Destination Ras Al Khaimah

Overview of the Business Environment and Regulatory Framework

Prepared in Association with

The Government of Ras Al Khaimah welcomes business to the Emirate in order to
build a vibrant, efficient and dynamic economy that addresses opportunities in the
global market place.

H.H. Sheikh Saqr Bin Mohammed Al Qasimi

Supreme Council Member and Ruler of
Ras Al Khaimah.

2
H.H. Sheikh Saud bin Saqr Al Qasimi
The Crown Prince & Deputy Ruler of
Ras Al Khaimah

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4
5
Table of Contents
Introduction....................................................................... 1
History................................................................................... 1
RAKIA Advantage................................................................. 1
Location................................................................................ 2
Climate.................................................................................. 2
Political System..................................................................... 3
Legal System........................................................................ 4
Population and Immigration.................................................. 5
Language ............................................................................. 5
Religion................................................................................. 5
Safety and Security............................................................... 5
Credit Rating and International Accreditation....................... 5
Education.............................................................................. 6
Hospitals .............................................................................. 6
Major Hotels and Housing ................................................... 7
Other New Projects.............................................................. 8
Shopping and Recreation Facilities...................................... 9
RAK City Map....................................................................... 10
The Business Environment............................................... 11
Investor Consideration.......................................................... 11
Economy............................................................................... 11
Industries.............................................................................. 12
Tax and Trade...................................................................... 17
Facilities and Infrastructure ................................................. 18
Employee Affairs.................................................................. 20
Hints for Business Visitors ................................................... 20

Opportunities for Foreign Investment .............................. 22

Hints for the Foreign Investor ................................................ 23

Entering the Ras Al Khaimah Market................................ 24

Commercial Agents............................................................... 24
Incorporating a Limited Liability Company (LLC) ................. 25
Branches and Representative Offices of Foreign Commercial Companies 26
Professional Partnerships and Sole Professional Proprietorships 26
Public Joint Stock Company.................................................. 26
Private Joint Stock Company................................................. 26
Establishing a Company with RAK Investment Authority..... 27
The Regulatory Environment.................................................. 27

The RAK Investment Authority......................................... 30

Type of Licenses .................................................................. 30
Type of Entities..................................................................... 31
Documents Required............................................................ 32
Al Ghail Industrial zone.......................................................... 33
Location of Al Ghail ............................................................... 34

6
Introduction

Established in 1971, The United Arab Emirates (UAE) is a federation

of seven independent Emirates:
• Abu Dhabi
• Ajman
• Dubai
• Fujairah
• Ras Al Khaimah (RAK)
RAK—at-A-Glance
• Sharjah
Ruler— • Umm Al Quwain
HH Sheikh Saqr Bin It is located close to the entrance of the Arabian Gulf on the south
Mohammad Al eastern corner of the Arabian Peninsula. Due of its location at the
Qasimi center of the world's major trade routes, the UAE serves as a major
Crown Prince & shipment destination for trade and commerce for all major industries,
Deputy Ruler – across the US, Europe, Asia, Africa and the Middle East. The total
H. H. Sheikh Saud area of UAE is approximately 83,600 square kilometres and its
Bin Saqr Al Qasimi. capital is Abu Dhabi.
Country—
UAE
History
Population— The end of British colonial rule in the Arabian Peninsula resulted in
250,000 the formation of the UAE. After establishing their presence in the
Area— Arabian Gulf in1820, the British signed a series of agreements with
5,600 km2 the rulers of individual Emirates, including a treaty on preserving the
maritime truce between the British and the Emirates.
Coastline—
65 Km
Following Britain's decision to terminate its agreements with these
Languages— states, the rulers of all Emirates decided to establish a federation.
Arabic, English Six Emirates formally established the UAE on 2nd December 1971
under a provisional constitution, which was made permanent in
1996. Ras Al Khaimah is the seventh Emirate and joined the UAE in
1972.

RAKIA Advantage
• 100% Income tax and Corporate tax exemptions. (No VAT)
• No import or export taxes
• No income, sales or wealth tax
• 100% repatriation of capital and profits
• No foreign exchange controls: No restrictions on currency
• No restrictions on hiring expatriates.
• Land lease at very concessional rates
• 25 years renewable lease agreements
• Proximity to the Gulf and global markets

1
Introduction (cont’d)

Location
Ras Al Khaimah is situated between the Hajar Mountains in the east
and the Arabian Gulf in the west. It is approximately 35 to 45
minutes driving distance
north of Dubai. Ras Al
Khaimah is well connected
to destinations in Europe,
the US, Australia and the
Far East by both European
and Gulf airlines.
European, American,
Australian and most Far
Eastern nationalities are
granted a free visa upon arrival in UAE.

