Incorporating a company in the UAE in the Ras Al Khaimah emirate in 2020. Options for starting a business in Ras Al Khaimah
In this article we will consider all options for starting a business in the UAE in the emirate of Ras Al Khaimah. Furthermore, we will discuss two options: either through incorporating a company in the UAE, in the emirate of Ras Al Khaimah, or without the incorporating a company.
Ras Al Khaimah (“RAK”) is one of the seven emirates which are constituents of Federation of the United Arab Emirates (UAE). RAK Emirate takes pride in its traditional lines of economy – shipbuilding and trade, and is at the forefront of mining, manufacturing and tourism industries. RAK is steadily growing and gaining credibility as an attractive hub for business with a dynamic and diversified economy.
Commercial incentives and the low cost of starting a business have been increasingly attractive for entrepreneurs engaged in a wide range of commercial activities.
RAK offers growth opportunities in all sectors of trade, including the provision of professional services. To ensure a paradigm shift from an economy historically focused on agriculture and fishing, RAK has successfully implemented and offers many of the commercial privileges that are used in neighboring emirates, such as Dubai, for example, the creation of free economic zones.
RAK offers a wide range of commercial and retail licensing types, including for commercial activities and professional consulting services.
The expected GDP growth of the emirate will be 3% in 2020 and 2.5% in 2021.
Location of the Emirate of Ras Al Khaimah
The emirate of Ras Al Khaimah is located in the northern part of the UAE on the coast of the Persian Gulf. RAK is highly regarded as one of the emirates which has been best preserved in its original form. RAK is located 50 minutes from Dubai International Airport (DXB) and 25 minutes from RAK International Airport. This is an emirate with picturesque nature: beautiful, massive mountains, red sand deserts and lush green plains, intersected by streams and lagoons. RAK is famous for its rich historical heritage dating back 5,000 years, and has well-preserved numerous historical places, forts and abandoned villages.
Government of the Emirate of Ras Al Khaimah
RAK government, led by His Highness Sheikh Saud bin Sakra Al Qasimi, ruler of Ras Al Khaimah, seeks to represent, support and protect the interests of the business community in response to the growth and expansion of Ras Al Khaimah as a competitive global economic hub.
The government is committed to creating a favorable business environment that supports business development and is actively engaged in promoting RAK as an international business hub. The RAK government is continuously simplifying the process of registering companies and making it faster.
What language is used in the emirate of Ras Al Khaimah?
The official language of the UAE is Arabic. However, English is widely used in business environment.
What currency is used in the emirate of Ras Al Khaimah?
The currency of the emirate of RAK is the same as the universal currency of the UAE – the dirham.
What religion is common in the emirate of Ras Al Khaimah?
Ras Al Khaimah emirate population:
The emirate of Ras Al Khaimah is a thriving investment destination, as well as one of the most interesting tourist destinations in the Gulf region.
You can open a business in the emirate of Ras Al Khaimah either in one of the free zones or outside the free zones.
Registration of a local company in the UAE in the emirate of Ras Al Khaimah
Let us now consider the option of incorporating a local company in the UAE in the emirate of Ras Al Khaimah, that is, a company outside of free zones.
Incorporating a business in Ras Al Khaimah emirate of UAE in the form of sole proprietorship
The sole proprietorship business form is actually identical with individual entrepreneurship. This is the least sophisticated business model in which individuals conducts business based on a license issued by the relevant authorities. This form of organization is called an “institution”, not a company, and a business is not treated as a legal entity separate from an individual entrepreneur.
As such, individual entrepreneurs fully bear personal responsibility for business obligations with their own assets.
The concept of sole proprietorship is governed by Federal Law on Commercial Transactions No. 18 of 1993 (“Commercial Code”), as well as RAK’s relevant local legislative framework.
Let us now consider the Sole Proprietorship types of business launched by UAE citizens and GCC citizens
In recent years, it has been an emerging practice when a citizen of the UAE obtains a license for sole proprietorship and allows a third party to use and benefit from this license on a contractual basis, including undertaking all the functions of business management and making a profit. However, this type of arrangement is not recommended because it is fundamentally illegal practice and issues are likely to arise if business relations between the parties deteriorate.
