Located at the ideal geographical position in the North of the UAE, between the natural fortress of the Hajar Mountains, Ras-Al-Khaimah is one the most business-friendly states of the UAE. Due to the business-friendly ecosystem and ideal location, it attracts a significant number of foreign investors and entrepreneurs from all over the world.
Its infrastructure further adds value to its fast-paced economic activities. Some of the salient features of its infrastructure include well-equipped seaports, International airports with cargo facilities, and state-of-the-art highways making it an eye candy for local and foreign investors.
In this article, we will discuss how you can step into the RAKIA business setup and enjoy the perks of UAE’s booming economy.
What is Ras Al Khaimah Investment Authority Free Zone (RAKIA)?
RAKIA abbreviated as Ras Al Khaimah Investment Authority (RAKIA) is licensing entity that played a vital role in the economic sustainability of UAE’s state Ras Al Khaimah.
Introduced by a decree formulated by Ras Al Khaimah’s (then) ruler in 2005, RAKIA brought an objective of skyrocketing the investment opportunities in Ras Al Khaimah. This debut came in association with other entities such as offshore businesses to open new opportunity corridors for sustainable and fast-paced economic growth. In 2017, RAKIA was declared the part of Ras Al Khaimah Economic Zone (RAKEZ) early 2017.
Due to this growth-centric vision, company formation in RAKIA offers a variety of perks and advantages for foreign investors that we are going to discuss in the following article.
Benefits of Setting up a Business in RAKIA Free Zone
By laying down a business setup in RAKIA, you can leverage a variety of perks offered by the Emirate state of Ras Al Khaimah. If you are weighing your wings for company formation in RAKIA, you are going to experience a range of remarkable advantages as listed below.
- Flexibility – Opting for a RAKIA business setup with one of the most seekable trade locations, you will have the liberty to operate your business and trade with minimum restrictions and regulations compared to any other UAE state. After RAKIA’s integration with RAKEZ, you need to abide by very mild and business-friendly Rules and Regulations set by RAKEZ.
- Confidentiality & Privacy – Out of many attractive aspects of company formation in RAKIA, its strict business privacy and confidentiality policies are among the top ones. The confidentiality and Non-Disclosure Agreement (NDA) policy as outlined by RAKIA is one of the most convincing factors that attract foreign investors to the RAKIA Free Zone. The UAE government has made promising progress in further strengthening the business laws and infrastructure to safeguard the confidentiality of RAKIA business setups.
- DTA – Abbreviated as “Double Taxation Agreement”, DTA is the pact between the UAE government and other countries to enable businesses to trade between two countries without any inclusion of import or export duties. RAKIA’s business setup has gained the limelight because of the UAE government’s initiative to sign DTA with different countries. This significant step turned out to be a primary factor that entrepreneurs and offshore investors are increasingly opting for company formation in RAKIA.
- Asset Protection – RAKIA offers an additional benefit in terms of asset protection for overseas business setups to create a firm vacuum between creditors and business assets. RAKIA has defined a strict set of regulatory compliances to safeguard business assets to create a secure and trustworthy ecosystem for businesses.
- Legal Protection – Ras Al Khaimah’s business laws ensure that before enabling the corporate status of any business, RAKIA must validate the entire business setup journey at each phase. The state even remains instrumental in protecting the company’s possession at any stage of the business lifecycle.
- Prime Geostrategic Location — A remarkable geostrategic position of Ras Al Khaimah is another convincing factor with signal-free motorways and logistic centers. RAKIA along with other Free Zones in Ras Al Khaimah attracts foreign investors by offering a tax-free business arena.
- 100% Business Ownership – By forming a company in RAKIA, you can leverage complete ownership of your company without any need to have any local sponsor or shareholder. It will give you total control and freedom to sail your business voyage on the path that aligns with your vision.
Facilities Available in Ras Al Khaimah Investment Authority Free Zone
The recent amendments in Ras Al Khaimah business and corporate laws have made RAKIA a center of various facilities that align with the interest of investors up to a notable extent.
- Office Spaces for Startups – Entrepreneurs can leverage the low-cost office spaces in RAKIA. They can choose from a range of shared & furnished office spaces based at the center of the main business hub of Ras Al Khaimah.
- Office for SMBs – SMBs can utilize decent-sized & furnished office spaces in RAKIA jurisdiction. Their budget-friendly pricing structure makes them a feasible choice for young investors and entrepreneurs who are going to make a debut in the UAE market.
- Enterprise-scale office spaces – The modern, fully-furnished, and well-equipped office spaces of varying sizes and dimensions are the perfect option for enterprise-scale organizations willing to open their business base in Ras Al Khaimah.
- Unfurnished Office Spaces – If you are looking for a space that you can customize as per your requirements and company theme, you have the liberty to choose from different unfurnished office spaces in the RAKIA jurisdiction.
- Warehouse & Inventory Locations – There is a multitude of spacious warehouses for businesses that are going to hold in-house inventories for quick delivery services. Whether you are running a small business selling stationery items or an enterprise-grade company that deals in construction materials, you can find the perfect match to address your needs.
- Avenues for Industrial Businesses – If you are linked with the industrial, construction, or service industry, you can easily acquire enormous land space to build your company with easy access to other UAE states and bordering gold countries.
Best Businesses to Start in RAKIA
You can gain rapid growth in various niches and industries by forming a company in RAKIA. Some of the most attractive and promising industries for RAKIA business setup include:
- Construction Industry
- Financial & Insurance Services
- eCommerce business
- Travel, Tourism, & Food Industry
- Lifestyle & Cosmetics
How to Setup Business in RAKIA Free Zone?
Creating a RAKIA business setup involves the following series of steps with each a mandatory prerequisite to the next in line.