Besides being one of the most picturesque locations in the UAE, it is

also the most fertile. The gravel plains on the side of the Al Hajar
Mountains are used for vegetables, fruits, grains, milk and cheese
farming. Ras Al Khaimah is also endowed with rich non-oil mineral
resources, giving impetus to its focus on non-oil based economic
growth. The emirate is a major agricultural hub and an important
commercial port for the UAE.

Climate
Ras Al Khaimah is situated between latitudes 25o and 26 o north and
longitude 55 o and 60 o east, in the tropical zone extending across
North Africa and Asia. It borders the Emirates of Umm Al Quwain,
Sharjah and Ajman and shares borders with the Sultanate of Oman.
Climatic conditions are influenced by the Indian Ocean. In the
summer months of June, July and August the weather is hot and
humid. The mild season and winter last from October to May with
temperatures ranging from 8oC to 18oC. Summers see temperatures
reaching between 35oC to 43oC. Humidity levels range from between
40 to 70 percent. Rainfall occurs mainly in winter with some
thunderstorms, which do not exceed 100 millimetres per year.

2
Introduction (cont’d)

Political System
The political system in the UAE is two tiered,
consisting of a federal government and the local government
structure of each Emirate.

Federal Government
The federal government includes the Supreme Council of Rulers, the
Council of Ministers, the Federal National Council and the Federal
Supreme Court.

The Supreme Council of Rulers, comprising of rulers of individual

Emirates, is senior-most government body. It is managed by a
president and vice president elected from amongst its members.
Rulers of each Emirate are members of the Supreme Council.

The Council of Ministers is lead by the Prime Minister, who is

chosen by the President in consultation with the Supreme Council.
The Prime Minister selects ministers who may be from any of the
Emirates. The Council is guided by a 40 member Federal National
Council, with members from the Emirates in proportion to their
population.

The Federal Government overseas foreign affairs, security, defense,

nationality and immigration, education, public health, currency,
postal, telecommunication services, air traffic control and licensing of
aircraft, labour relations, banking and extradition of criminals.

Local Government
Each of the seven Emirates also maintains its local Government
headed by its own Royal Family. Local governments differ in size
and complexity depending on population, area and degree of
development. For example, Abu Dhabi and Dubai, the largest and
most populous Emirates, have several layers of local government
while the local governments in the other Emirates typically include a
municipality and departments of public works, water and electricity,
finance, and customs.

Since 1948, Ras Al Khaimah has been lead by its ruler, His
Highness Sheikh Saqr Bin Mohammad Al Qasimi, who has provided
over 59 years of stable political governance. The Deputy Ruler and
Crown Prince of Ras Al Khaimah, His Highness Sheikh Saud Bin
Saqr Al Qasimi envisioned the development of an environment
conducive to global businesses and provided leadership by example
in setting up RAK-based businesses that today compete
successfully in markets of over 130 countries across the world,
leveraging the unique spirit of enterprise based in Ras Al Khaimah.

3
Introduction (cont’d)

Legal System
Ras Al Khaimah follows the same legal system as the other
Emirates of the UAE. Constitutionally, Islamic Sharia Law, based on
the Holy Koran, is the basic source of legislation in the UAE.
However, as a result of the development of trade and commerce and
the enactment of laws and codification at the federal and individual
Ras Al Khaimah Emirate levels, there is a growing body of civil law on several
has taken steps to subjects such as labour relations, maritime affairs, commercial
facilitate quick
transactions, trade agencies, intellectual property and commercial
implementation of
regulatory companies, the civil law relies heavily on French law. Therefore,
requirements under the UAE legal system, civil courts are parallel to Sharia courts.
including assured Over the years the importance of Sharia courts has decreased and
Government their role in business-related matters is relatively limited.
assistance to
obtain legal,
commercial and The federal court structure comprises courts of first instance, courts
environmental of appeal and the court of cassation, which is the final appeal. As a
licenses for general rule, when a court is deciding on an issue it refers to the
genuine
available body of civil law. If the matter is not addressed in civil law,
investments. For
example, it reference is made to the Sharia law and, in the absence
typically takes less of any reference in the Sharia Law, to the prevailing legislation in
than two days to other Middle Eastern ountries.
register a Company While there is no official
in Ras Al Khaimah.
system in place for reporting
The vision for court judgments, decisions of
development of the higher courts are viewed
Ras Al Khaimah as as binding and are generally
outlined by Deputy
followed by lower courts.
Ruler and Crown
Prince of RAK, His
Highness Sheikh A highly developed legal
Saud Bin Saqr Al framework is in place to look
Qasimi reiterates after the business entitled
the commitment of
the Government to Federal Law No. 8/1984
favourably address (concerning commercial companies), which regulates business and
any legal investment issues. It defines different forms of companies and states
framework related conditions applicable to them. Federal Law 1/1979 explains
to delivering world-
procedures and conditions for setting up industrial projects.
class products
made in Ras Al
Khaimah, through
fostering
enterprise,
encouraging global
vision and
leveraging
technology and
knowledge.

