the company.

3. Restricted Purpose Company

Restricted Purposes Corporation is a corporate body that is intended to function as a particular purpose vehicle.

A Restricted Purposes Corporation is a company limited by shares whose memorandum states – (a) that the company is a limited purpose company, and (b) the intent or reasons for which the company is incorporated.

Companies with limited purposes are primarily used for particular purposes. The additional comfort layer for persons doing business with a Restricted Purposes Company is that the company does not participate in any operation that is against its specified intent. The restriction on the company activities as stated in its memorandum is binding on the company, shareholders and directors.

4. Segregated Portfolio Company

The Segregated Portfolio Company(or SPC) is a company that distinguishes the assets and liabilities of various groups (or sometimes series) of shares from each other and the SPC's general assets, sometimes referred to as a covered cell company.

The assets of the Segregated Portfolio include assets reflecting share capital, retained earnings, reserves of money, share premiums and all other purchases attributable to or held within the Segregated Portfolio.

5. Unlimited Company

Unlimited Company is a structured company (corporation) organised with or without share capital (and identical to its limited company counterpart) but where the legal responsibility of the members or shareholders is not fixed. Its members or shareholders have a mutual, numerous and non-limited duty to fulfil any inadequacy in the company's assets to allow any outstanding liability to be resolved.

6. Transfer of Domicile

For several purposes, businesses re-domicile or opt for the move of domicile, the most relevant being the opportunity to take advantage of a tax-neutral environment or the availability of a Double Taxation Arrangement network, to connect their place of registration with their shareholder base or to access professional capital markets.

Procedures to Follow for Transfer of Domicile

Step 1- Application and Name Check

Requests to re-domicile the registered agent submit a foreign company to the Registry.

Step 2- Submission of Documentation

• Documentation required for Continuation
• KYC requirements for individual shareholder/director/secretary
• KYC requirements for corporate shareholder/director/secretary

Step 3 – Review

• Due diligence Check & Review

Step 4 – Acceptance Confirmation

•  Issuance of Invoice / Payment

Step 5 –Approval & issuance of Certificate of Continuation by the Registrar

Why RAK ICC?

• There is no minimum capital requirement, and financial reports are not necessary for you to file.
• The company documents do not require any legal attestation, and through your licenced agent who takes care of the process for you, the process will take just a day.
• RAK ICC operates in the DIFC and ADGM (Abu Dhabi Global Market) Free Zones under Common Law legislation with access to the legal systems.
• RAK ICC enables you to move your corporate residence to RAK ICC from another offshore jurisdiction.
• The power is not given to you by most free zones in the UAE. The general principle is that if you want to modify the free zone, you will have to liquidate the previous company in the free area that you would like to abandon and start another one in the new open area from scratch.
• In collaboration with the DIFC Wills Centre at the Dubai International Financial Centre Free Zone, RAK ICC also maintains a Probate and Wills register.

How can you Incorporate a Company in the RAK ICC Free Zone?

The RAK ICC Free Zone allows all interested parties to use a registered agent to set up a company that uses the International Business Company (IBC) framework. There is no other opportunity for this free zone to be used. As registered agents of the RAK ICC Free Zone can facilitate the formation of your business in RAK ICC.

How Can We Help?

We at Commitbiz will assist you and facilitate you in the formation of business in RAK ICC. We cover it all, right from company incorporation to office space. In this area, our advisors have years of experience and can make the process hassle-free. Contact us today for more information.