In addition, the rightful owner of the license will be bearing 100% liability for indebtedness towards any third party who may not be aware of the private arrangement in force.
Let us consider the Sole Proprietorship established by individuals who are not citizens of GCC countries:
Foreigners are allowed to set up Sole Proprietorship in the UAE. However, the law restricts the types of activities that a foreigner may engage in as an individual entrepreneur. Permitted types of activity include the following:
- Provision of medical services;
- Engineering and consulting services;
- Legal advisory services;
- Online consultations;
- Other similar services and non-commercial types of activities.
A foreigner establishing a Sole Proprietorship is required to appoint a local service agent. The contract with the local service agent should be certified by a notary. If a foreign entrepreneur does not have residency in the UAE, then the residency of such a foreigner in the UAE should be sponsored by the new business.
Thus, the procedures for creating Sole Proprietorship vary depending on the citizenship of the potential entrepreneur. However, the overall and key requirement for opening Sole Proprietorship is that a license for the intended activity must be obtained from the RAK Department of Economic Development.
Incorporating a local commercial entity in the Ras Al Khaimah emirate of UAE
In accordance with the Federal Law on Commercial Entities No. 2 of 2015, various legal forms of entities are offered for registering a business.
Let us now consider the various forms of companies available for registration in the UAE in the emirate of Ras Al Khaimah outside the free zones.
The main differences between the local commercial companies of the United Arab Emirates
- Should “local partners” (“local shareholders”) be involved?
Yes, the company is required to have a local shareholder.
- How many local partners should be involved?
At least one local partner should be involved.
- Duration of registration process for an LLC
Registration process for an LLC normally takes 10-14 days.
- Is there a requirement for the size of “local partner” share?
The share of a local partner(s) should be at least 51%.
- Under which conditions is any transfer of shares possible?
51% of shareholding should be retained by the local partner(s)
- Is it possible to get a UAE tax resident certificate for an entity?
Yes, UAE tax resident certificate can be obtained for a company.
- Which is the most popular type of entity?
Limited Liability Company (“LLC”) is the most widespread type of entity
- Is it possible to apply for UAE resident visas for shareholders and company employees?
Yes, it is possible to apply for UAE resident visas for shareholders and company employees.
- Who can act as a local partner?
- Citizens of the Emirates.
- Companies wholly owned by UAE citizens.
The cost of registering a local commercial company in the UAE (in US dollars)
- The cost of our services for UAE investor visa formation: $ 900
- Cost of employment card: $ 550
- Cost of charges when applying for an UAE visa for an employee of the company: from $ 825
- Cost of our service to amend the constituent documents of the company: $ 550
- Cost of our service of LLC registration: from $ 2,740
- Cost of our service for issuing an UAE visa for an employee: $ 900
- LLC incorporation duty: from $ 2,000
- Cost of the services of the “local partner” (“local shareholder”): from $ 3,560 per year
- Cost of our annual license renewal service: $ 1,000
- UAE investor visa issuance duties: $825
- Immigration card: $ 160
Forms of local commercial companies in the UAE
- Joint Liability Company
- Public Joint Stock Company
- Private Joint Stock Company
- Limited Liability Company (” LLC “)
- Simple Commandite Company
Company incorporation in Ras Al Khaimah, UAE, in the form of a limited liability company (with several partners)
The company legal form is limited liability company, abbreviated as LLC. This company is required to have at least two partners and no more than 50 partners. The liability of each partner is proportional to its share in the capital of the company. There are no minimum capital requirements.
This type of entity is similar to the Private Limited Liability company or “Ltd” in the UK. The LLC form of entity is mainly suitable for foreign investors and is often used by them when establishing a business in the UAE, in the emirate of RAK. However, it should be noted, that this form of entity cannot engage in banking and insurance activities, nor can it engage in investment activities carried out on behalf of third parties. Such activities can only be carried out by means of a Joint Stock Company .
