Business Setup in Ras Al Khaimah

Ras Al Khaimah (RAK) is situated in the northern end of the UAE. It shares the mountain borders with the Sultanate of Oman and is settled between the Arabian Gulf on the West and the Hajjar Mountains on the East. The Emirates is just 45 minutes away from Dubai and has easy access to various other countries due to its interconnectivity. 

It is an emirate of opportunities and caters to various sectors, making it an ideal destination for more RAK business setups. Individuals are looking to set up businesses in such places because it is strategically located close to far eastern nations and have impressive logistical connections to the RAK Free Trade Zone and Port Saqr. We will look at the essentials, types and steps for business setup in Ras Al Khaimah.

Why is RAK an ideal place for Business Formation?

In recent times, Ras Al Khaimah saw an inflow of foreign investors due to the growing economy and business-centric developments in the emirate, such as government policies, modern infrastructure, and friendly international relations, attracting investors and entrepreneurs for company registration in Ras Al Khaimah. The following are the facilities and incentives issued by the authorities of the Emirate –

  • 100% Ownership.
  • Ensures Security of Investments.
  • 100% Return of Capital and Profits.
  • No Taxes on Personal/ Corporate Income.
  • No Custom Duty on Import, Export or Services.
  • Government-sponsored incentives for Investors.
  • Hassle-Free and Business-Friendly Legal Regulations.
  • No Foreign Exchange Controls, Quotas, Trade Barriers.
  • Business-Friendly Environment and Easy Incorporation Process.
  • 100% Tax Exemptions on Commercial Levies for Import and Export.
     

Types of Business Setup in RAK

There are various jurisdictions in Ras Al Khaimah where individuals can start their businesses. Entrepreneurs must choose a jurisdiction depending on the scope and requirements of their businesses because each jurisdiction has its own benefits and legal regulations.

There are three options for RAK business setup by an expatriate:

Commitbiz is well-versed with these laws and regulations. It helps its clients register new companies either with the Free Trade Zones, Economic Department or Local Chambers of Commerce depending on their nature of the business.

The types of licenses available for a company set up in Ras Al Khaimah are:

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

Here is a brief description of each jurisdiction.

a) RAK Mainland Company: 

A mainland company is nothing but an onshore entity that is registered under the relevant emirate’s government body. The Department of Economic Development issues trade licenses and allows commercial activities in this zone.

Mainland in Ras Al Khaimah must have a local sponsor where they will own a majority of shares in the company.

There are various benefits of mainland companies in Ras Al Khaimah, and they are - 

  • No currency restrictions.
  • No annual auditing. 
  • Facilitates renting offices.
  • Conducting business with the local market.
  • No limit on the number of business activities, etc.

b) RAK Free Zone:

A free zone is another type of business structure used for establishing companies that are regulated within special jurisdictions that come under the respective emirates. Their regulatory body is called the Free Zone Authority. 

Furthermore, this zone offers different advantages like fewer packages for setting up a business in RAK, lower tax rates, a customer-friendly environment, etc. Some of the best business setup in Ras Al Khaimah are mentioned below –

i) RAK Maritime City Free Zone.

ii) RAK Media Free Zone (RMFZ).

iii) RAK Economic Zone (RAKEZ). 

iv) Ras Al Khaimah Investment Authority Free Zone (RAKIA).

c) RAK Offshore:

Offshore refers to any business activity that takes place outside an entity’s home base. They are established to cater to the high demand for offshore markets. These offshore companies ensure growth in the economy and create a business-friendly environment for business owners and investors. 

There are several benefits to business setup in Ras Al Khaimah Offshore, and they are - 

  • Privacy.
  • Rational cost packages.
  • Import duty exemptions.
  • Keeping business details safe.
  • 100% repatriation of capital and profits, etc.

Types of Business Entities in RAK

When business owners wish for a company formation in Ras Al Khaimah, after deciding on the jurisdiction, they must decide on the business entities as well. Here’s everything about the types of corporate structures of the company –

a) Sole Establishment:

sole establishment in Ras Al Khaimah is an enterprise completely owned by one individual who controls and manages the business.

It is the simplest form of business structure because of the following –

  • Minimal legal requirements.
  • Profits are enjoyed solely by the owner.
  • The business and the owner are not legally separated, etc.

b) Limited Liability Company (LLC):

A limited liability company (LLC) is commercial in nature and can comprise a minimum of two and a maximum of fifty shareholders. One of the best factors of LLCs is that it limits the personal liability of the owners/partners working in the company. This structure facilitates flexibility and consists of lower tax rates.

c) Joint Venture Company:

Another structure that individuals can think of during RAK business setup is the joint venture companies. It is a contractual agreement between foreigners and local parties licensed to direct the ideal business movement.

d) Public Shareholding Company:

A public shareholding company must have a minimum of ten members. It is a company where capital is divided into equal shares, and shareholder liability is limited to the number of shares in the company. 

e) Private Shareholding Company:

A private shareholding company must have a minimum of three members. This company cannot invite the public to subscribe to the shares. Shareholders must subscribe to the full capital of at least AED 2,000,000. 

