Company Formation in RAK Free Zone
Company Formation in RAK Free Zone
The United Arab Emirates is primarily known to be the best destination for tourism, colossal skyscrapers and deluxe lifestyle. Dubai essentially the heart and soul of UAE provides entrepreneurs with amazing opportunities to invest in numerous trades related ventures. One such opportunity is company formation in RAK free zone.
Each year Dubai attracts interest of the foreign investors from all over the world due to its unparalleled economic growth in the field of real estate, tourism and multiple business ventures. Dubai has greeted more than 200 nationalities globally due to its integrated approach towards different ethnicities.
In order to capture interest of foreign investors, Dubai has created a large number of free zones for the shareholders who are interested in getting 100 % ownership of their business. Apart from this, these free zones also offer no corporation tax and personal tax, complete repatriation of capital invested and there is no currency restriction as well as 100 percent exemption on all import and export duty. By establishing your set up in Dubai free zones you can also get plenty of openings in vital guaranteed growth and many other opportunities of wealth increase by networking and cooperation.
Dubai free zones exempt taxes for a period of 15-20 years for new business. These free zones are known as tax free zones or duty free zones. There are around 30 free zones in Dubai and each of these free zones has its own set of prerequisites for office space and activities. There are a number of free zones in UAE such as, RAK free Zone, Dubai silicon Oasis Free Zone, Ajman media city free zone, Dubai airport free zone, Dubai aid city free zone, Dubai Internet City Free zone, Dubai media city free zone, Dubai multi commodities centre and Dubai maritime city free zone, metals & commodities Free Zone and so on are some of the well known free zones where you can set up a company.
Free Zone Company
Free Zone Company is a sovereign business entity with its own exclusive set of rules and regulations. Each free zone is permitted to their perform t activities within the free zone or outside UAE. The basic difference between mainland and free zone is that Free Zone Company cannot carry out its business in non-free zone without the help of a local agent whereas a mainland company can operate freely anywhere in UAE. The fundamental reason that foreign businesses select a free zone venture is to obtain complete ownership benefits and make use of the top-notch infrastructure and savor tax exemptions.
Why prefer to set up in a free zone?
If you intend to begin a business in the UAE, there are a plenty of reasons to select a free zone.
Setup in free zone is uncomplicated:
Free zones set up process are particularly simple and easy. The application procedure for free zone setup depends on nature of activities in a selected free zone. Businesses essentially will produce some necessary documentation such as passport copies and business paperwork. The whole process will take about a week or so.
Tax and duty:
The taxation structure one of the most interesting reason why businesses set up activity in a free zone. Free zone arrangement bid 0% corporate and personal tax, VAT exemption And apart from that, the Free zone businesses also offers immunity on import and export tax too and can carry out business with no currency restrictions.
Introducing a new set up in a free zone offers foreign investors absolute company ownership which sets free zone to be ideal option for business community.
Conducting business within the UAE:
Free zone businesses are not permissible to operate directly in the UAE’s local market; however this has been easily dealt with. You can perform business with a locally selected distributor whose job will be to trade your merchandise and services in to market and in response you have to pay him certain fee for his services. More preferably, commence your business in a free zone and later open branch offices in the UAE. These branch offices can trade your products within the UAE mainland.
Support and assistance:
Free zone authorities are set to offer support all through the company set up. Several free zones propose support in application process for visas for both shareholders and dependants i.e. Spouse or other staff. Apart from that assistance is provided with opening corporate bank accounts and free zones also provide business advice and networking support to aid fresh start ups to achieve ultimate success. Finally, free zone does not disclose any of the shareholder details to general public
Ras Al Khaimah free zones:
Ras Al Khaimah free zones are the most favored destinations for company creation due to their economical approach, tax free status, and tolerant government strategy toward businesses. The government body that is in charge for issuing and registering licenses to foreign companies is the RAK Free Zone Authority.
Exclusive Free Zone Parks have been setup by the Ras Al Khaimah Free Trade Zone Authority to consider the shareholder requirements for offices, land & warehousing services. These free zones are built at various locations across the Ras Al Khaimah area and comprise of Technology Park, Business Park, Industrial Park, and Al Ghail Park. Each RAK free zone accommodates detailed business interests and is fully operational to meet the investor’s needs.
Business setup in RAK freezone:
Since RAK is not chiefly reliant on the traditional oil-based economy and has various industrial sectors. The industrial sector provides key support for viable growth. With various SME’s coming up, the quantity of imports has very deeply reduced. A concrete infrastructure therefore does not only aid in entertaining national income and put in extra value to local infrastructure but also provide to communal needs in terms of intra-national products.
Trade sector is also thriving, with mutual trades occurring between many developing nations of the world.
Top-notch real estate and urban planning projects are routine work in Ras Al-Khaimah. The government intends to be future oriented and revolutionary in terms of infrastructure and wants to make every effort for architectural brilliance. Therefore, the construction sector remains to be the answer for success.