- As a rule, LLC’s activities fall under the regulatory competence of the Department of Economic Development.
- Normally, the share of non-UAE and GCC citizens in the company cannot exceed 49%.
- The company is allowed to conduct business within the RAK and all over the UAE.
- When importing goods into the territory of the UAE, it is necessary to pay customs duties.
- Public offering for raising capital is not allowed.
- Although a foreign partner can usually own no more than 49% of the company’s equity, yet, day-to-day management of the company may be assigned to a foreign manager.
- Managers, including foreigners, can be shareholders of the company.
- In practice, the “local partner” may choose not to participate in the company’s activities and may issue a power of attorney to the foreign partner, assigning the latter his right to vote at the general meeting on behalf of the “local partner”.
- The memorandum of association may stipulate that profit and loss should be distributed using a proportion which is different from the ratio of shares in capital.
- It is necessary to appoint an auditor who is required to be accredited in the UAE.
- The auditor should be appointed by the general meeting (which is essentially a meeting of all shareholders of the company).
Company incorporation in Ras Al Khaimah, UAE in the form of a limited liability company (with single partner)
The sole participant of the company should be a UAE citizen, or a company wholly owned by UAE citizens. This partner does not bear full liability for the company’s obligations and is only liable to the extent of the authorized capital specified in the Memorandum. The main provisions of the law relating to the Limited Liability Company with several partners also apply to the Limited Liability Company with single partner. There are no minimum capital requirements.
Company incorporation in Ras Al Khaimah, UAE in the form of a partnership
The partnership consists of two partners (or more) – individuals who jointly and severally bear liability for the obligations of the company with all their property.
Only UAE citizens can act as partners in a general partnership. Thus, this form of business is not suitable for foreign investors who want to open a business in the emirate of RAK.
Company incorporation in Ras Al Khaimah, UAE in the form of a limited partnership
Such a partnership consists of one or several active partners, who jointly and severally bear liability for the obligations of the company, as well as one or more dormant partners, who bear liability for the obligations of the company only to the extent of their shares in the company’s equity.
Thus, in a limited partnership, foreigners can be dormant partners who do not actually play a role in company’s management. Dormant partners can participate in the administration of the company, however, they need to make sure not to give reason to third parties to believe that they are endowed with powers larger than that of the dormant partner, otherwise their liability will no longer be considered as limited.
Limited partnership management is entrusted to general (active) partners.
Company incorporation in Ras Al Khaimah, UAE in the form of a Public Joint Stock Company
In a Public Joint Stock Company, the capital is divided into current shares of equal value. Еessentially a company is similar to Public Limited Company in the UK. Company shareholders are only liable to the extent of the value of their shares. The nominal value of each share should not be less than 1 dirham (0.27 dollars) and not more than 100 dirhams (27.25 dollars), and the authorized capital should be not less than 30 million dirhams (approximately 8 million dollars). However, when it comes to companies in financial services and insurance sector, the minimum share capital of the company should be higher (the exact size depends on the type of activity).
One of the requirements when establishing a public joint stock company is the preparation of an agreement of the founders, a project or an invitation to a public offering, supported by a common business plan, an audit report, as well as a Memorandum and Articles of Association, which should comply with the model issued by the Securities and Commodities Authority (SCA).
Any deviation from the sample form needs to be pre-approved by SCA which governs the activities of public joint stock companies.
In addition, the name of the new company should end with PJSC. A public joint stock company should have at least five founders, and the management of the company should be vested in a board of directors consisting of an odd total number of directors, whose term of office should not exceed three years. Directors may be re-elected after their term of office.
The public joint stock company should have a chairman of the Board of Directors who is required to be a citizen of the UAE. In addition, most directors on the board should be UAE nationals. At least 10% of the net profit should be directed to the reserve account until the amount on this reserve account reaches half of the total paid-up capital of the company.
In addition, UAE citizens should own at least 51% of the company.
