How to Start a Business in Ras Al Khaimah: Process, Benefits, and Documents
If you want to know how to start a business in Ras Al Khaimah, you are at the right place.
We will provide you with a complete guide on how to start a business in Ras Al Khaimah (RAK). You can know all the details, including the prerequisites that will prepare you for a business in Ras Al Khaimah.
We also look into the options available to you in terms of location, legal structure, license type, and other things.
You can explore the benefits of having a business in RAK, along with the Dos and Don’ts. You’ll also learn how we, as a business setup services provider, can help you start your business and keep it running successfully in RAK.
Come join us on this exploration journey of Ras Al Khaimah.
How to Start a Business in RAK: All You Need to Know
Ras Al Khaimah is the fourth largest Emirate in the UAE. The Sultanate of Oman is the only country with which it shares its border. Sharjah, Fujairah, and Umm Al Quwain are its domestic border Emirates. It lies along the shore of the Arabian Gulf, making it a strategic location.
You can find mountains, beaches, mangroves, sand dunes, wildlife, and many adventure tourism options. So, in a way, you are all covered in terms of sightseeing options if you wish to stay in this Emirate.
Economically, it is diversified, rich, and poised for further growth. You can find many free zones and industrial hubs – a key business attraction. It has a strong economy and a stable political environment, making it a preferred location for investment. The low cost of doing business, along with a modest cost of living, add to its appeal.
Some industry sectors with strong performance include trading, manufacturing, cement, ceramics, and tourism. Its low reliance on oil and gas and location near the Strait of Hormuz makes it a major trading destination. With the government’s focus on education, healthcare, and strengthening the strong sectors, the Emirate can expect more growth.
If you want to enjoy modern infrastructure, relaxed government policies, and an economically-developed ecosystem, Ras Al Khaimah is a good place to be. It has a bright future growth, which you must harness for your benefit by setting up a company there. We will help you with all the information and relevant support needed to understand how to start a business in Ras Al Khaimah.
First, look at what you must know before starting a business in RAK.
Things One Must Know Before Starting a Business in Ras Al Khaimah
Forming a company in any new city is not an easy task. You must first understand the city and country, its legal and regulatory structure, and the options available for businesses. For Ras Al Khaimah, you can find information on the types of licenses and legal structures allowed. You can also form a company in mainland RAK or free zones. Let’s explore each aspect one by one.
Choose between RAK Free Zone, Offshore, or Mainland?
The three options businesses have when setting up their base in Ras Al Khaimah are mainland, Offshore, or free zones. The free zones of RAK are:
- RAK Economic Zone (RAKEZ)
- RAK International Corporate Centre (RAK ICC)
- RAK Maritime City
- The free zone in the areas surrounding RAK International Airport
A license in mainland RAK allows you to conduct business in the local market with no limit on the number of business activities. You can also form a rental office anywhere in the Emirate. There are no currency restrictions and no mandatory annual auditing. 100% FDI is allowed in some activities. For other activities, you need to find a local sponsor with 51% shareholding.
The free zone companies enjoy 100% FDI, 100% repatriation of capital and profits, and cost-effective business setup services. In offshore RAK, you can enjoy privacy, no taxes, and exemption from all import duties.
Company Legal Structures: Select the Best One for Your RAK Company
The different types of legal structures allowed in RAK depend on whether you want to set your base on the mainland, offshore, or in a free zone. If a free zone, you can form any of the following legal structures:
- Free zone company – It is an LLC with a minimum of two shareholders. The maximum number of shareholders can be five or 50, depending on the free zone.
- Branch – It can be a branch of a local company or a foreign company.
- Free zone establishment – It is a limited liability establishment with one shareholder.
- RAK International Corporate Centre (ICC) offshore entities – It is a company limited by shares with at least one shareholder, one director, and one secretary. Such companies can hold assets, such as shares and allowed real estate, but cannot operate. They have no license, no office space, and no visas. But they must have a registered agent, which RAK ICC approves.
In the case of an offshore company in RAK, you can have a single or multiple shareholders. But you must have a registered agent approved by the respective authority.
