Ras Al Khaimah, also known as RAK, is one of the seven Emirates that make up the UAE association. The city has always stood apart and has a great significance, even though it is one of the small Emirate in the UAE. One of the many reasons that make Ras Al Khaimah a potent and appealing place to invest is its stable political environment and a vibrant economy.
The Emirate provides different types of legal entities for those wanting to start a business in RAK under the UAE Commercial Companies Law. The most sought-after corporate entity is the Limited Liability Company or an LLC.
Limited Liability Company in RAK
LLC’s are accessible and often said to be a suitable option for business in RAK by foreign investors. The intended business involves insurance, banking, and/or investment activities conducted on behalf of third parties; an LLC is not lawfully permitted to engage in such activities.
Features of an LLC Company in Ras Al Khaimah
- The CCL governs LLCs.
- LLCs are, in general, under the regulatory purview of the Department of Economic Development (DED)
- A public subscription for raising capital is not allowed.
- Even though a foreign partner is only generally permitted to own a maximum of 49 per cent of the Company's capital, the day-to-day management of the Company may be vested in a non-national manager.
- Managers may be one or more of the partners or any other third party (including foreigners) provided that they do not exceed a total of five persons.
- Given that foreign ownership is limited to 49%, national partners holding 51 per cent enter into contractual arrangements with the foreigner according to which the foreigner receives all benefits from the Company, assumes all risks of the Company, and entirely operates the business. In such cases, the UAE national may also give the foreign partner a power of attorney authorizing them to vote in the general assembly on their behalf.
- Foreign ownership of up to 70% may soon be possible under proposed legislative amendments.
- It is possible to provide in the MoA that the profit and losses will be shared into a ratio different from that of the share capital ratios.
- It is essential to appoint an auditor who must be accredited in the UAE; and
- The auditor should be appointed by the general assembly (which is essentially a meeting of all the Company)
- While it is necessary to show that capital has been deposited in a UAE Bank to establish an LLC, it may be released once the Company has been registered with the Ras Al Khaimah Chamber of Commerce.
How to Register an LLC in Ras Al Khaimah?
An LLC registration in RAK must be made with an application submitted to the Department of Economic Development. The application and all supporting documents can be in English. Companies can only be incorporated by using registered agents. An LLC can be incorporated in the RAK within two business days.
1. Get an Initial Approval from RAK DED
The first step to obtaining a necessary trade name approval and submit the Registration and Licensing Application Form [duly completed and signed by all partners] with RAK DED for obtaining their initial activity approval for the LLC along with the below-mentioned documents:
- Passport and family book copy of the UAE national partner
- Passport copy of the expatriate partner
- NOC for the expatriate partner (in case he has an existing UAE residence visa)
- Passport copy of the expatriate manager [in case different from the partner]
- NOC from the sponsor for the manager [in case he has an existing UAE residence visa]
- If a business will be the 49% partner in the LLC, then the documents would be needed including Certificate of Incorporation, Memorandum & Articles of Association, Share Certificate and a Board Resolution resolving to establish a business in Ras Al Khaimah and for the appointment of the representative and power of attorney for signing the documents on behalf of the organization
- Passport copy of the representative of the business
The documents must be duly attested and notarized by the Ministry of Foreign Affairs, Ras Al Khaimah.
2. Notarize the Memorandum of Association (MoA)
Once you get the initial approval from RAK DED, the applicant must prepare and notarize the Memorandum of Association. It is important to note that all the partners or representatives of partners should be present before a Notary Public to sign such Memorandum.
3. Obtain a Tenancy Contract
Once the initial trade name and activity approval from DED is obtained, you can simultaneously locate a suitable commercial premise for carrying out the activity. It is always prudent to get preliminary approval from the Planning Section before signing the tenancy contract and making the payments. Furthermore, all lease agreements should be registered with EJARI under Real Estate Regulatory Authority (RERA). Typically the registration with EJARI is prepared by the landlord at the time of signing the tenancy contract.
4. Submit the Documents to DED for Obtaining License
After that, the business premises are inspected, if needed. Subsequently, the below-mentioned papers, along with the documents mentioned for activity approval, needs to be submitted to DED, Ras Al Khaimah :
- Approved Registration & Licensing Application Form
- Initial trade name and activity approval provided by the DED
- Notarized Memorandum of Association of the LLC
- Copy of the tenancy contract, Affection Plan, DEWA receipt for the office premises and EJARI Registration
Once all documents and papers are accepted and verified, the DED will issue the payment voucher for obtaining the LLC's commercial license.
How can we help?
We at Commitbiz can help you set up a business in the UAE. With 13+ years of experience in this field, we can make the setup procedure hassle-free. Our consultants can help you right from business incorporation to office space. Contact us today for more information.
Contact us today for more information.