Founders must subscribe for at least 30%, but not more than 70% of the company’s share capital. If new shares are issued, then existing shareholders should be given the opportunity to subscribe to these shares in an amount proportional to their existing shares in the company.
There are additional requirements for the registration and operation of a public joint-stock company in the UAE, provided for by law, which must be taken into account by interested investors.
In recent years, public joint stock companies in the UAE have become increasingly popular, especially in the private sector, which is evidenced by the fact that currently more than 100 public joint stock companies exist in the UAE. This may be because this form of company allows businesses to attract significant amounts of capital, especially when it comes to large-scale projects. Also, this allows small foreign and local investors to participate in such projects. However, given the rather restrictive rules and control measures governing the establishment and management of a public joint-stock company in the UAE, as well as significant capital requirements, this form of company is not considered a suitable business option for most foreign investors.
However, if insurance or commercial banking activities are planned, the establishment of a public joint-stock company is a legal requirement, as no other company is authorized to carry out these types of activities.
For a business investing on behalf of third parties, either a public joint stock company or a private joint stock company should be established.
Company incorporation in Ras Al Khaimah, UAE in the form of a Private Joint Stock Company
A Private Joint Stock Company is essentially the same as a public joint stock company with the following differences:
- Minimum capital requirement: 5 million dirhams (1.4 million US dollars).
- The shares of a private company may become available for public offering only after the two financial years have elapsed, and only after conversion into a public limited company (as well as with the performance of other conditions).
- The company is controlled by the Ministry of Economy (as opposed to public joint stock companies, which are regulated by the Securities and Commodities Authority (“SCA”)).
- Only two founders are required.
Given lower capital requirements (AED 5 million), a closed joint-stock company is more popular with foreign investors than a public joint-stock company.
The procedures for registering a private company in the UAE are somewhat similar to those for registering a public company in the UAE, but this is a much simpler and faster process.
Unless the law requires a minimum number of shareholders, a company may be incorporated by a single legal entity and it may solely own this closed joint-stock company. Such an owner shall be liable for the obligations of the company only in the amount of the share capital specified in the Memorandum of the company. In this case, the name of such a company should end with the words “private joint stock sole proprietorship”.
Incorporating a Civil entity in the emirate of Ras Al Khaimah, UAE
In addition to local commercial companies, it is also possible to register a company in the UAE on the basis of the Law on Civil Transactions (“Civil Code”) – Federal Law No. 5 of 1985. This law provides for the registration of three forms of civil or professional entities, namely:
- Speculative venture partnerships;
- Mudaraba Companies;
- Business companies.
Speculative venture partnerships are a form of partnership by virtue of an agreement between one or more persons on the acquisition of property by credit, its sale with profit and the subsequent division of profit according to an agreement between them.
Mudaraba Companies – is a contractual arrangement, where one of the parties to the contract contributes a certain amount of capital, and in exchange the other party (“Mudarib”) contributes by his expertise for generating profit. Here “Mudarib” is considered as a proxy in capital sharing, as well as a partner in profit, and he alone will bear any losses incurred.
Although Speculative Venture Partnerships and Mudaraba Companies are called companies or entities, yet, from legal point of view they are considered as types of organizations that can be created through the Department of Economic Development. Instead, such organizations represent civil types of activities, rather than legal entities for doing business.
In contrast, Business Companies can be registered through the Department of Economic Development.
According to the UAE Civil Code, Business Companies are defined as companies in which two or more persons agree to commit to performing work and subsequently bear liability to third parties for remuneration if they are equally involved in the distribution of work, provided that the work is of a single and indivisible nature.
The main difference between companies established in accordance with the UAE Civil Code and local commercial companies is that the commercial companies are allowed to engage in commercial types of activities, while civilian companies may use of intellectual property investment, acquired information or the use of skills. For example, it can be carpentry, engineering consulting, hairdresser services, etc.
It should be noted that the fact that civilian companies do not practice activities of a “commercial” nature does not mean that they are nonprofit companies.
It is also worth noting that the licensing authorities of the emirate of Ras Al Khaimah allow the creation of a small commercial enterprise in the form of a Business Company, for example, small grocery stores and supermarkets.
