An OECD white listed jurisdiction, Ras al Khaimah (‘RAK’) is the fourth largest of the seven emirates forming the United Arab Emirates (‘UAE’).
RAK launched an offshore facility regulated by the RAK Free Trade Zone (‘RAKFTZ’) Authority International Company Regulations in 2006, which allows for international business to be conducted free of local taxes and regulations. This particular model was based on the international business company regime model followed by the British Virgin Islands.
RAK International Companies (‘RAKIC’) may engage in any lawful activity with the exceptions of insurance, banking, investment and related business. Restrictions also exist on the conduct of local business, albeit special licenses may be obtained in certain circumstances.
Properly structured, the RAKIC provides similar features to other more prominent offshore centres, some of which are listed below:
- No tax liability in RAK/UAE;
- Confidentiality; and
- Business friendly/flexible company law.
9 Essential Facts On The RAK International Company
The RAKIC, which is a private company limited by shares can be registered within 5 days of submission of the required registration documentation to the RAK authorities. The RAKIC must have a registered agent and registered address in the UAE.
Company names must end with the words “Limited” or “Incorporated” and where required, proposed (available) names may be reserved for up to 90 days.
- A minimum of one director and secretary are required and corporate directors are permitted. Local officers are not required;
- A company director may also act as secretary; and
- Details of directors are not available for public inspection however are required to be disclosed to RAKFTZ.
3. Shareholder(s)/Share Capital
- A minimum of one shareholder is required;
- Corporate shareholders are permitted;
- Details of shareholders are not available for public inspection but are required to be disclosed to RAKFTZ; and
- There are no minimum share capital requirements.
4. Choice Of Law/Flexibility
Although RAKICs follow UAE law, provisions exist which allow for the laws of an alternative jurisdiction to be applied to the RAKIC for matters such as commercial disputes. The chosen law must be stated within the RAKIC’s Memorandum and Articles of Association.
Where their own local provisions allow and the necessary RAK requirements are met, companies incorporated outside the UAE may be redomiciled to RAK as a RAK International Company.
5. Annual Reporting
The RAKIC must maintain accounting records which should be retained for a period of 7 years from the relevant period/year end. These accounts are for internal management purposes only and are not required to be filed with the RAKFTZ authorities.
A ‘renewal’ license fee is payable annually in order to maintain the good standing status of the company.
The RAKIC is not subject to local taxes or duties. There are no foreign exchange controls.
RAK currently has not entered into any tax information exchange agreements and as mentioned above, details of company directors/shareholders are not available for public inspection.
8. Business Activity
RAKICs are typically used for, amongst others, general international trading, consulting, advisory, holding and investment services.
In addition, despite a general prohibition on RAKICs regarding the conduct of business with persons resident in the UAE, authorisation may be obtained to allow the holding of shares in both offshore and onshore UAE companies.
9. Memorandum & Articles Of Association
The company’s constitutional documents (bylaws) are its Memorandum & Articles of Association. These documents set out the activity and internal governance of the company and may be amended as required from time to time by way of submission of an ‘Amending Addendum’ to RAKFTZ.
Disclaimer: Please note that this commentary does not purport to be a comprehensive review of RAK International Companies, their uses and/or the legislation by which they are governed. Appropriate specialist advice should always be obtained in advance of utilising such a vehicle for planning purposes.