RAK Company Formation

Last updated on 31 January 2023. Written by Offshore Protection.

Read our blog: Dubai Offshore vs. RAK Offshore

Ras Al Khaimah (RAK), one of seven independent federal Emirates that make up the United Arab Emirates (UAE), offers attractive opportunities for those seeking to establish an offshore company or International Company (IC).

RAK remains a premier investment authority, giving potential investors, individuals and companies numerous benefits and arrangements in setting up an RAK offshore company. All International Companies are governed by the International Companies Regulations 2006. The country has never been blacklisted by the EU and has good standing with all high-tax jurisdictions such in the US and EU and maintains good banking relations with correspondent banks.

Also referred to as a Non-resident Company, International Business Company and International Business Corporation, the RAK IC remains the most popular option for non residents seeking: to establish a presence in the Middle Eastern region, asset protection, confidentiality of financial accounts and to benefit from tax free schemes.

RAK offers investors and foreign companies a political stable environment, financial solidity with minimal financial risk (Moody’s credit rating of Aa3), with next to zero crime, in a strategic region that connects itself with regional markets, while also providing a critical link between the East and the West.

For more>> UAE as an Offshore Financial Center

Table of Contents:

Overview of RAK Company Formation
Advantages of RAK Offshore Company
Top Uses
Key Corporate Features
Registration Requirements
Corporate Taxation of a RAK Company
UAE Double Taxation Avoidance Agreements (DTAA)
Corporate Details

Advantages of RAK Offshore Company

Some of the advantages of holding an RAK Offshore International Company (IC) in the UAE include:

Asset protection
Confidentiality
Tax planning
International visibility and exposure
Zero exchange controls
No double tax agreements
No restrictions on profit transfer
No restrictions on capital repatriation
No signed treatise that enable a foreign exchange of information
UAE is not on any 'blacklist' for tax havens

The UAE and RAK offshore companies offer political and economic stability of the jurisdiction through:

Modern and flexible legislative framework
Simple incorporation and filing requirements
Double Taxation Avoidance Agreements (DTAA)
State of the art banking and telecommunication facilities

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Recently there has been a lot of pressure put on low tax jurisdictions by both the European Union (EU) and the Organization for Economic Cooperation and Development (OECD). However, because UAE is not a member of the EU or the OECD it is therefore is not subject to their regulations.

Top Uses

There are many reasons why an individual or company would use a RAK Free Zone to set up a company whether it is savings on taxes, protecting one's savings, cost efficiency, simplicity or confidentiality.

Some of the other advantages include, but are not limited to:

Reduced tax liability
Fewer reporting requirements
Internet Trading
Probate
Family Wealth Protection
Property-owning Companies

There are a number of businesses which are best suited to operate through an Offshore IC including:

General Trading
Consulting and Advisory Services
Holding Company (buying/holding/selling stakes of companies)
Investments and Joint Investments Company
International services
Professional Services
Shipping Management Companies
Commission Agents Companies

Key Corporate Features

RAK IC	Corporate Details
General
Type of Entity	Limited by Shares
Type of Law	Federal / Sharia
Governed by	International Companies Regulations 2006 Registered Agents Regulations 2006
Registered Office in RAK	Yes
Shelf company availability	No
Our time to establish a new company	1-2 weeks
Minimum government fees (excluding taxation)	Dhs. 2,000
Corporate Taxation	Nil
Access to Double Taxation Treaties	No
Share capital or equivalent
Standard currency	Dirham (pegged to the dollar at 3.67 AED for $1)
Permitted currencies	All
Minimum paid up	Dhs. 1,000
Usual authorized	Unlimited
Bearer shares allowed	Yes
No par value shares allowed	No
Directors
Minimum number	1
Local required	No
Publicly accessible records	No
Location of meetings	Anywhere except RAK
Corporate directorship allowed	Yes
Shareholders
Minimum number	1
Publicly accessible records	No
Corporate shareholder allowed	Yes
Location of meetings	Anywhere except RAK
Company Secretary
Required	Yes
Local or qualified	Local (natural or corporate)
Accounts
Requirements to prepare	Yes
Audit requirements	No
Requirements to file accounts	No
Publicly accessible accounts	No
Recurring Government Costs
Minimum Annual Tax	Dhs 2,000
Annual Return Filing Fee	Dhs 1,500
Other
Requirement to file annual return	No
Migration of domicile permitted	Yes