The ownership of the Business Company must belong to two or more partners, provided that at least one partner must be a citizen of the UAE.
Opening a branch in the emirate of Ras Al Khaimah, UAE
A very popular method for foreign companies to obtain the right to 100% foreign ownership is to open a branch of the parent company. The Law on Commercial Companies contains provisions governing the establishment of branches of foreign companies in the UAE.
The branch is legally a part and constituent of its parent company and does not have a separate legal entity other than its parent company. Thus, the name of the branch will be the same as that of the company of which it is a part.
Branches, however, are required to have a “national service agent.” A “national service agent” may be an individual as well as a legal entity. However, if the agent is a legal entity, then such a legal entity should be wholly owned by UAE citizens. The National Service Agent does not acquire any rights and interests in the branch’s business, but would handle issues related to federal and local authorities, such as fulfilling immigration requirements on behalf of the business. In exchange for their services, agents usually receive a fixed annual fee.
One of the conditions for opening a branch in the UAE is that it can only participate in activities similar to those carried out by its parent company (provided that such activities are licensed by the relevant authority). It is important to note that the branch is not allowed to carry out a business of importing, exporting, manufacturing and distributing products of its parent company.
Prior to obtaining a license from the Department of Economic Development, the branch should be registered with the Ministry of Economy as the main regulatory body for registration of branches and representative offices. By obtaining a branch license by the Department of Economic Development the parent company is allowed to conduct business through the branch. The types of activities that the branch is allowed to conduct will depend on the type of license the branch has been granted, and more importantly, the activities of the parent company.
Opening a representative office in the emirate of Ras Al Khaimah, UAE
Representative office in the UAE is regulated by the Federal Law on Commercial Entities. Representative offices of foreign companies legally differ from branches of a foreign company in that the representative office is only allowed to promote the activities of its parent company. Therefore, if the parent company provides IT consulting services and opens a representative office in Ras Al Khaimah, then the representative office can only promote such services and facilitate the conclusion of contracts in the UAE, which differs from directly providing the service itself.
It should be noted that in addition to the above restrictions, the representative office has other limitations as well.
As in the case of the branch, it is necessary to appoint a national service agent when setting up a representative office.
Obtaining a business license in the UAE
All business activity in the emirate of Ras Al Khaimah carried out by any of the above types of organizations must be licensed by the Department of Economic Development. Certain regulated activities may require additional licenses from specialized regulatory bodies or certain ministries. For example, banks and financial institutions require special permission from the Central Bank, media companies require special permission from the National Media Council, and production companies require special permission from the Ministry of Energy and Industry.
There are three main types of licenses:
- Commercial license (all types of trade);
- Industrial license (manufacturing or industrial activity);
- Professional license (professional services, artisans).
Doing business in the UAE in Ras Al Khaimah without registering a company
Apart from the option of incorporating a company in the UAE, foreign entities can also trade in Ras Al Khaimah through importers and traders.
However, such arrangements are not particularly relevant for long-term trading activities in high volumes. Foreign manufacturers or traders who wish to import large quantities of goods on a regular basis to Ras Al Khaimah, may wish to appoint a local sales or commercial agent through the establishment of a “commercial agency”.
Unlike other jurisdictions, the UAE legal system as a whole distinguishes between two forms of “commercial agencies” – “registered commercial agencies” and “unregistered commercial agencies”. The main difference between them is the set of rules and regulations governing them.
Registered Commercial Agent in the UAE
A registered commercial agency is defined by Federal Law No. 18 of 1981 on the organization of commercial agencies as amended by Federal Law No. 14 of 1988 (the “Law on Agencies”), as representing the principal by an agent for the purpose of distributing, selling, offering or providing goods or services to UAE for commission or profit. The principal is defined by law as the manufacturer or producer or the exclusive accredited exporter or representative of the manufacturer.
According to the Law on Agencies, there are various advantages for an agent to have a registered service agency. Let us consider these benefits in more detail.
