RAK FREE ZONE COMPANY FORMATION – RAK FTZ

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    A HIGHLIGHT OF RAK FREE TRADE ZONE (ONSHORE) COMPANY

    RAK Free Trade Zone Company formation - UAE DubaiRAK (Ras AL Khaimah) edges out as one of the 7 Emirates in the UAE (United Arab Emirates).

    The Emirate is strategically situated in the farthest north UAE region. RAK is within a close proximity to Dubai as it is only 45 minutes drive from Dubai. The Emirate is connected to other Emirates by express highways that have been built in light of global standards on highways. This Emirate sets itself apart from other emirates due to its steady growth and its centralized contributions to the magnificent UAE economy.

    The main economic activities in the emirate include manufacturing, inward foreign investments, capital flows & exchanges and trade among other economic activities. The best thing about RAK is that it is affordable both to live and trade in the emirate. This is because of the fact that the cost of living and business costs are very low and thus easily affordable. This is in comparison to Dubai and consequently RAK provides higher and better profit margins for business people.

    The establishment of RAK FREE TRADE ZONE authority dates back to the year 2000 and it edges out as one of the leading free trade zones in UAE. In addition to this, this free trade zone hosts not less than 7000 active companies. Due to the great reputation and recognition that the free trade zones enjoy, they have received a great preference as the best business hub to trade in across Lake the easy accessibility of the zones has had a great impact on attracting new investors and business people to trade in the zones.

    LICENSE TYPES

    Industrial: permits holders to deal in importation of raw materials, packaging, processing, manufacturing, assembling and exportation of finished products to different global markets. The license only allows its holders to trade in only 1 product line.

    General trading: holders permitted to import, export, store goods in warehouses and also engage in the distribution of the goods. Holders are allowed to engage in different business activities (no limitations to trading).

    Commercial: holders allowed to import, export warehousing and distribution of goods. Holders allowed to either engage in 2 different activities or in 7 similar business activities.

    Consultancy / services: free to engage in different types of management, real estate, marketing, industrial consultations and logistics. Holders allowed dealing in 2 different consulting services.

    Different licenses are issued for people who business people whose trading activities fall into different categories. For example, a trader intending to offer consultancy services and commercial services is issued with 2 licenses, each for the respective activity.

    IMPORTANT POINTS TO CONSIDER WHEN ESTABLISHING A BUSINESS IN RAK FTZ

    It is required that every company operating and trading within the RAK FTZ should be licensed with the respective business or trade license. These licenses are time- based permits that authorize the trader to do business in the zone for a specified time frame;

    • Companies whose licensing have been provided for by RAK FTZ are prohibited from trading in the UAE market. The company has to appoint a local agent/ distributor to undertake business activities and transactions in the UAE market;
    • Each license comes with a one year validity commencing from the license issue date. For license renewal purposes, it is required that businesses should submit their annual audit reports;
    • Rates are not fixed but rather are subject to revisions from time to time. Licensed companies are to be officially informed of the revisions when renewing their business licenses.

    RAK FREE TRADE ZONE COMPANY FORMATION FORMS

    Free Zone Establishment: single owner/ shareholder.

    Free Zone Company: 2-5 partners/shareholders.

    Foreign or Local branch: RAK foreign or local branch.

    NOTE 1: For local and foreign companies, it is required that the Parent company should be in existence for not less a year.

     

    KEY BENEFITS

    • Full foreign ownership;
    • Full repatriation of capital & profits;
    • Flexible labor laws;
    • Exemption of income tax;
    • Exemption of personal tax;
    • Exemption of VAT and corporate tax;
    • Abolishment of foreign exchange controls;
    • Application of Double Taxation Agreements;
    • Updated telecommunication facilities, infrastructure and supportive utilities;
    • Employment visa and or investor’s / partners’ visa.
     

    RAK FREE TRADE ZONE COMPANY FORMATION CORPORATE & LEGAL FEATURES

    DIRECTOR

    Single Manager/ director. The same positions can hold both offices/ positions at the same time.

    SHAREHOLDER

    At least one shareholder (corporate bodies/ individuals allowed).

    ACCOUNTS

    There is a requirement that accounts should be prepared but as of now there is no provision for filing the accounts.

    SHARE CAPITAL

    At least AED 100,000 per shareholder as share capital for all licenses with the exception of General Trading Licenses. For a General Trading License, the minimum share capital stands at AED 150,000.

    OFFICE

    Businesses are required to rent an office in Ras Al Khaimah under an umbrella RAK FTZ company.

    LICENSE

    The validity of licenses is only one year after which renewal is annually after the expiry date of the current license. When applying for license renewals, it is required that businesses should submit audit reports.

     

    IMPORTANT INFORMATION

    • A UAE Residency Visa foreigner applying for a license is required to obtain a NO Objection letter that is to be provided by his/her sponsor before submitting the application;
    • Applicants applying for Consultancy Licenses need to submit their academic qualification papers as well as proof of professional experience in respect to the field of interest in RAK FTZ;
    • The validity of business licenses is a year after which the business should apply for either renewal or official deregistration. The former is done so as to avoid charged fines and other specified penalties;
    • When applying for renewals, businesses are required to submit audit reports that are prepared by registered UAE audit firms;
    • Amendment of licenses can be done upon request by their holders after paying the relevant fees as well as fulfilling the set approval processes;
    • RAK FTZ regularly inspects company facilities in line with assessing the activity levels of the companies;
    • Subleasing of facilities is prohibited;
    • Licensees are required to ensure that they fully comply with the set UAE customs regulations.