Package Includes

Government Registration Fee (First year)
Registered Office Address (First year)
Registered Agent Services (First year)
Company Secretarial Maintenance
Certificate of Incorporation
Memo & Articles of Association
Appointment of 1st Directors
Consent Actions of the BOD
Share Certificates
Register of Directors
Register of Officers
Register of Shareholders
FREE Phone and/or email consultations

For more>> UAE offshore company formation

Registration Requirements

People or companies seeking an offshore company formation in the United Arab Emirates are required to satisfy the below criteria.

The minimum capital requirement of a RAK IC is AED 1,000
Minimum of one shareholder
Minimum of one Director in which the powers and duties are to be specified in the memorandum
Company name needs to be approved by the RAK Free Zone Authority
Memorandum needs to include share capital, share value, power of Directors and object of the company notarized in a UAE Court
Must keep financial records in office (though they remain confidential)
It is not a requirement that shareholders or Directors need to be present when signing incorporation documents
Select a name for the company and have it approved by the RAK Free Zone Authority
Confirmation that the share capital has been paid
Bank Certificate confirming of deposit of the minimum share capital

Corporate Taxation of a RAK Company

Of the many attractive advantages in setting up a RAK offshore company formation are the numerous tax benefits accrued through incorporating within the jurisdiction of the UAE.

These tax benefits include:

Zero personal income tax
Zero corporate tax
No capital gains tax
No sales tax
No withholding tax
No value added tax
No import of export tax
100% capital and profit repatriation
100% ownership in Free Zones
Sixty one double taxation agreements and thirty two bilateral investment treaties are in place

The only companies required to pay taxes are oil, gas and petrochemical companies and branch offices of foreign banks.

UAE Double Taxation Avoidance Agreements (DTAA)

Double taxation avoidance agreements (DTAA) prevent individuals and corporations from having to pay tax on same item during the same time period. Agreements have been made with:

Austria, Belarus, Belgium, Canada, China, Czech Rep., Egypt, Finland, France, Germany, India, Indonesia, Italy, Lebanon, Malaysia, Malta, Morocco, New Zealand, Pakistan, Poland, Romania, Singapore, Sudan, Thailand, Tunisia, Turkey, Ukraine.

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Corporate Details

Companies Law stipulates that a RAK International Company (IC) may engage in any type of lawful activity except for industries including insurance, banking and the investment of money for others and restrictions apply to conduct local business.

An IC conducting banking or insurance operations outside the Free Zone and the UAE must ensure that it has obtained permission and has been granted appropriate licensing from authorities within the relevant jurisdiction.

The register of the UAE RAK offshore companies registered agents maintained by the Authority shall contain the following details in respect of each registered agent:

Name and address approved registered agent
Names of the individuals who are authorized to sign on behalf of the company
Date of approval the given by the RAK Authority to provide registered agent services

Principal Corporate Legislation

Governing Corporate Body

RAK Investment Authority (RAKIA) is the governing body and the companies are regulated under RAK Offshore Regulations 2006.

Restrictions on Trading

An IC may only operate within the activities outlined and approved of in the official memorandum.

Language of Legislation and Corporate Documents

English

Shelf Companies Available

Time to Incorporate

Normally processed within 1 – 2 weeks

Names Requiring Appropriate Consent or Licensing

In certain cases consent of an appropriate Ministry or any such local authority may be required for activities, operations or businesses’ engaged in:

Oil & Gas, Banking & Investment, Financial Services, Insurance, Media, Transport, Construction, Telecommunications, Real Estate Management, Architectural and Engineering Consulting, Tourism, Shipping, Civil Aviation, Legal Services, Medical Services, or Education.
Any name that contains the words state, government, municipal, etc., and may wrongfully suggest a patronage of such.

Re-domiciliation provisions

A company incorporated under laws of a foreign jurisdiction can continue its existence as a company registered under that specified Act. RAK Offshore IC may also transfer their domicile to foreign territories that permit such procedures.

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