Types of Business Licenses in RAK

To function with the chosen business activity, the business owners need to acquire certain approval from the authorities, which is issued in the form of trade license in Ras Al Khaimah. 

Each of them is appropriate for a set of business activities consisting of benefits and requirements. They are as follows –

a) General Trading License:

A general trading license is a combination of industrial and trading licenses. 

It permits trading in a wider range of goods, catering to various industries. However, certain items like alcohol, pharmaceuticals, weapons, etc, that come under specific restrictions and regulations are prohibited from trading.  

b) Commercial License:

A commercial license is facilitated for people who conduct trading activities within the country. In other words, it permits the buying, selling, and trade of goods, commodities and services.

c) Industrial License:

An industrial license is another type of license used by business owners for RAK business setup that are into manufacturing, importing, exporting, and packaging products as specified by the authorities.

d) Service License:

A service license is granted to individuals who are conducting services or consultancies across any industry in the Emirate. 

e) Professional License:

A professional license is given to people who provide professional services, including doctors, lawyers, consultants, etc. It identifies as an official recognition for practising their profession.

Steps of Business Setup in Ras Al Khaimah

After knowing about the legal jurisdictions and business entities, you must wish to understand the procedure for company formation in Ras Al Khaimah. The steps are explained below. –

i) The first step in setting up a RAK business setup is deciding on the jurisdiction from the mainland, free zone, or offshore that suits the business best. 

ii) In the next step, the business owners need to select the business model from sole establishment, LLC, joint venture, etc, according to the nature and scope of the business.

iii) Another important decision that the business owners need to make is to choose the business name. The name must be unique, and it must be chosen according to the legal regulations made by the authorities of RAK.

iv) The business owners need to submit necessary documents and fill out application forms for certain verifications and regulatory approvals and to facilitate further business operations like visa processing, licenses, bank accounts, etc.

v) Now, in this step, the entrepreneur needs to apply for the relevant business license for business setup in Ras Al Khaimah. This license must complement the selected business activity as it signifies approvals issued by the government to function in the business.

v) In the fifth step, when the authorities think that the above steps are completed and the submitted paperwork meets the requirements, the officials issue the certificate of incorporation so that the owners can start their respective businesses.

vi) Lastly, there are certain post business setup in Ras Al Khaimah steps that the entrepreneurs need to consider, and they are the visa processing for employees, renting an office space, and opening a bank account to facilitate business transactions for a smooth business operation.

Reasons to Invest in Ras Al Khaimah

After all the details explained above, if you are looking for reasons to invest in RAK, then they are mentioned below –

  • Trade and Commerce.
  • Food Processing and Dairy.
  • Industrial and Manufacturing.
  • Tourism, Real Estate and Construction.
  • Warehousing, Cold Stores, Transport, and Distribution.
  • Mining, minerals exploration, extraction and quarrying projects.
  • International maritime-related industries and services, including maintenance and fabrication works.

Therefore, Ras Al Khaimah is an ideal destination for setting up businesses due to its fantastic location, business-pro environment, modern infrastructure, favourable regulations, etc. It provides successful opportunities for entrepreneurs and investors from all around the world. 

It is highly impressive for the easy process of business setup in Ras Al Khaimah and adds to the economy of the market. 

The RAK business setup can be smooth and quick if the business owners get in touch with a consultancy firm like Commitbiz because it is a one-stop solution that helps businesses not only set up their operations in RAK but also fulfil necessary documentation and legal formalities. Extensive domain experience and familiarity with the laws of the UAE help us take care of our client's passport, visa, and licensing requirements. We ensure that their task is completed swiftly without unnecessary red tape.

We can help you own your share in this growing economy. Contact us for business setup in Ras Al Khaimah – you’ll love the journey!

Frequently Asked Questions (FAQs)

1. How to start a business in Ras Al Khaimah?

To set up a business in Ras Al Khaimah follow these steps:

(1) decide on a business activity to apply for the license,

(2) finalize the corporate structure,

(3) obtain initial approval from the authorities,

(4) fill in an application and submit it with the documents.

2. Is having a physical office mandatory for RAK business?

If it’s an offshore company, virtual office is acceptable. And if a company wants to conduct their business within the UAE a physical office premises can be leased.

3. What are the benefits of business setup in RAK?

Few advantages of starting a company in RAK are:

  • Favorable geographic location
  • Availability of major transport hubs
  • High potential in terms of storage facility
  • Low rates for renting a space and energy supply
  • No currency restrictions

4. Which are the free zone parks in Ras Al Khaimah?

There are 4 free zone parks in RAK. They are:

  • Business Park
  • Industrial Park
  • Technology Park
  • Academic Park

5. What are the benefits of RAK offshore company?

There are several benefits of forming an RAK offshore company, like security of information, 100% repatriation of profits and capital, and exemption from all import duties.

6. Is it mandatory to have a local resident director in RAK?

No. There is no need of having a resident director or a resident shareholder for business incorporation in RAK.

7. Which are the business licenses available in RAK?

There are 3 types of business licenses available in RAK:

(1) General Trading License,

(2 )Professional License, and

(3) Industrial License.