United Arab Emirates: RAK International Corporate Centre Business Companies

Last Updated: 28 September 2018
Article by Oneworld Ltd

Introduction

Ras Al Khaimah is one of seven emirates comprising the United Arab Emirates. In 2006, Ras Al Khaimah enacted the Ras Al Khaimah International Company Law, which is based on the model of the successful international company regime of the British Virgin Islands. The law was most recently updated in 2016 to keep pace with international developments.

The RAKICC Regulations

Salient features and innovations of this regulation are as follows:

Companies by Guarantees

There is now the possibility of incorporating companies by guarantee with or without authorisation to issue shares. This opens the venue for non-profit organisations requiring the flexibility of an offshore structure with legal personality and not necessarily a base of operations in UAE.

Unlimited Companies

The shareholders of an unlimited company are required to meet any insufficiency in the assets of the company and settle its liabilities in the event of liquidation. Such a particularity provides more comfort to creditors and is required for certain type of businesses where limited liability is not acceptable or practical.

Segregated Portfolio Companies

The Segregated Portfolio Company (SPC) is similar to the concept of a Protected Cell Company (PCC), whereby they have separate assets and liabilities. The segregated portfolio does not constitute a separate legal entity from the SPC though the liability of one cell is separate from the others. The SPC may issue shares (of different classes) in respect of each segregated portfolio. This structure is particularly interesting for investment holding purposes, whereby the liabilities of one cell do not affect the other cells.

Restricted Purpose Companies

Another concept borrowed from the BVI laws, is the provision for Restricted Purpose Companies (RPC). Such companies will be limited to undertaking certain specific purposes. RPCs are mainly used as special purpose vehicles e.g. to issue debt instruments. Any transactions engaged by a RPC which are restricted by its constitutional documents will be declared void.

Migration of Companies (Continuation)

A company based in a foreign jurisdiction can migrate and continue as a RAKICC company provided that this is allowed under the laws of the foreign jurisdiction. Similarly, a RAKICC company can migrate and continue as a company incorporated in a foreign jurisdiction. For example, it could be particularly interesting if that foreign jurisdiction is Mauritius, whereby the company can become tax resident and benefit from the tax treaties executed by Mauritius. The RAKICC Authority has the right to waive some continuation requirements to facilitate the simultaneous migration of a large number of companies from or to a particular jurisdiction.

Shares

There is also the possibility of removing all pre-emptive rights for existing shareholders from the constitutional documents. This would render shares of an RAKICC company freely transferable. Shares can now also be issued with preferential rights, no rights to distributions, and special/limited/conditional/no voting rights. The issuance of fractional shares is now permitted.

Statutory Fees

The government incorporation fee is US$682, and annual license fee is US$545.

Administration

A RAKICC Business Company must have a Registered Agent in the UAE, and a Registered Office which must be maintained by the Registered Agent in the UAE to which all official communications and notices to the company must be addressed.

The Registered Agent must maintain the particulars of the beneficial owners of the company.

Winding Up

The Regulations contain procedures for winding up of a company. We can assist companies to comply with the statutory liquidation requirements.

Striking Off the Company from Register

The Registrar may strike off a company from the Register under the following circumstances by giving one month notice if the Registrar has reason to believe that a company is/has:

  • Not carrying on business or is not in operation.
  • Acting in contravention of the Regulations.
  • Conducting itself in a manner that is prejudicial to the interests of the Ras Al Khaimah authorities.
  • Failed to pay any fees required under the Regulations.

Advantages of RAKICC

  • Zero taxes and duties
  • No Tax Information Exchange Agreement with any country
  • No public disclosure of information
  • Simple accounting requirements
  • Facility for company name reservation (up to 90 days)
  • No limitations on the business that the company may carry on
  • Legalization of company documents not required when used within UAE
  • No requirement for the owner or director to visit the UAE in person to set up the company
  • 100% full foreign ownership
  • A registered office in Dubai (OME will provide)

A RAKICC company is permitted to carry out one and up to five activities amongst the activities listed below:

  • To own shares in other companies
  • To Act as a Holding Company
  • Business Management Consultancy
  • Real Estate Consultancy
  • To own Properties
  • General Trading
  • Marketing Consultancy
  • IT Consultancy
  • Invest in Properties

Key Facts

Company Legislation Ras Al Khaimah Decree dated 7 June 2005
Ras Al Khaimah International Corporate Centre Business Companies Regulations 2016
Ras Al Khaimah International Corporate Centre Business Companies Regulations 2018
Name End with "Limited" or "Incorporated"
Time to Incorporate Five Working Days
Possibility of Migration Yes
Tax Rate Nil
Shareholders Minimum: One
Residency Requirements: No
Share Capital Minimum Authorised: One
Minimum Issued: One Share
Denomination: AED, US$, EUR, GBP (other currencies with approval)
Bearer Shares Not permitted
Redeemable Shares Yes
Beneficial Ownership Disclosure No public disclosure of information. Shareholder, Directors, Secretary and Beneficial Owner details provided to RAKICC.
Directors Minimum Number: One
Corporate Directors: Yes (names of Directors disclosed to Registry)
Secretary Minimum Number: One (Director may act as the Secretary)
Residency Requirements: No
Requirements Directors: No
Company Officers: No
Availability of Shelf Companies No
Meetings Yes (can be held anywhere in the world)
Annual General Meetings Yes
Annual Accounts Yes (accounts must be approved by the Directors and preserved for seven years)
Are Accounts Filed No
Audit Requirement No
Share Transfer Duty Nil
Registered Office Required Yes
Exchange Controls No

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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