Banking and investment sector
Numerous monetary institutions organizations and banks operate in this sector. Whether it is assets management through various investment portfolios, allocating loans or currency exchange, there is certainly a market for it. Insurance and reinsurance companies are also upcoming markets within this sector. Housing investments, saving funds, and securities market are also feasible opportunity for investors planning to set up footing in Ras Al-Khaimah for business.
Although a huge number of tourists favor visiting Dubai and Abu Dhabi for great adventures, Ras Al-Khaimah tourism is a potential candidate for the country’s tourism.
Every nation has to be self-reliant in terms of food products. So, farming produce leads to society’s wellbeing and riches. Agricultural is an prospective option for a company willing to set up in RAK free zone.
This service sector is the booming field with telecommunication sector being a herald in the service industry. The service sector is said to be a essential sector of the vibrant Ras Al-Khaimah economy by the government.
Investment opportunities offered in RAK free zone:
Foreign investors can invest in any business but with a maximum of no more than 49%. This does seems like disadvantage to business owners as they would prefer to have benefit of 100% ownership of the company in the UAE. But investors should not be bothered, as have an opportunity to own up to 100% business RAK free zone in sectors such as , Agriculture, Health, Tourism, Education, Information technology, Technical work services, Consultancy services, Sport and allied services, Industry, Development and exploitation of natural resource-oil, energy, mining and Cultural services.
Foreign investors can also acquire properties in certain areas of the RAK which is an additional advantage.
Benefits of opting for Ras Al-Khaimah
RAK free zone Company formation can be the top preference for company formation due to tax-exemptions and impressive connectivity to UAE. After Jebel Ali, RAK free zone is perfect location for company set up as it offers advance infrastructures of port and various freezone. Following are the list of advantages that Ras Al-Khaimah offer to businesses in order to help them achieve success.
- Provision of 100% foreign ownership
- Restriction on repatriation of capital or profits is none.
- Open-minded economic policies that favors businesses
- Minimum utility charges: electricity, water and gas utilization charges
- Tax exemption on imports duties
- No income tax on individuals
- No tax on import of heavy equipment, heavy machinery, spare parts and raw materials
- Quantitative quota on imports is none
- Simple lease procedure at nominal charges for lands allocated for industrial use.
- No currency exchange restriction and on overseas profit transfer
- Flexible immigration laws and residence for skillful and unskillful labor
- Straightforward resident permits for investors and dependents
- Easy incorporation process for companies
The companies that can operate in Ras Al-Khaimah within the legal business structure are:
- Free zone limited liability establishment or commonly known as FZE is a sole shareholder limited liability company
- Free zone company or FZC is several shareholder limited liability company that is set up with a maximum of 2 to 5 shareholders
- Branch of a overseas company
- Branch of a local UAE company
Licenses available in RAK free zone:
Standard trading and General trading licenses
These type of licenses permit you to import and export goods to and from UAE. You can import goods and be able trade them to other UAE businesses who will be selected as your Agents or Distributors.
Standard trading license include up to 2 different types of goods, for example: food, makeup and construction materials.
General trading license permits you to import and export any products without any restrictions. The cost of general trading license for individual shareholder is around AED 81000 and for corporate shareholder it is around AED 86000.
This license permits you to import raw material, manufacture, process, finish, package and export goods. For commercial license the cost for individuals is around AED 49000 and for corporate license the cost is around AED 54000.
Consultancy/Services and other Professional licenses
This type of license is applicable to various professional services such as consultancy, design, IT development and many others. RAK Free Zone has the biggest activity list in terms of professional services and you can certainly find an appropriate business activity for your company.
This is appropriate in case you intend to conduct services or consultancy for any industry. The cost of acquiring this type of license for individual is around AED 49000 and for corporate license it is around AED 54000.
Step of applying for foreign investment application:
- First step is to fill up investment license application
- Secondly, put together all required compulsory documents with the application
- Then submit application and documents to customer service in registration and commercial licenses department
- Finally, Study of documents by related authority in business development and investment promotion department.
The processing time for RAK Free Zone company formation will take from 2 to 4 weeks.
RAK free zone parks:
Within the Ras al-Khaimah free zone, there are four business parks situated to support different activity type.
- Business park: For business and corporate offices
- Academic zone: Educational related business
- Technology park: For manufacturing and trading
- Industrial park: For heavy manufacturing industries
Set up process in RAK free zone:
Setting up a company in RAK free zone takes a very methodical route, being guided by the Emirates laws. The business formation process follows these steps:
- Determining the business activity type
- Blueprint of detailed business plan
- Devising a name for the company, and reserving it
- Depositing the mandatory minimum capital amount in the bank account of the company in RAK free zone
- Deciding the company’s workforce required for the set up
- Completing business registration
- Taking care of the licensing requirements
- Acquiring the shareholder(s)’ signatures on the company formation documents and with conclusion of other business setup formalities in the presence of RAK free zone authorities.
Documentation required for RAK free zone company formation:
- Proof of reservation of business name
- Proof of initial approval for business operation
- Copies of passports of the shareholders
- CV of the manager and his passport copy
- Each shareholder’s and manager’s personal Information sheet
- Lease agreement
- Third party approval for operation of business, if applicable
So, this is your guide to company formation in RAK free zone.