Ras Al Khaimah is fast becoming one of the world's foremost tax free jurisdictions for confidential business formations. Uniquely positioned at the most Northerly point of the United Arab Emirates, Ras Al Khaimah (RAK) offers a combination of both onshore and offshore solutions.
In 2007 the government of Ras Al Khaimah through the RAK Investment Authority (RAKIA), the emirate's sovereign wealth fund, launched an offshore facility - RAKOFFSHORE - with the aim to lure investors looking for an alternative to the traditional offshore financial centres. In the first two years of its existence it has registered well over 2000 IBCs.
RAKOFFSHORE has been developed to provide an alternative to setting up a fully fledged office in the UAE and to the only other IBC regime available in the UAE at the time: Jebel Ali offshore companies.The aim was to provide fast and cost efficient incorporations and flexibility in structuring the company.While a Jebel Ali offshore company has restrictions, for example, corporate directors and shareholders are not allowed, a minimum of 2 directors is required, a requirement to hold an AGM and to submit audited accounts; none of these restrictions apply to RAKIA IBCs. RAKIA is also less expensive and incorporations can be done in one day.
There is no requirement for the client to visit in person or to deposit the share capital in a bank account.While adhering to stringent KYC requirements, the regime offers maximum confidentiality; the only data on public record is the name of the company and date of incorporation.
If local business needs to be conducted or if local office premises are required, then IBCs are not feasible. IBCs in the UAE come with the following restrictions:
The most feasible uses of RAKIA IBCs are any of the following:
It is interesting to place the RAKIA regime into the perspective of the policy of the RAK government. Sheikh Saud Bin Saqr al Qasimi, the crown prince and deputy ruler of Ras Al Khaimah is a US educated free marketeer and is dedicated to making the strategically located emirate an attractive place to set up business by minimising the restrictions on entrepreneurs and business in general. RAK prides itself on creating a pro-business environment: an open door policy, no trade barriers, easy licensing procedures, no restrictions on hiring expatriates or other restrictive employment regulations are key features.The tag line of RAKOFFSHORE is 'an entrepreneur's paradise' and in its marketing materials it appeals to entrepreneurs seeking refuge from excessive taxation elsewhere. The RAK government also practices what it preaches and it is in this spirit that the RAK government has no problem with two competing freezones: RAK Free Trade Zone (RAKFTZ) and RAKIA, both offering an IBC regime.
So what are the differences between these two IBC regimes? Very few, but there are some nonetheless: RAKIA requires less paperwork and offers more flexibility. RAKFTZ IBCs have to use a standard memorandum and articles from which no deviation is possible.
The question remains, why choose RAKIA IBCs instead of one the more traditional offshore jurisdictions? Under various circumstances a RAKIA incorporation can confer a benefit not otherwise available:
Another consideration could be that the profile of a company operating from a major world trading centre like the UAE is considered desirable.
The information provided in this article is for general information purposes only. The information is not intended to be comprehensive or to include advice on which you may rely. You should always consult a suitably qualified professional on any specific matter.
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