Are you interested in setting up a business in Ras Al Khaimah? It’s a great choice! The Emirate is known for its business-friendly environment, cost-effective company set-up solutions, low taxes, and attractive investment opportunities. However, setting up a business in RAK can seem daunting, especially if you are unfamiliar with local laws and regulations. But don’t worry; this guide will take you through the process, step-by-step.
Step 1: Choose your business activity and license type
The first step in setting up a business in Ras Al Khaimah is to choose the type of business you want and decide on the legal structure that best suits your needs. Ras Al Khaimah offers a variety of business licensing options for setting up a business, such as a free zone, International Business Company, or mainland company.
Decide on the legal category for your establishment that fits your business, e.g. Limited Liability Company (LLC), Free Zone Company (FZCO) or Free Zone Establishment (FZE). The legal requirements are determined by the type and nature of your business.
If you don’t understand these terms, here’s a glossary explaining what they mean:
- Business Activity: This refers to the type of business you want, such as trading, manufacturing, consulting, or any other commercial activity. Choosing a business activity that is allowed in RAK and matches your skills, experience, and interests is important.
- License Type: This refers to the location of your business, such as a free zone company, an International Business Company company, or a mainland company. The license type will depend on various factors, such as the type of business activity you want to engage in, the ownership structure, the tax implications, and the regulatory requirements.
The legal structures are broken down as follows:
- Free Zone Company: This is a company that is registered in one of the free zones in RAK, such as Ras Al Khaimah Economic Zone (RAKEZ) & RAK Digital Assets Oasis (RAK DAO). Free zone companies enjoy various benefits, such as 100% foreign ownership, zero corporate and personal income taxes, the lowest tax rate of 9% compared to other regions, and no customs duties on imported/re-exported goods.
- International Business Company (IBC): This is a company that is registered in Ras Al Khaimah as an international Business Company at RAK International Corporate Centre (RAK ICC). IBCs are ideal for corporate structuring and private client solutions. These entities are commonly used for investment and international trade, holding structures, wealth management, asset protection, and succession planning. They enjoy various benefits, such as 100% foreign ownership, no minimum capital requirement, cost-effective registration and renewal fees and minimal regulatory requirements.
- Mainland Company: This is a company that is registered with the Department of Economic Development (DED) in Ras Al Khaimah, enabling entrepreneurs to conduct business within the UAE. More than 1,000 business activities are available, offering entrepreneurs the advantage of 100% foreign ownership without the need for a local service agent. While subject to corporate and personal income taxes, mainland companies benefit from access to a larger market and government contracts.
Step 2: Select a business name and get it approved
Once you have decided on your business and legal structure, the next step is to select a business name and get it approved.
You can check the availability of your preferred name on the RAK Economic Zone (RAKEZ) website, RAK Digital Assets Oasis website or the Department of Economic Development (DED) website. Once you have a few options, you can apply for the name reservation and get it approved. It usually needs to make sense in both written English and Arabic to be approved, but you can find all the details on the websites named above.
Step 3: Obtain the necessary licenses
The third step is to obtain the necessary licenses for your business. You may require different licenses and permits depending on your business activity and legal structure. For example, if you want to engage in commercial activities, you will need a commercial license, while if you want to provide professional services, you will need a professional license. Depending on your business activities, RAK DAO offers specialized licenses for fields like Artificial Intelligence, Blockchain Development, DLT Services & Software, Computer Systems and Network Consultancy, Cybersecurity, Cyber Risk Management, Digital Assets Mining, and Digital Creator Marketplace Services, among others. These licenses can be obtained exclusively through RAK DAO. In other cases, you can also go through RAKEZ or RAK DED.
The licenses issued by the concerned authorities in the Emirate of Ras Al Khaimah are classified under:
- Industrial License
- Commercial License
- Professional License
- Service License
- Media License
- Education License
- General Trading License
- Tourism License
- And many more…
Step 4: Register your business
The fourth step is registering your business with the relevant authorities.
- If you are setting up a mainland company, register with RAK DED.
- If you are setting up a free zone company, register with the relevant free zone authority.
For example, if you want to establish your business in a free zone ecosystem in RAK, you can start by registering with RAKEZ.
Step 5: Open a bank account and get your visa
After registering your business, the next step is to open a bank account and apply for your visa. You will need a bank account to conduct business transactions and a visa to live and work in RAK.
You can apply for a visa through the General Directorate of Residency and Foreigners Affairs (GDRFA) or RAKEZ’s one-stop-shop location or online portal.
Step 6: Comply with the Laws and Regulations
Finally, staying up-to-date with the latest laws and regulations is important. The UAE Government regularly updates its laws and regulations to support businesses and promote economic growth. For example, in 2020, the UAE government introduced new laws and regulations to support startups and small businesses, such as the commercial companies law and the introduction of bankruptcy law.
If you need help setting up your business in RAK, there are various companies and consultants that can assist you. RAKEZ and RAK DED offer business setup services, and many consultants can provide legal and financial advice.
Setting up a business in Ras Al Khaimah can be straightforward if you follow these steps and stay up-to-date with the latest laws and regulations. RAK is a great place to start or expand your business, with a supportive business environment, low taxes, and attractive investment opportunities.
Got any feedback or suggestions? We’d love to hear from you! Feel free to reach out at hello@heartofrak.com