4
Introduction (cont’d)

Population and Immigration

The estimated total population of Ras Al Khaimah is
It is estimated that approximately 250,000. Immigration to Ras Al Khaimah and
nearly 40 percent other Emirates is governed by the Federal legislations of the
of the population
are expatriates UAE. Until recently immigration policies followed by the UAE
mainly from the authorities have been relatively liberal, reflecting the need for an
Asian sub expatriate workforce to operate and develop a fast-growing
continent followed economy. For private investors the government is supportive of
by those from Arab
facilitating the required employment permits/visas to recruit and
countries, Europe
and North America. reside qualified/skilled personnel not available locally. Existing
Ras Al Khaimah businesses employ executives and workers
from India, Middle East, Europe, America, Africa, South East
Asia and other parts of the world.

Language
Arabic is the official language of Ras Al Khaimah, and its use is
mandatory for legal proceedings and for communicating with
government departments. However, English is typically used for
business purposes. French and South Asian languages are also
understood.

Religion
Ras Al Khaimah is an Islamic state. The indigenous population is
approximately 80 percent Sunni Muslim and 20 percent Shia
Muslim. However, places of worship are available for
practitioners of Christianity, Hinduism and other religions.

Ras Al Khaimah Safety and Security

has been rated as Ras Al Khaimah is a safe and secure place with close to a zero
"The Most Cost crime rate. The police and civil defense are efficient and respond
Efficient FDI quickly to situations.
destination" by
Finacial Times,
London Credit Rating and International Accreditation
Ras Al khaimah has been assigned ' A1' short term and 'A' long
term foreign and local currency sovereign credit ratings by
Standard and Poor`s rating agency. The outlook is stable. The
ratings are underpinned by the relatively strong wealth enjoyed
by Ras Al Khaimah citizens, with GDP per capita approaching
USD 16,000, in line with the 'A' median. Moreover, Ras Al
Khaimah's growth prospects appear robust. Given below is the
regional ranking of UAE by Business Monitor based on mean
Dr. Khater Massad, composite score.
CEO, RAKIA has
been honoured as
FDi personality of
the year 2007 by Economics Politics Construction Competetive Anticipated Composite Regional
Countries LT Risk LT Risk Growth environment Potential score Rank
Financial Times.
UAE 7 7 8 9 8 39 1
South Africa 6 7 10 5 9 37 1
Kuwait 7 8 5 6 5 31 2
Israel 7 5 4 4 4 24 3
Saudi Arabia 6 7 4 5 4 23 4
Iran 5 6 2 4 5 22 5
Egypt 4 4 3 2 5 7 6
Nigeria 3 4 2 2 3 14 7
Business Monitor ranking on Mean Composite Score

5
Introduction (cont’d)

Education
Education in Ras Al Khaimah is free for all UAE nationals who are
required to attend primary school from the age of six. There is a
well-established infrastructure of state-run primary and secondary
schools. In addition, there are private schools of international
standard offering a range of curricula, including schooling under the
American, British and Indian systems. School sessions start from
September and admissions require transfer/migration certificates
from home country schools and education departments. In addition,
there are professional courses offered by major institutes from
America, Europe and the Subcontinent in Ras Al Khaimah.

Hospitals
There are four major government hospitals in RAK, all outfitted with
state-of-
the-art
equipment
and well-
qualified
doctors.
There are
also many
private
hospitals
and clinics
offering
quality
specialized
Medicare.
Now a new
hospital named RAK Hospital under the Swiss management, and
doctors have
started
operations in
Ras Al
khaimah.

6
Introduction (cont’d)

Major Hotels and Housing

There are several hotels that cater to different budgetary needs—
• Al Hamra Fort Hotel & Beach Resort—A beautiful five-star beach
resort typically occupied by tourists from Western Europe.
• The Hilton— Hilton Ras Al Khaimah & Hilton Ras Al Khaimah
Resort & Spa. Hilton Ras Al Khaimah Is situated in town with a
separate private beach. The Hilton Ras Al Khaimah Resort &
Spa the other is a beach resort
• Bin Majid Beach Resort
and Beach Hotel—Two
beach properties with
comfortable facilities
• Ras Al Khaimah Hotel—Is
located at the centre of
the city on hilltop
overlooking the Corniche
and the mountains.
• Al Nakheel Hotel—A small
budget hotel in the
Khatt Hotel & Spa
business centre
• Al Hamra Palace Hotel—
A state of the art seven-
star hotel with 400 rooms
designed by famous
architect Papiri with an
investment of USD 150
million overlooking the
sandy beaches of Al
Jazeera. This hotel is
slated to open in end of Al Hamra Fort Hotel
2008 and will cater to both
business travelers and tourists.
• Khatt Springs Hotel & SPA—A five-star hotel located in the
famous Khatt hot springs which offers wide variety of facilities
including Balneo Therapy