If you are in mainland UAE, you can form the following legal structures for your business:
It is a firm with a single owner who is liable for business liabilities to the full extent of their assets. Generally, UAE and GCC locals are allowed to form sole proprietorships. Foreigners can form a sole proprietorship only in a few activities but must appoint a local service agent.
Companies under Commercial Companies Law
One can set up any of the following legal structures under Commercial Companies Law
- Partnership – Two or more natural persons coming together to form a partnership firm where they share unlimited liability jointly. Only UAE nationals can form a partnership firm.
- Limited partnership company – A partnership firm with one or more active and dormant partners. The active partner acts as the merchant of the company and is responsible for business liabilities. The dormant partner does not act as a merchant and is responsible for the company’s liabilities only to the extent of their share. Only UAE nationals can be active partners, and foreigners can join as silent partners.
- Limited liability company – In such a company, the number of partners is a minimum two and a maximum 50. Based on the share in the capital, the partners hold limited business liability.
- Single-person LLC – An LLC owned by a natural or legal UAE national. Based on the extent of the share capital in the MoA, the owner is responsible for corresponding business liabilities.
- Public joint stock company – It has five or more shareholders with limited liabilities. The minimum capital requirement is AED 30 million.
- Private joint stock company – It is a company with at least two and atmost 200 shareholders with limited liabilities. A single person can form such a company, but he/she must be a corporate entity in UAE. The minimum capital requirement is AED 5 million.
Companies under the Civil Code
Three forms of companies can be formed under this law – Speculative venture partnerships, business companies, and Mudaraba companies. Herein, you can form businesses practicing the use of skills, information, or intellectual faculties.
It is a branch of a foreign company. Since it is an extension of the foreign parent company, its name must be the same as the parent company. It must have an individual or a corporate entity as a national service agent. It must obtain a license from DED after registering with the Ministry of Economy. It must conduct the same activities as the parent company but not trading, distribution, or manufacturing of these products.
It represents a foreign company. Such offices can only work on promoting the parent company’s business
Types of Licenses in RAK
The different types of licenses in mainland RAK are:
- Industrial license – Manufacturing or industrial activities
- Commercial license – All kinds of trading activities
- Professional license – All skill-based businesses such as craftsmen, services, etc.
The different types of licenses you can have in RAK’s free zones include the following:
- Trading license for trading, import-export, warehousing, and distribution businesses in specific products.
- General trading license for trading, import-export, warehousing, and distribution businesses in the rest of the products.
- Industrial license for manufacturing, assembling, processing, and packaging activities.
- Media license for media and communication businesses.
- Commercial license for repairing, renting, restaurants, contracting, maintenance, shops, and other services businesses.
- Consulting license for services such as consultancy, management, or professional services.
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Here is the Full Process to Start a Business in RAK
Above is the general information that you must remember about Ras Al Khaimah. When you decide to start a business in RAK, this information will help you make the choices.
We present to you the step-by-step procedure of how to start a business in Ras Al Khaimah. The first few steps are the choices you need to make where we help you. Later is the submission of documents and payments of fees for application processing.
Deciding Where Would You Like to Start Your Company in Ras Al Khaimah
You must decide whether to establish your business in the mainland or a free zone of Ras Al Khaimah. Offshore is also an option. Each has its pros and cons. Based on your requirements and priorities, you must decide.
Determining the activities you would like to engage in
A crucial decision to make is the type of business activities you want to engage in. This decision depends on your business idea. Based on the business activities you want to conduct in Ras Al Khaimah, you can determine the license type.
What would be the company's legal structure?
You have chosen the activity and license type; now, choose your preferred legal structure. It depends on these two factors, plus the number of partners/shareholders, their nationalities, and shareholding.
Get an initial approval
Before applying for a trade name, you must get an initial approval. By getting an initial approval, you can proceed with getting a business license and other essentials.
Choose the Company Name
Now is the time to give an appropriate specific name to your business. You need to select a unique name while following the naming conventions of the Emirate. You must submit this name to the Department of Economic Development (DED).
Get approvals from other regulatory authorities
For some activities, you need to get a license from DED plus a ministry or regulatory authority for that sector. After you apply to DED for the company name, you need to get approvals from the relevant authorities. For this, you must visit these authorities’ offices to get their approvals.
