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Offshore Company in Ras Al-Khaimah

General information

0%

Tax rate

2 weeks

Time of establishment of the company

1000 AED

Minimum capital

Ras al-Khaimah is one of the seven emirates in the United Arab Emirates. Located 80 km from Dubai, it is the most liberal of the emirates and has a policy of attracting entrepreneurs with a 0% income tax. It is a relatively new offshore jurisdiction competing with Dubai. The director and shareholders of the company can be here of any nationality, it is also possible to establish a company with an issue of bearer shares. In terms of the legal system, Ras Al-Khaimah is part of the United Arab Emirates. The stable geopolitical situation of the Emirates and their support make it a leading industrial centre. It is, for example, the world’s leading producer of ceramics.

What to keep in mind

Ras Al-Khaimah is a pro-economic location attracting investors with its flexibility and tax system. The government and sheikh are open to foreign investors, they imaginatively try to attract capital with a liberal policy that abolishes all taxes and duties for companies. After the massive economic growth of Dubai and Abu Dhabi, today Ras Al-Khaimah is becoming increasingly popular, especially in the offshore sector, which has already attracted more than 3,000 companies in 2 years.

 

It is worth remembering that at the beginning of 2018 the Emirates introduced VAT into their tax system. Companies with a turnover of more than 375,000 AED are required to register for VAT. The VAT rate is 5%.

Types of companies

In the United Arab Emirates there are three basic types of companies which differ in terms of registration requirements, prices of such services and, of course, business opportunities.

  • The first of these types is an offshore company. According to the regulations of international law concerning such companies, it is not necessary to have a visa to stay in a given country in order to set up an offshore company there. It is because this company is not considered to be a resident, but a virtual company. It should be remembered, however, that no activity can then be carried out within this country. The client will own 100% of the shares in the company. He can only open a bank account with a bank that provides internet banking services. Importantly, in order to open an offshore company in the UAE, the client does not have to come to the place – we will act on his behalf. However, it is required that the client comes to the bank in order to open an account. Offshore companies may also be established in two other emirates, such as Dubai and Ajman. However, both jurisdictions require the client to participate in the company registration process and sign the relevant documents. In addition, each year the client must provide a report prepared by an expert resident in order to be able to renew the operating license. Unfortunately, this is an additional cost for the client
  • The second type of companies in the UAE are Free Zone companies, which, like offshore companies, are 100% owned by the Client. This company gives the client a visa to stay and work in the UAE for a period of 3 years. During this time, however, he may not stay abroad for more than 6 months. The client can also open a bank account for the company together with a cheque book, debit card and access to online banking. Importantly, the client will have to come to the UAE both to set up the company and to open a bank account. As soon as the company is established, you can already apply for visa. The cost of one visa for a resident is about 7500 AED (which is equal to about 700 USD), and this price includes the application form, immigration card, health card, UAE identity card, fingerprints, visa stamp in the passport, etc.
  • The third type of company is Mainland or the equivalent of the limited liability company, which are established in cooperation with local Emirati. It is a local partner and will hold 51% of the company’s shares, while the Client will hold the remaining 49% of the company’s shares. In practice it is only on paper. The client can quite agree with the local partner and pay the agreed amount in order to be able to do business with part of the shares of the local partner. Thanks to this form of company, the client can operate anywhere, not only in the UAE, but all over the world. When opening a bank account, the customer can also access check books, debit cards or online banking. However, it is necessary for the client to come to the UAE for 10-12 days in order to set up a company. The cost is about 75000 AED (which is equal to about 21000 USD), and this price includes subscription fees, sponsor fees, administrative fees, fees of a professional agent, all documents in Arabic, etc. The client organizes the office space on his own according to his requirements. However, we can help in this – thanks to cooperation with numerous real estate agents. The cost of a visa for a resident up to 7500 AED (which equals about 700 USD).

Company registration procedure

The establishment of an IBC company in Ras Al Khaimah usually takes about 14 days from the receipt of the complete set of documents to which they belong:

  • proof of identity – current, valid passport (notarized copy must include nationality, place and date of birth, passport number, expiry date, photograph and signature).
  • confirmation of address – VAT invoice for utilities, not older than three months, indicating the name and address of the person (e.g. for gas, electricity, water or landline phone, but not for mobile phone)
  • bank opinion – the document must indicate the period for which the person is known to the institution (not less than three years) and the nature of the relationship between the individual and the institution.

It must be original and dated no later than 3 months back.

 

It should be in English.

Company registration procedure:

  • Verification of availability of the chosen name,
  • Preparation of the articles of association and the company’s statute,
  • For companies registered in the freezone – a personal visit to the Emirates in order to obtain a resident visa, undergo medical examinations and appear in the bank.
  • Obtaining a license to conduct a selected business activity,
  • Submission of the required documents to the Register.

Company name

Some limitations also apply to the shape of the company’s sound. Names containing certain words such as “bank”, “trust”, “insurance”, “security” or “royal” require the approval of the relevant UAE Minister. The company name must be followed by the word “Limited” or “Incorporated” or the abbreviation “Ltd / Inc”.

Company structure

A company in the RAK must have at least one member of the Management Board, who may be a person of any nationality, bearing in mind the requirement to maintain a majority of local directors in order to protect the company from accusations of tax residency in Poland due to the place of its board. A director may also be a legal person. Directors’ data are not publicly available and must be disclosed to the relevant authorities registering the company (secret register). In addition, the company in the RAK must appoint a secretary, who may also be of any nationality. The secretary is the company’s governing body responsible for contacts with local authorities. Finally, a company in the RAK must have at least one shareholder whose details are not publicly available, but are only subject to disclosure to the local authorities when the company is registered. It is also permissible for the company to issue bearer shares and to hide the actual shareholder behind a so-called nominal structure, i.e. a trustee who holds shares in the name and on behalf of the depositary on the basis of a fiduciary agreement, which is a typical instrument for Anglo-Saxon systems. The costs of such a solution are relatively high.

Registered office:

The Company must have a registered address in the territory of Ras Al-Khaimah. For companies in the freezone, offices are opened in the so-called Shared Office, where the company has a space of e.g. 2 m2.

Time to set up a company:

The time to establish the company is approximately 2 weeks from the date of receipt of the complete set of KYC documents.

Capital:

Minimum capital is 1000 AED.

Taxes and finances

There is no corporate income tax or profit tax in Ras Al-Khaimah. There are no customs duties and there is no inheritance tax. It should be remembered that an offshore company (International Business Company) is not a tax resident of the United Arab Emirates, hence it cannot benefit from the advantages of the double taxation treaty. Additionally, it is not allowed to operate in the Emirates.

 

A company registered in the freezone economic zone is also not subject to taxation, with the exception of VAT imposed on the supply of goods and services in the Persian Gulf countries. The tax rate is 5%. The registration limit is 375,000 AED. The mechanism of the tax is similar to that known to us from VAT in the EU.

Bookkeeping

Due to the introduction of VAT into the tax system, accounting is mandatory. It should be kept in accordance with IAS.

Other information

Bank account

For your company you can open a multi-currency bank account with Internet access to your account, VISA or ATM MasterCard card (you can obtain several cards). Of course, such a service is paid for separately – in addition, real beneficiaries should remember about the need to go through the KYC (know your client) procedure, which requires disclosing the ownership structure to the bank and – often – a detailed description of the planned activity. In the case of a freezone company, due to the acquired residence of the UAE, the bank will not report the fact of having an account to the country of citizenship of the shareholder. Opening an account requires a personal appearance at the branch office.