Ras Al Khaimah: Country and Foreign Investment
Economy and Currency
With relatively small mineral reserves in Ras Al Khaimah, the oil and gas industry has not played a major role in the developments of the emirate’s economy. Nonetheless, vast deposits of limestone in the mountain region have been exploited and Ras Al Khaimah is one of the region’s largest producers of cement, and one of the world’s largest suppliers of ceramic products; RAK Ceramics, which launched in 1991, produces 200,000 square meters of ceramic and porcelain tiles per day and exports to more than 135 countries.
With industry forming a major component of the local economy, Ras Al Khaimah is the UAE’s manufacturing centre, and other products made there include pharmaceuticals, steel, aluminium fabrications, DVDs and glass. Industrial growth has been encouraged by the creation of the Rak Al Khaimah Free Zone and the government is now seeking to encourage international services-orientated investors. In 2007, the RAK Investment Authority (RAKIA) launched an offshore business registry called RAK Offshore, or the RAKIA Free Zone, with the aim of providing international investors with a low-cost, hassle-free International Business Company product with few restrictions, and to lure investors looking for an alternative to traditional offshore financial centres. Regulations are expected soon to include various types of trust, foundations, collective investment schemes and offshore banking activities to be conducted from the RAKIA offshore zone.
RAK statistics are weak, but growth is believed to have been strong over the last five years, continuing at a rate of 8 percent in both 2012 and 2013.
Ras Al Khaimah has been assigned ' A1' short term and 'A' long-term foreign and local currency sovereign credit ratings by Standard and Poor`s rating agency. The outlook is stable. The ratings are underpinned by the relatively strong economic position of Ras Al Khaimah citizens. GDP per capita is thought to exceed USD20,000 at purchasing power parity.
The UAE dirham is freely convertible and is linked to the US dollar. The current exchange rate is AED3.67 = USD1 and no revaluation has occurred since 1977.