For the business license, you must submit the following documents to the DED:
- License application form
- Photocopies of passports, residence certificates, visas, and no objection letter
- Attested copy of tenancy contract
- Copy of ownership certificate
- Copies of national IDs
- Trade name certificate copy
Technical evaluation report
Complete the payment and get the license
Once you get the approvals from the relevant authorities, you can proceed to the next step. In this step, you must submit all necessary documents and pay the fees. Once you fulfill all the legal requirements, DED will issue the license.
Rent an office in RAK
The last step is to get an office in Ras Al Khaimah. Research the possible office locations and finalize one based on your criteria. An officer from the Monitoring and Consumer Protection Administration in DED will visit the office and approve or reject.
Advantages of Choosing RAK to Start Your Own Business
RAK, the beautiful Emirate of UAE, offers several benefits to new businesses and investors. Some of the benefits of starting your own business in RAK include:
- No personal income taxes
- Low corporate income taxes
- No trade barriers
- No customs duty on imports and exports and tax exemption on commercial levies for trading
- No foreign exchange controls
- 100% FDI in some sectors in mainland and full foreign ownership in free zones
- 100% repatriation of capital and profits
- Incentives by the government for investors
- Business-friendly environment
- Hassle-free business formation process
- Top-notch amenities, modern-class infrastructure, and advanced communication facilities
- A developed economic ecosystem
- Low cost of living
- Simple laws and regulations to follow
- A strategic location with connectivity to foreign cities
- Relaxed government policies
Access to global and regional markets
With all these details in hand, what are you waiting for?
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Things You Must Take Care of While Starting a Business in RAK
We have given you end-to-end details on how to start a business in Ras Al Khaimah. But before embarking on this journey, you must be careful of some things. Following are some necessary Dos and Don’ts that you must follow for starting and operating a business in RAK:
Conduct necessary market research
Research the RAK market. You must understand the economic, financial, legal, and cultural climate of the Emirate. Also, research your target audience, challenges, competition, and opportunities.
Get expert assistance
You must have done complete research on how to start a business in Ras Al Khaimah. Even this blog helps you with all the details. However, it is crucial to get an expert’s help in the company formation process. They are experts, have complete knowledge of laws, and are thorough with every document and step. So, you will get expert, accurate, timely, and comprehensive services without any hassles and risk of forgetting anything.
Be wary of your choices
Forming a company in any Emirate of UAE requires choosing the structure, license, activity, and mainland/free zone. Be careful about your choice. Contemplate your thoughts. Weigh the pros and cons of each option and compare. Make the right choices so you are not required to change it later.
Compliance is the key
Once you set up a business, adhere to the regulations of the Emirate. Comply with all the necessary laws and make it an annual business practice. This is how you can avoid penalties or fines from these regulatory authorities.
Start Your Business in RAK With Business Setup HQ's Services
Business Setup HQ is a leading company formation specialist in the UAE. We help our clients with all the procedures for starting and running a business in the UAE. We can help you with all of the following in the mainland or free zones of the UAE:
- Company incorporation
- Registration with authorities
- Obtaining a trade name
- Identifying the best location for the office
- Creating a bank account
- Obtaining visas for employees
We are a one-stop solution to your question, “How to start a business in Ras Al Khaimah”? We have a strong team of business consultants, legal professionals, policymakers, and analysts. By partnering with us, you can enjoy:
- Comprehensive knowledge of laws and regulations
- On-time and accurate delivery of business setup services
- Thoroughness with documentation
- Expertise in handling legal formalities
- Domain experience in different verticals
How to Start a Business in RAK: Frequently Asked Questions
Ras Al Khaimah has many booming industries, such as eCommerce, tourism, financial services, real estate, and others. You can explore any of these industries or consider professional businesses requiring skills. Thus, you have many opportunities to explore a business in Ras Al Khaimah.
The procedure for starting a small business in Ras Al Khaimah is the same as forming a big enterprise. You must choose the business activity, license type, and legal structure. Then, you decide whether to form a company in the mainland or a free zone. After these decisions, you must get a trade name, approvals from other authorities, and submit documents to get a license from DED.