Skip to main content

Ras Al Khaimah International Company (RAK IC): Overview.

Posted in , .
Ras Al Khaimah International Company (RAK IC): Overview

Ras Al Khaimah International Company (RAK IC) is a specific type of company structure established in the emirate of Ras Al Khaimah, United Arab Emirates. It offers various business benefits, including ease of setup, tax advantages, and a favourable regulatory environment. This guide provides an outline for businesses considering establishing an international company in RAK, including insights into the benefits, requirements and setup process.

Key takeaways:

  • The RAK international company provides businesses with 100% foreign ownership and attractive tax exemptions.
  • At least one director and one shareholder is required.
  • The company must have a registered office in RAK as the official address for all notices and communications. Additionally, registered agents are essential to the incorporation process and ongoing compliance.

Entity information

Among the various entity structures available in the United Arab Emirates (UAE), the international company is particularly favoured by foreign entities looking to set up operations or establish a legal presence there. The UAE, comprised of seven emirates, has been actively working to attract international investments, and the international company structure is one of the avenues through which foreign entities can operate within the country.

Foreign entities opting for the international company structure can benefit from streamlined processes, enabling quick and efficient setup. This choice provides access to the burgeoning UAE market and strategically positions businesses to leverage the country’s diverse business opportunities.

RAK IC benefits

The benefits for a RAK international company include the following:

  • 100% foreign ownership
  • No personal or corporate income tax
  • Fast and efficient setup
  • Strategic location offering connectivity to major logistical hubs
  • Easy access to markets across the Middle East and North Africa (MENA), Europe and Asia
  • Wide range of business and industrial facilities
  • One-stop shop for all government services

Restrictions on activities

The UAE’s Companies Law specifies the activity that ICs may engage in while operating under its jurisdiction. Although ICs have more freedom to do business, major restrictions remain.

RAK international companies are restricted from conducting banking business and operating as insurance or reinsurance companies, insurance agents, or insurance brokers in the UAE and Free Trade Zones FTZ. It must receive the required licence from the relevant UAE authorities to conduct trade or other commercial activities outside of the RAK FTZ. To undertake banking or insurance operations outside the FTZ or UAE, the international company must show that it has received the appropriate licence from the relevant authorities. Regarding its inability to do so, neither the FTZ nor RAK authority will be held liable.

Incorporation requirements

  • Directors: At least one director is required, and corporate directors are allowed. The directors can be of any nationality. Their responsibilities and powers are outlined in the Memorandum.
  • Shareholders: A minimum of one shareholder is required, and corporate entities are permitted to serve as shareholders. The RAK ICC does not allow the use of bearer shares.
  • Authorised capital: The required minimum authorised capital is AED 1,000 and must be paid in full.
  • Registered office and agent: The RAK international company must have a registered office in the RAK. The registered office must be the address for all notices and communications. Registered agents are also required and have an essential role in the incorporation process and maintaining compliance.
  • Name and language requirements: The company name, memorandum and articles must be in English. Companies must ensure that their names are identical or similar to existing entities, contain registered trademarks not held by the company, and are offensive or misleading.

Incorporation process

  1. Obtain RAKICC approval for the company name and business activities before company formation.
  2. The registered agent must submit an application to the Registrar along with the required documents, including:
    1. Memorandum of Association (MOA) or Articles of Association (AOA)
    2. Certificate of incorporation
    3. Board resolution and power of attorney
    4. CVs of shareholders, directors and secretary
    5. Passport copies of directors and shareholders
    6. Proof of address of directors and shareholders
  3. Pay the registration fees and any incorporation-related costs as required.
  4. The Registrar will register the documents and give the business a special number.
  5. The Registrar will provide the company with a certificate of incorporation.

Incorporation duration

The incorporation time usually takes one to two weeks.

Compliance

  • Disclosure of beneficial ownership: The disclosure of beneficial ownership to authorities is required. This policy aligns with the privacy and confidentiality provisions that protect the interests of business owners and stakeholders.
  • Classes of shares permitted: Various classes of shares are allowed for incorporation, including ordinary and preferred shares. Shareholders can also choose shares with or without voting rights.
  • Taxation: They are not liable to capital gains tax, corporate income tax, distribution withholding tax.
  • Licence fees: The licence fee is AED 3,000 on incorporation and AED 3,500 upon renewal.
  • Financial statement requirements: The RAK International company must keep detailed accounting records that appropriately show and validate its transactions. These records must include information that allows for the accurate disclosure of the international company’s financial situation at any time. Furthermore, the records are meant to assist the directors in confirming the compliance of any accounts prepared by the company. Every company must keep accounting records for seven years from the creation date.

Conclusion

The RAK international company is optimal for global entities, offering streamlined incorporation, 100% foreign ownership and strategic advantages. While enjoying operational freedom, compliance with specific regulations is crucial, especially in the banking and insurance sectors. With tax exemptions and reasonable fees, the offshore company is an appealing choice for companies seeking rapid international expansion.

Set up an RAK IC with Acclime

Acclime plays a pivotal role in facilitating and optimising the establishment of an RAK international offshore company. Our expertise ensures a smooth journey through the incorporation procedure, from securing RAKICC approval for company names and business activities to submitting requisite documents to the Registrar.