Ras Al Khaimah

Key benefits

Ras Al Khaimah (RAK) is the fourth largest emirate in the United Arab Emirates (U.A.E) and one of the fastest growing emirates in one of the fastest growing economies in the world. Located in a strategic location in the heart of the Middle East and enjoying stable governance the emirate boasts numerous businesses that compete successfully in numerous global markets. The RAK economy is unique in the fact that it has minimal dependence on oil, unlike many other emirates in the region, and instead focuses on the sectors of agriculture, tourism and manufacturing.

It is now possible to establish an offshore business in RAK. Since the inception of offshore company formation in 2003, the UAE has emerged as a major business hub in the Middle East. It offers businesses and individuals a wide range of comprehensive services and structures whilst retaining confidentiality. RAK Offshore is a dynamic, rapidly expanding business and financial centres worldwide with unique competitive advantages that will appeal to a wide variety of businesses, entrepreneurs and investors.

There are numerous benefits to incorporating a company in RAK.

 Any non-residential individual or corporate entity can register an offshore company in RAK. These companies are very flexible financial instruments and can be used to serve many objectives such as tax planning, trusts, funds, real estate holdings etc. RAK offers businesses and individual a wide range of services and structures dedicated to non-residents.

Below is a summary of benefits to utilizing a RAK Offshore Company:

  • English is widely spoken and all business documents can be produced in English if required
  • 100% foreign ownership is permitted
  • Only one director and one shareholder is required
  • RAK boasts a well developed, credible financial regulatory framework which includes strict adherence to International Standards such as international anti money laundering regulations
  • The cost to create and maintain an RAK Offshore Company is relatively low
  • RAK has a well established communication network and solid banking infrastructure
  • No restrictions on hiring manpower if required with easy access to a large pool of well-qualified, highly training professionals
  • A high degree of confidentiality is guaranteed
  • A tax free environment with no exchange controls
  • Low cost of incorporation and maintenance of a RAK Offshore Company
  • RAK has a comprehensive Double Taxation Treaty, countries feature include: New Zealand, China, Malaysia, Malta, France, Italy, India, Singapore, India, Germany and Finland amongst others professionals
  • A high degree of confidentiality is guaranteed
  • A tax free environment with no exchange controls
  • Low cost of incorporation and maintenance of a RAK Offshore Company
  • RAK has a comprehensive Double Taxation Treaty, countries feature include: New Zealand, China, Malaysia, Malta, France, Italy, India, Singapore, India, Germany and Finland amongst others

Procedure of company registration

The registration of an offshore company in RAK is relatively straight-forward with comparatively minimal compliance procedures and only one director and shareholder required (which may be the same person). The director and shareholder may be individuals or corporate entities and may be a non-resident in the UAE.

Outlined below are the requirements for registering a Offshore Company in Ras-Al-Khaimah and the processes and procedures, administration issues and reporting requirements.

Procedure for RAK offshore company formation:

  • An application form is completed with details regarding the preferred name and details of directors and shareholders.
  • For Individual Applicants the following documents are required: A completed application form, passport copy, original bank reference letter, and proof of residence in the form of a utility bill / phone bill etc.
  • For Non-Individual Applicants the following documents are required: Copy of Incorporation Certificate, Board of Meeting of Directors or Resolution, MOA of the parent company, Passport copy of the directors and shareholders, Good Standing Certificate and any other documents requested by the Registrar during the process
  • Prior to offshore company registration the objectives and activities of the proposed company after incorporation must be disclosed to the Registrar
  • The completed application form, personal documents and Articles of Incorporation are sent to the authorities.
  • Once accepted and approved a Certificate of Existence is issued. This Certificate of Existence is proof of an Offshore Company’s formation, registration and existence. The Certificate of Existence is sometimes referred to as the Certificate of Incorporation.

Company administration guidelines

Share Capital:

  • There is no minimum share capital requirement.
  • Bearer shares are permitted. Par value of each share must be AED 1,000. Different classes of shares are permitted and shares have to be fully paid when allotted.
  • A minimum of one shareholder is required and Corporate Shareholders are permitted. Shareholders decide the capital structure of the company.

Directors:

  • 100% foreign ownership is permitted
  • A minimum of one director is required and corporate directors are permitted.
  • Details of directors are not available for public inspection.

Restrictions on Name & Activity:

  • RAK Offshore Company names must end with Limited or Incorporated
  • The following names and their associations cannot be used; Assurance, Bank, Building Society, Chartered, Imperial, Insurance, Trust

Local Requirements:

  • Every Offshore Company in RAK has to have a registered office in RAK which is used as the business address of the company
  • It is obligatory to have a secretary for a RAK Offshore Company.

Confidentiality:

  • RAK Offshore Companies offer complete privacy and confidentiality, owners of IBC’s are kept confidential under law

Tax and accounting regulations

There is no federal tax legislation in the UAE, each emirate has its own tax law. Only oil, gas and petrochemical companies are required to pay taxes.

Below is an overview of the tax and accounting regulations in RAK:

RAK Tax System:

  • Income Tax – 100% Income Tax exemption
  • Value Added Tax (VAT) – There is no VAT in the UAE
  • Capital Gains Tax (CGT) – There is no Capital Gains Tax in the UAE
  • Corporation Tax – 100% Corporation Tax exemption
  • Taxation of Dividends -Profits derived from dividends are taxed only in the state from which the income was earned. Dividend income paid by a UAE company to another company which has a double taxation treaty with the UAE may not be taxable in the foreign company even though no tax was paid in the UAE
  • Taxation of Royalties – Profits derived from royalties are taxed only in the state from which the income was earned.
  • Taxation of Interest – Profits derived from interest are taxed only in the state from which the income was earned.
  • Withholding Tax – No Withholding Tax applicable
  • Capital Duties – 100% Capital and Profit repatriation
  • Import / Export Taxes – No import or export taxes
  • Net Worth Tax – No Net Worth tax

International Aspects of Taxation:

Anti-avoidance regulations:

  • RAK has rapidly gained a reputation for being a tax free, transparent jurisdiction and it is of paramount concern that the reputation of RAK is not tainted by money laundering or any other illegal practices therefore anti-avoidance regulations are enforced.

System of Double Tax Treaties:

  • The UAE has over 40 Double Taxation Treaties in place.
  • As the UAE has no taxes, double taxation treaties are aimed at making the UAE a more attractive territory in which to operate by reducing taxation levied in foreign jurisdictions on profits remitted abroad by foreign entities operating in the UAE.
  • RAK currently has a DTTA with the following countries: Austria, Belarus, Canada, Czech Republic, Egypt, Finland, France, Germany, India, Indonesia, Italy, Lebanon, Malaysia, Malta, Morocco, New Zealand, Pakistan, Poland, Romania, Singapore, Sudan, Thailand, Tunisia, Turkey and Ukraine.

Annual Reporting Requirements:

  • Accounting records must be kept for 7 years from the date on which they were prepared.
  • Accounts are required to be approved and signed by the directors but there is no requirement for accounts to be filed with the RAK authorities.
  • No audit is required.

A coherent offshore tax planning strategy is essential to maximize the effectiveness of offshore companies. Service Pro can assist by structuring the most tax efficient strategy to satisfy your requirements. Service Pro will guide you as to which jurisdictions offer the best tax structure by identifying the types of tax payable as well as applicable exemptions and incentives. Service Pro will provide tax planning advice that will identify which is the most favourable tax efficient jurisdiction in which to incorporate.