Ras Al Khaimah: Law of Offshore
The Ras Al Khaimah Investment Authority (RAKIA) was constituted under an Emiri Decree in 2005 as the vehicle to facilitate and promote investment and economic activity in the fast-growing emirate. RAKIA’s role is to develop and manage the industrial parks which include the free zones and industrial zones in the Al Hamra and Al Ghail areas of Ras Al Khaimah. Within four years of its launch, RAKIA had attracted some US$2.5bn worth if investment in industrial projects in Ras Al Khaimah.
In 2007, RAKIA launched an offshore business registry called RAK Offshore, providing international investors with a low-cost, hassle-free International Business Company option with few restrictions, and with the aim of attracting investors looking for an alternative to traditional offshore financial centres. For RAKIA offshore companies there are no restrictions on the number of shareholders or directors, and they are under no obligation to hold an annual meeting or to file audited accounts. The only information displayed on the register is the name of the company and the date of incorporation, thus a high degree of confidentiality is maintained.
RAKIA offshore companies cannot conduct business locally except with those supplying accounting, audit, legal and banking services, and staff cannot be employed locally. RAKIA offshore companies can acquire local real estate, but they are most suitable for international activities such as trading, consulting, inter-group financing, holding company activities, intellectual property, investment, shipping and e-commerce. RAKIA offshore companies are also useful for accessing the UAE banking system.
Because there is no ‘special’ tax exemption regime in Ras Al Khaimah – a no-tax emirate regardless of company status - companies incorporated in the RAKIA offshore zone may also take advantage of the UAE’s network of double tax agreements, which includes China, France, Germany, India, Italy, Malaysia and Turkey, among other countries.
More than 2,000 companies had registered in the RAKIA Free Zone in the first two years after its launch, attesting to the popularity of the regime. The RAKIA international business regime is established by the RAK Offshore Regulations, 2006. Incorporation typically takes one day and costs US$950 regardless of share capital or type. Annual registration costs US$650.
Regulations are expected soon to allow the registration of trusts, foundations, collective investment schemes and offshore banking services in the RAKIA offshore zone.
In 2007, the RAKIA announced that it is to develop a modern complex known as the RAK Financial City, which is intended to become the home of the RAK Investment Authority’s offshore facility. Developed on an area of 320,000 square meters, it will include 12 towers ranging from 25 to 65 floors. Three of the towers will have offices, eight will be given over to residential use and the remaining tower will be a hotel. The area will have parking facility for over 10,000 cars. The project is being developed with an investment of AED3 billion.