Registered Agents have the exclusive right to import goods that are the subject of an agency agreement. In the case of import of goods that are the subject of a registered agency contract by anyone other than a registered agent, the goods may be seized by the Customs Department if the agent or the Ministry of Economy does not agree to release them.
This also includes goods that have been imported by the principal. If the principal or any other person distributes or sells the indicated goods or services within the territory of the UAE, then such persons will have to pay compensation to the sales agent.
If the exclusivity of the agent is not the concern of the principal, then the restriction on the import of these goods by any third party also serves as a protection of the principal’s interests.
Registered commercial agents have the right to receive a commission for the sales they make, as well as for direct sales made by the principal or other parties, regardless of whether the agent contributed to such direct sales or not. Consequently, the principal must ensure that the agency agreement clearly defines the products that participate in the agreement and the respective territory.
Inability to terminate the contract
The key concern of principals is that the “Law on Agencies” does not allow a principal to terminate such agencies without a justifiable reason, which is not a specific condition. However, recent court decisions referred to a justifiable reason, including, among other things, gross negligence, engaging in sale of competitor products in violation of the agreement, and assignment of the agency to a third party, as well as failure to meet sales targets. It is at the discretion of the Ministry of Economy to decide whether there is a justifiable reason. However, the decision of the Ministry is subject to consideration in judicial procedure. The principal will also need to provide a justifiable reason to refrain from renewing the “trading agency” agreement after its expiration. The unlawful termination or refusal to renew the agreement on the trading agency may lead to a requirement for the principal to compensate the former “trading agent” any losses that the agent may have incurred.
Unregistered commercial agent in the UAE
An unregistered commercial agreement, on the other hand, is an ordinary principal-agent relationship that does not embody benefits of the protection under the Law on Agencies, since such relations do not fall under the Law on Agencies. An unregistered commercial agency is established on the basis of an agreement between the principal and the agent, and there are no additional procedural requirements to make such an agreement valid.
Thus, the potential agent most likely will seek to establish a registered commercial agency in order to take advantage of the unregistered agency, provided that the relevant criteria are met.
While the Law on Agencies stipulates that any commercial agency not registered in the register of the Ministry of Economy is considered invalid, and therefore no claims are subject to recognition, nevertheless, unregistered commercial agencies are deemed to be valid commercial contracts in respect of which the parties must comply with the conditions established by them.
Three types of unregistered commercial agencies can be established, including contracting agencies, commission agencies and commercial representations, as provided for in the Commercial Code. Unlike a registered commercial agency, unregistered commercial agencies do not require involvement of a UAE citizen or a commercial company wholly owned by UAE citizens. However, there is a requirement that “unregistered agencies” be licensed to conduct trading activities in the UAE. In addition, the principal is allowed to terminate the agency agreement in a number of cases, including cases when the agency agreement expired after the conclusion of the fixed-term agency agreement.
From the principal’s perspective, an unregistered agency may be a more lucrative option.
Company registration in the UAE in one of the free zones of the emirate of Ras Al Khaimah
In addition to the general jurisdiction in the emirate of Ras Al Khaimah, there are also free zones with their specific jurisdictions that offer various types of business licenses. While these free zones are geographically located within the emirate of Ras Al Khaimah, they are considered separate legal jurisdictions, usually having their own (non-criminal) laws.
In addition, the following are characteristic features of companies in the free zones of Ras Al Khaimah:
- Companies are governed by special laws (rules and regulations) of each respective free zone.
- Companies are regulated by the administration of the relevant free zone.
- There are no restrictions on foreign ownership of companies.
- Companies cannot conduct business in the internal territory of the UAE outside the free zone (except when an additional special license has been issued for this).
- There are no customs duties on goods imported and exported from the free zone.
- Establishing a company in the UAE’s free zones has certain additional advantages compared to establishing a local company, for example, a simplified registration process and a one-window for various government services, such as licensing, issuing UAE resident visas and postal services.
