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Company Formation in Ras Al Khaimah Free Zone

Updated on May 28, 2017
Company Formation in Dubai by Dubai Law Firm
Company Formation in Dubai by Dubai Law Firm | Source

Expansion, Diversification, and Going Global

Traditional businesses followed a set pattern. Register a new business, comply with local laws, pay taxes on time, reduce costs and market efficiently. The modern day business and regulatory landscape, however, is ever-changing. One cannot assume that doing business is a simple as following three steps. Strategic advice, due diligence, tax planning and advance rulings, internal audits, compliance, the list is endless!

The process and steps get complicated when firms consider setting up a new business in a foreign country. Fortune 200 companies, leading IT firms, FMCG companies, transportation, and logistics businesses, banks - the list is endless. Practically, every company from an SME ( small to medium enterprise) to multinational today wants to expand business globally. Although comprehensive planning and research get involved, there are times when decisions go haywire, and this calls for restructuring.

Company Formation in Dubai

A lot has been written by various authors on company formation in general. So, then, why are we writing about company formation in Dubai, one may ask. Before we address the broader benefits, let's look at the basics:-

Company formation in Dubai allows investors and firms to enjoy a range of advantages including:-

  • There are no corporate or for that matter personal income taxes in Dubai or the UAE;
  • Investors and companies can repatriate one hundred percent of profits earned;
  • zero tax regime reduces compliance obligations;
  • world-class infrastructure, high quality IT and media solutions enable firms to operate business smoothly and more efficiently;
  • UAE is a hub that connectsMiddle East with Far East, Asia and Europe and this opens gateway to opportunities for companies to develop business;
  • Dubai and Ras Al Khaimah attract global talent making availability of workforce easier for businesses;
  • If firms consider company formation in Ras Al Khaimah Free Zone or any other free zone within the UAE, they can own one hundred percent shares. In contrast, firms operating outside the free zone require fifty-one percent of entity's shares to be held by a UAE National.

When deciding on forming a company within the UAE, investors should bear in mind the vast majority of options available for their consideration. The UAE comprises of seven emirates (or; states) and each state has one or several free zones. These free zones are governed by respective free zone authorities. Free Zones in Dubai are slightly expensive given that Dubai is the financial capital whereas free zones in Sharjah, Ajman, and Fujairah are comparatively economical.

A single investor is entitled to form a free zone establishment (FZE) form of company and companies with multiple shareholders enjoy free zone company (FZC) status. It may also be possible to setup branch of a foreign entity in UAE.

Company Formation in Dubai
Company Formation in Dubai | Source

Company Formation in Ras Al Khaimah Free Zone

Although, a great deal of information on the subject is available here,

Ras Al Khaimah Free Zone has been home to over 15,000 companies that are engaged in diverse business activities. The Free Zone opened its doors in 2008 and has seen a constant upsurge in incoming firms. RAKFTZ which stands for Ras Al Khaimah Free Trade Zone today houses some of the major global powerhouses who carry out commercial, service, and industrial activities.

The residence visa for Ras Al Khaimah gets issued at Federal the level and the visa application process is quite straight forward. Expatriate employees can obtain employment visa once they have cleared their medical tests. Likewise, shareholders and those occupying investor position are issued investor visas. There are no taxes payable by employers or employees.

Prior to formation, the individual investors will have to make preliminary inquiries followed by a preliminary application process. As a professional law firm, STA recommends that you consider registration of your trademark alongside the company formation process. In the United Arab Emirates, your company name does not guarantee that others cannot register a company with the same name. The reason underlying this principle is the vast number of free zones and local businesses and each free zone can issue a license with a name similar to that issued by other free zone.

Expansion Beyond Horizon - STA Law Firm
Expansion Beyond Horizon - STA Law Firm

A Quick Checklist on Business Setup in Dubai

Keep the following information handy before taking any steps:-

  • If you have not visited the UAE anytime earlier, inform the Free Zone or your consultant of the same and ask whether any additional documentation may be required;
  • Obtain one original set of proof of residence, your local ID, at least 8-10 photographs with white background, and take 4-5 copies of your (and; other shareholders') passports;
  • decide between 4-5 alternate names of companies you intend to set up;
  • every company should appoint a managing director (FZE, for instance, has single shareholder and in such event, the shareholder can nominate himself (or; other people) as a managing director and same applies for FZC companies)
  • obtain a recent original set of bank statement for verification and compliance of 'know your client' process;
  • prepare a short business plan and set out factual information pertaining to your proposed business;
  • obtain office space inside the free zone (this has become increasingly important as banks are unlikely to open accounts for firms that do not have a proper office space or virtual desk);
  • carefully review the list of activities offered by the concerned free zone, understand whether there are any special conditions relating to that specific activity;
  • clearly, understand the one-time costs and recurring costs;
  • understand in specific costs relating to visas, visa deposit, immigration card, PO Box fees, stamping charges, fees related to attestation, etc
  • meet with at least 3-4 different banks and understand their process, types of account, bank charges, processing time, etc
  • free zones require audit report at time of renewing the license so meet with 3-4 different audit firms and understand their services and terms.

Brief Facts on Company Formation in Ras Al Khaimah Free Zone

(click column header to sort results)
Types of Licenses  
License Particulars  
Commercial License
Commercial activities.permitted
3-4 weeks
Consultancy License
IT or Business Consultancy
2-3 weeks
Service License
Service level activities
1-2 weeks
Industrial License
Manufacturing, packaging, etc
5+ weeks

Company Formation in Dubai

After reading this article, would you consider business setup in Dubai or UAE?

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