Public/Private Shareholding Company in Ras Al Khaimah

Ras Al Khaimah (RAK), one of the most picturesque Emirates in the UAE, has long been recognized as the heart of traditional shipbuilding and trade. Today, it stands at the forefront of manufacturing, quarrying, and tourism, boasting a vibrant and diversified economy. Over the years, RAK has strategically evolved into a thriving investment destination and one of the most sought-after tourist hubs in the Gulf region.

With its commitment to economic development and innovation, Ras Al Khaimah has become a preferred destination for entrepreneurs seeking to establish a business in the UAE. The Emirate offers a unique blend of economic stability, investor-friendly regulations, and scenic beauty.

When setting up a business in Ras Al Khaimah, one of the first steps is to decide on the legal structure. Among the available options, the Public Shareholding Company and Private Shareholding Company are highly favoured by entrepreneurs looking to establish large-scale ventures or corporate entities.

Why Start a Business in Ras Al Khaimah?

Ras Al Khaimah has emerged as one of the most promising destinations for business setup in the UAE, offering investors an ideal blend of opportunity, affordability, and innovation. Its progressive business environment and strategic advantages make it a preferred choice for entrepreneurs from around the world. Let us see the reasons why investors choose this destination:

• Positioned close to major shipping routes, RAK connects businesses to global markets across the Middle East, Asia, and Africa.
• Offers lower business setup and operating costs compared to other major UAE cities, maximizing profitability.
• Streamlined registration procedures and investor-friendly policies make company formation quick and efficient.
• Offers tax-friendly policies and full repatriation of profits
• State-of-the-art ports, industrial zones, and logistics facilities support diverse business activities.

Public Shareholding Company in Ras Al Khaimah

A public shareholding company also referred to as a public joint stock company is a good option for entrepreneurs planning a business setup in Ras Al Khaimah. It is governed by the UAE Commercial Companies Law. The capital of a public shareholding company is divided into equal value negotiable shares, allowing it to raise capital from the public through share offerings.

According to the CCL, shareholders in a PJSC are only liable to the extent of their investment in the company’s shares, ensuring limited liability protection. The nominal value of each share must be between AED 1 and AED 100. This structure is particularly suitable for large-scale projects, as it enables companies to raise substantial funds from both institutional and individual investors.

A public shareholding company is the only legal structure in the UAE that allows shares to be publicly traded, making it an ideal choice for businesses seeking to raise significant capital. This flexibility allows small local and foreign investors to participate in large-scale ventures, boosting investor confidence and participation.

In addition, for industries such as banking, insurance, and investment, establishing a public company is a legal requirement. Companies engaging in such activities must be incorporated under this structure, as no other type of entity is permitted to carry out these specific operations.

Requirements to Start a Public Shareholding Company in Ras Al Khaimah

To ensure transparency and sound governance, certain criteria must be met while setting up a public shareholding company in RAK:

• A minimum of ten founding members is required.
• The company must have a Board of Directors consisting of at least three and not more than twelve members.
• The term of office for directors cannot exceed three years, though re-election is permitted.
• The Chairman of the Board must be a UAE national, and the majority of directors should also be Emirati nationals.
• UAE nationals must hold at least 51 percent of the company’s shares.
• The founding members must subscribe to at least 20 percent and not more than 45 percent of the total share capital.
• At least 10 percent of the net profit must be allocated annually to a general reserve account until the reserve equals half of the paid-up capital.

The public shareholding company structure has grown increasingly popular in recent years, particularly in sectors that benefit from public participation such as utilities, infrastructure, and industrial ventures.

Private Shareholding Company in Ras Al Khaimah

A private shareholding company is a form of corporate ownership characterised by limited share distribution and non-public trading. It is essentially a closed company owned by a smaller group of shareholders, often including individuals or corporate entities, rather than being open to the general public.

Private shareholding companies are typically used by medium to large enterprises that wish to maintain control over ownership while benefiting from a joint-stock company’s legal and financial advantages.

Requirements for Establishing a Private Shareholding Company in RAK

A private joint stock company shares many similarities with a public company, but there are key differences in terms of formation, regulation, and capital requirements. These are:

• The minimum capital requirement is AED 5 million, significantly lower than that for a public company.
• Only two founding members are required.
• The company is supervised by the Ministry of Economy, rather than regulated by the Securities and Commodities Authority (SCA).
• The shares cannot be publicly traded. They may only be offered to the public after at least two financial years, and only upon conversion into a public shareholding company, subject to meeting certain conditions.

Because of the lower capital threshold and simpler setup requirements, private shareholding companies are often more appealing to foreign investors who wish to enter the UAE market.

How to Set Up a Public or Private Shareholding Company in RAK?

Setting up a public or private shareholding company in Ras Al Khaimah involves several procedural steps to ensure compliance with the RAK Department of Economic Development (RAK DED) and other relevant authorities. Below is a streamlined overview of the process:

Step 1: Determine the Business Activity

Identify the nature of your business operations and confirm whether it falls under the permissible categories for public shareholding and private shareholding company formation.

Step 2: Register Trade Name

Select a unique name which complies with the UAE naming convention and is not offensive. Register the name with RAK DED.

Step 3: Get Initial Approval

Now, submit documents to get an initial approval from RAK DED. They will provide a no-objection certificate which means you can proceed with the next steps.

Step 4: Draft the Memorandum of Association (MOA)

Prepare the company’s MOA outlining the shareholding structure, capital distribution, governance framework, and objectives.

Step 5: Arrange Documents and Pay Fees

Gather necessary documents and submit with the application form. Upon approval, pay the required registration fees and receive the business license.

These steps ensure that your company meets all regulatory and legal obligations for operating in Ras Al Khaimah.

How Can Commitbiz Help?

Company formation in Ras Al Khaimah offers immense potential for growth and profitability. However, choosing the right legal entity and ensuring full compliance with UAE business laws can be complex. Whether you wish to set up a Public Shareholding Company or Private Shareholding Company in Ras Al Khaimah, taking the help of expert business setup consultants in Dubai can be of huge help.

Commitbiz provides comprehensive business setup solutions to help entrepreneurs establish their presence in RAK with ease. From company registration and licensing to accounting, tax advisory, and bookkeeping, our team of professionals ensures a smooth and hassle-free incorporation process. Get in touch with Commitbiz today to take your first step towards building a successful business in Ras Al Khaimah and beyond.