1. Decide Your Business Activity
It is mandatory to start by choosing the type and niche for your business activity. The legal obligations and license fees depend upon the business activity you opt for. Your business activities are also determinant in completing specific requirements such as finalizing your office and warehouse location as some domains of RAKIA’s jurisdiction are strictly prohibited for particular business activities.
2. Choosing the Right Legal Category for Your RAKIA Business Setup
You can choose from a range of legal categories that align with your RAKIA business setup, such as Laws associated with LLC (Limited Liability Company), etc. These legislative requirements are based on the type and industry of your business.
For final approval of the legal status of your RAKIA business setup, all local and foreign investors need to visit the facility of the General Directorate of Residency & Foreigners Affairs in Ras Al Khaimah’s DED.
3. Tradename Registration
The next step is to choose a unique and relevant tradename for your RAKIA business setup. After initial approval of your tradename, you become eligible to apply for the business license with the relevant authorities. The business license for company formation in RAKIA is your permit to begin your business activities in RAKIA.
After tradename registration, you can finalize your office space to get approval for location from the Monitoring and Consumer Protection Department in the DED.
4. Approvals from Other Authorities
Once you get your initial approval and complete all the legal requirements, you can visit the other relevant authorities for the completion of final approval. The list of authorities is subjective to your business activity. Whereas, some business activities follow a more straightforward process and require approval only from DED.
5. Issuance of the RAKIA Trade License
Your RAKIA trade license is your gateway to opening your company in RAKEZ. After the final approval from associated authorities, the next and final stage is to complete all the legal requirements and documentation to get a trade license from the DED.
The next section will cover all the necessary documents and liabilities you need to complete before applying for your trade license in RAKIA.
RAKIA Company Formation Requirements
RAKIA’s business setup requires some legal liabilities as per the UAE’s law. You are bound to fulfill the following documents required for company formation in RAKIA.
- Completing a business registration application with the DED at RAK.ae
- Providing your business’s memorandum of association
- Acquiring the Trade License
- Submitting an application for an establishment card to the Ministry of Labor (issued by the UAE Ministry of Foreign Affairs). The documents required for the said case include:
- Original Emirates ID
- Passport of UAE sponsor/shareholder (in case of shared partnership in Mainland – Shared partnership not Obligatory after 2020)
- Old Immigration card
- A valid Trade license
- Copy of Passport with valid visa page of all partners for Free Zone Company
- Confirmed and potential employees must be registered with the Ministry of Labor, with the documents required as under
- UAE’s Residence Visa/Work Visa – Here’s how to check visa status in UAE
- Copy of Passport with valid visa page
- Employment Agreement
- Labour card
- Emirates ID
License Cost in RAKIA Free Zone
The license cost in RAKIA is around 8,000 AED (without Visa Fees) which is much lower than other Mainland & Free Zone domains of UAE. RAKIA also introduces promotional offers frequently to attract investors.
Types of Licenses for Company Setup in RAKIA Free Zone
The licenses issued by the associated authorities in RAKIA fall under these categories:
- Industrial License
- Commercial License
- Professional License
- Consulting License
- Service License
- Tourism License
- Media License
Cost to Setup Business in RAKIA Free Zone
Apart from the license fee (which is almost negligible in the whole context), you need to show a capital amount of at least AED 100,000 for sole business ownership and AED 150,000 for businesses with two or more owners.
Business Activities Allowed & Restricted in RAKIA
RAKIA strictly follows UAE’s federal law and local laws (restricted to Ras Al Khaimah State). As per the directions made by the legislature, RAKIA strictly prohibits the allowance or liberty to any illegal business activity such as (but not only limited to) gambling. You can check out the RAKEZ list of business activities allowed in Ras Al Khaimah before finalizing your business activity.
Briefly speaking, these are the activities allowed in the RAKIA free zone:
- General Trading
- Commission agents
- Holding company activities
- Shipping Management
- Professional services
- International services
Keep in mind that banking, insurance, and reinsurance, and financial activities are prohibited unless the company obtains express permission from the RAK Investment Authority and the relevant UAE authority.
Can I Transfer My Company From Rakia to Another Free Zone In UAE?
You cannot transfer your company from one Free Zone to another but you can open another RAKIA business setup branch in any of the Free Zone of your choice in Ras Al Khaimah or other UAE states.
How Airzone Can Help You Set up Business in Rakia Free Zone?
Airzone makes the right information and resources regarding company formation in RAKIA or elsewhere in the UAE easily accessible to you. We are committed to serving our client base by helping them get on board with our trusted business formation service providers to help them accelerate their drive to create a RAKIA business setup.
With the right and dedicated support of our trusted company formation partners, you can set up a business in RAKIA in a hassle-free manner. Feel free to get connected with Airzone to get in touch with our trusted partners in Ras Al Khaimah. Acquire your trade license, open your Free Zone bank account, set up your business in RAKIA, and gain exposure to the diverse market.
FAQs About RAKIA Business Setup
Do I Need to Have a Local Partner to Start My Company in RAKIA?
RAKIA is a Free Zone in RAKEZ (Ras Al Khaimah Economic Zone) that offers you 100 percent ownership of your business without any need for local investors or shareholders.
How Many Days Would It Take To Get My License for My Business in RAKIA?
From the day you apply for your license in RAKIA, it takes 5-7 working days until you get your hands on your trade license in RAKIA.
Your RAKIA business setup is going to provide sustainable business environments and remarkable growth opportunities. Free Zones in UAE are the eye candy of overseas investors and entrepreneurs gearing up to set up their businesses in this amazing land of opportunities. Ras Al Khaimah, being a top business destination in the UAE is attracting numerous overseas investors by offering a range of privileges like zero tax, zero Import/Export duties, 100 percent business ownership, and others discussed above.