The main free zones in the UAE in Ras Al Khaimah
Company incorporation in the UAE in the free zone “RAK Economic Zone” (“RAKEZ”)
The RAKEZ Free Zone was created by Law No. 2 of 2017 as a result of the merger of the RAK Free Trade Zone (RAKFTZ) and RAK Investment Authority (RAKIA) and is one of the most cost-effective free economic zones in the UAE. A unique feature of the «RAKEZ» is the that it includes:
- Business Park
- Industrial Park
- Aviation Park
- Academic zone
- Media Zones
RAKEZ offers a special dual licensing , whereby the investor with a free zone license issued in RAKEZ, can obtain an additional license for operating on the territory of the emirate, outside the free zone. Such a license is issued by the Department of Economic Development for the same office in the free zone. In RAKEZ a special system is in place to ensure facilitated process of licensing for operation in the free zone, as well as for operating outside the free zone through a dedicated branch “Department of Economic Development”, located within RAKEZ.
Opening a company in the UAE in the free zone “RAK International Corporate Center” (“RAK ICC”)
RAK ICC Free Zone is a zone that offers offshore jurisdiction. It was created by Decree No. 4 of 2016 as part of the merger of RAKFTZ and RAKIA. Companies can be registered and operated for various business purposes, for example, ownership of foreign financial and real estate assets, inheritance planning, establishment of holding companies and special designation companies, to register vessels and optimize taxation.
Get in touch with us at [email protected] if you wish to register an offshore company in the UAE at RAK ICC !
Opening of the company in the UAE in the “free zone the RAK Maritime City »
The RAK Maritime City Free Zone was established by Decree 21 of 2009. “RAK Maritime City” is the closest free zone to the Strait of Hormuz, in which there are deep-sea quays.
Possible types of companies when registering a company in the UAE in one of the free zones of Ras Al Khaimah
As a rule, the following types of businesses can be registered in free zones:
- Free Zone Establishment – is a limited liability company with one shareholder.
- Free Zone Company – is a limited liability company with no less than 2 and no more than 5 shareholders, or depending on a free zone – with no more than 50 shareholders.
- Branch office of a foreign company or local company.
- A company limited by shares (offshore company “RAK ICC”), with at least one shareholder, one director and one secretary.
Offshore companies in “RAK ICC” can have one or more shareholders and are usually used as non-operating (dormant) holding companies that own assets, including shares and authorized real estate.
Thus, offshore companies are not granted any licenses from RAK ICC to conduct any operations and are not entitled to obtain visas, since there are no employees in offshore companies, considering their non-operational nature.
Accordingly, an offshore company does not need an office space. The “registered address” of an offshore company is the address of its “registered agent”. Offshore companies in RAK ICC are required to have a registered agent. The registered agent is pre-approved by RAK ICC and represents the company on RAK ICC in all matters.
Possible types of licenses when registering a company in the UAE, in one of the free zones of Ras Al Khaimah
Any and all activities carried out by all types of companies in the free zones of Ras Al Khaimah (with the exception of offshore jurisdictions, since such companies are usually non-working holding companies) require one or more types of licenses.
Licenses for companies established in free zones are issued by the relevant authority. Certain regulated activities may require additional licenses from specialized regulatory authorities and/or relevant ministries.
Free zones offer the following types of licenses.
- Industrial license. Permits production, processing, assembly, packaging, etc.
- Trading license. Permits import, export, distribution, warehousing, trade.
- General trade license. Permits all types of trade, import, export, warehousing and distribution of goods.
- Commercial license. Permits activities such as contracting, repairs, maintenance, rental, shops, restaurants, etc.
- Consulting/service license. Permits any type of management, industrial advice or professional services, including real estate advice.
- Media License. Permits all types of media and communication services.
The type of license depends on the type of business. Customers whose activities fall under different categories must obtain different licenses for each category of activity, subject to approval by the administration. For example, a licensee carrying out both trade and production will have to obtain two licenses – one for trading activity and one for production.
Contact us to register a company in the UAE! We will also help to open a bank account, obtain a UAE resident visa and provide other related services! Contact us at e – mail [email protected].