United Arab Emirates: The Best Of Both Worlds

Last Updated: 28 November 2017
Article by STA Law Firm
Most Read Contributor in United Arab Emirates, September 2018

Balancing Low Costs and High Investments

Although the title of this article sounds like the lyrics of a boy-band, we are not discussing about shores.

Among the pool of Free Trade Zones in the United Arab Emirates, the Ras Al Khaimah Free Trade Zone (RAK FTZ) offers an unparalleled bargain for the incorporation of companies: low-priced fees which render it a cost-effective gateway to the global markets of the region. The Free Zone has had a mesmerizing access to over two billion consumers and has been awarded the 'Best Emerging Free Zone' title for the second year running.

Established in 2000, RAK FTZ furnishes its clients with full foreign ownership, tax-incentives, fast visa processing, permission to source labor and goods globally, and open-ended business support services. The competitive area is one of the fastest-growing free zones in the UAE; it is the investment destination of choice for more than 8,000 companies from over 100 countries, representing more than 50 industry sectors.


The dynamic corporate facilities and tax incentives offered by RAK FTZ render it a haven for all types of investors, ranging from international corporate giants to domestic investors. RAK FTZ's business friendly corporate environment is deeply-rooted in international trade practices and corporate governance structures. Given its flexible rules and regulations, there is no question as to why the free zone is successful at attracting businesses and at contributing largely to the U.A.E.'s economic growth. The regional base has allowed investors to exploit the commercial and industrial market of the Middle Eastern and North African region.

To some extent, the Ras Al Khaimah Free Trade Zone is located in a strategic position for international commercial relations. The proximity of Port Saqr places the RAK FTZ as the first port of call for the northern Emirates. The Port is close to the main shipping lane, the Strait of Hormuz, and Ras Al Khaimah is the closest Emirate to major northern markets, i.e. Pakistan, India, China and the Far East. Access to countries throughout the world via shipping is facilitated by the administrative procedures put in place.

Despite the many advantages the RAK FTZ has to offer, its distance from the economic heart of the United Arab Emirates (roughly 1 hour and a half from Dubai) is not as strategic as that of other free zones. Bearing this in mind, investors tend to establish their manufacturing and industrial units in the free zone rather than their corporate office. The low establishment costs and the industrial nature of the free zone make it a sanctuary for a particular category of clients. As for businesses that qualify as service-providers, settling in a more central area would be advised because greater contact between the company and the customer is advised. Nevertheless, given the exponential increase in the city of Ras Al Khaimah's economy in recent years, the development of a new regional capital is in sight. In this vein, the issue posed by the free zone's distance from the economic capital is bound to dissipate in due course.

Ras Al Khaimah Free Trade Zone Authority (RAKFTZA) has recently created an innovative system of four different Free Zone Parks designed to serve each investor according to their specialized requirements. The four dedicated free zone parks tailored to individual company needs include a state-of-the-art business park for clients, an industrial park to facilitate heavy manufacturing activities, a technology park for trading and light manufacturing, and the RAK academic zone which is home to various educational institutions and service providers.

The business park is located in a well-developed business center which offers sophisticated offices. This facility gives investors an ideal opportunity to start a business, given its furnished, fully-functional and ready-to-use-offices, flexi offices (shared offices) and flexi-desks in multiple locations. Moreover, facilities required by international businesses are offered as well: Superior telecommunications offered by Etisalat, modern airport connections to 25 countries, port facilities at Port Saqr (only 25km from Ras Al Khaimah).

The industrial park is developed for construction of Heavy Industries and Warehousing, it incorporates abundant energy supplies. Plot sizes are fully serviced to include water, electricity and telecommunications. The facilities include on-site employee accommodation, custom office, operation supportive services center, and other administrative and service support centers located within the Park.

RAK technology park is in South of Ras Al Khaimah. It is close to RAK airport as well as close proximity via emirates road to Dubai. It is located opposite 5-star resorts with the famous Al Hamra Village and resort Golf course. The location of the park helps the companies in abounding ways as possible.  

The table below will provide readers with specific information in setting up a company in the free zone:

Ras Al Khaimah is well recognized among industrial-related companies given that it provides greater facilities for these industrial companies by allowing companies to import raw materials, manufacture, process, assemble, package and export finished products. Similarly, the RAK authorities and legal codes provide a soft requirement to facilitate the above areas in an efficient manner, attracting more industrial companies to RAK FRZ. However, clearance from RAKFZ and environmental impact studies are required. In addition, commercial licenses allow the following activities: import, export, distribution, consolidation, storage, or warehousing of items specified on the license. The maximum limit is seven similar product lines. A general trading license can be obtained under a commercial license, which allows for more than seven product lines.

In comparison to the other free zones in UAE, Ras Al Khaimah free zone provides a low-cost price for the company formation. Flexi facilities are shared, furnished workstations or small offices situated in Free Zone Building Number 1 and helps many start-up businesses and entrepreneurs to kick-start the operations of their dream company in UAE. Many UAE and foreign corporations and individuals looking to start their businesses in Ras Al Khaimah for this very reason. Similarly, the low cost in a flexi-desk facility and its reasonable renewal charges benefit professionals from GCC countries to obtain their consulting license and establish their presence in UAE.

Cost effective business solution for the investors attracts many companies and individuals to the RAK free zone. Globally renowned for cost-effective company formation in RAK Free Zone, this free zone also maintains a business-friendly environment. However, the corporations relating to industrial and manufacturing enjoy incorporating in RAK free zone for the ultimate Warehouse, land facility and unique free zone parks that will suit and serve every investor according to their needs.

On the whole, in less than ten years since its inception, the Free Zone has already developed into a world-class business hub for industrial growth and development. Business Setup in RAK free zone empowers clients and investors by offering a cost-effective and world-class economic zone with customizable packages and services along with state-of-the-art facilities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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