Many real estate developments have occurred in the last few years
in Ras Al Khaimah and several of villas and flats are available for
rent and sale for all budgets, ranging from economy to deluxe. The
rents are competitive ranging from USD 600 per month for a two-
bedroom flat.
Bab Al Bahr

7
Introduction (cont’d)

Other New Projects

Gateway City
A new Gateway City is being developed next to Emirates Road on
an area of 4 million m2 with an investment of USD 7 billion. The
gateway is going to function as both a residential and business city
and will have 50,000 residents. A monorail will also be offered as a
means of public transport.

RAK Financial City

As a modern functional complex, RAK Financial City is destined to
become the new hub for the offshore financial operations of the
regional business community. Due to its original and novel
architectural, the design of the building will enhance the cultural and
social fabric of the city and become a tourist attraction and landmark
for Ras Al Khaimah.

Developed on an area of 320,000 m2 it will include 12 towers ranging

from 25 to 65 floors. The three towers will have offices, one hotel
tower and eight residential towers. The area will have parking facility
for over 10,000 cars. The project is being developed with an
investment of AED 3 billion.

Al Marjan Island
Located 27 km’s southwest of Ras al Khaimah city centre, Al Marjan
Island is the first man made island project to be developed in Ras al
Khaimah. The cluster of coral shaped islands extends over 2.7
million m2 and is worth over USD 1.8 billion. Land reclamation is
expected to finish by December 2007. The total project completion is
expected by June 2009.
• This development will comprise waterfront homes, floating
villas, hotels, sporting facilities and commercial areas, etc.
• Investment opportunities exist for hospitality concerns, for
corporate entities looking to own guest houses and for high
net worth individuals wanting to invest in real estate.

Jebel Jais Mountain Resort

The Jebel Jais Mountain
Resort will be built on one of
the highest points of Ras Al
Khaimah's Al Hajjar
mountains. It will offer a
landmark five-star hotel and
conference centre, a cable car
linking the resort to sea level,
luxurious residential units from
apartments to villas, an
outdoor winter snow ski-ing Jebel Jais Resort
slope, a climbing, paragliding and abseiling centre, a Falconry centre
and a recording centre.

8
Introduction (cont’d)

Shopping and Recreation Facilities

For those interested in shopping and recreation, Ras Al Khaimah
offers a variety of formats, such as supermarkets, shopping malls,
branded goods, food courts, coffee shops, gold shops, etc.
Tourists also have plenty to see. The Ras Al Khaimah government
has consciously preserved the country's cultural heritage by
maintaining certain old structures, building natural history museums,
and promoting traditional sports, such as camel racing, dhow (boat)
racing and racing Arabian thoroughbred horses.

In addition to shopping malls, other recreation facilities include:

• Water skiing
• Scuba diving
• Desert safari
• Mountain resorts—Jebel Jais
• Sea diving
• Dune biking
• Multiplex theatres
• Sand dune bashing
• Microlight aircraft flights
• 64 kilometers of sliver sandy beaches
• Golf courses—RAK has two 18-hole golf courses: Al Hamra Golf
Course and Tower Links Golf Course

Manar Mall

9
Introduction (cont’d)

10
The Business Environment

Investor Considerations
• Investment promotion driven under guidance of Crown Prince
Economic Outlook and Deputy Ruler of Ras Al Khaimah, Sheikh Saud Bin Saqr al
Qasimi
GDP at current
prices—9, 253
• Strategic location that allows easy access to the markets of the
millions AED Middle East, Europe, CIS, Africa and the Indian subcontinent
• RAKIA Free-zone areas that allow 100 percent foreign
GDP rate of Growth ownership
(non-oil sector)—
18.3%
• State-of-the-art telecommunications network and regular
international flights
Per capita GDP— • Favourable attitude toward private business
46,407 AED • No foreign exchange controls
Diversified • No income tax for individuals or corporations
economy • Duty-free import of raw materials for manufacturing units and
generally low import duties
Stable currency – • Close investor access to local decision making
pegged to US$ at
AED 3.67:1 US$ • 100% capital and profit repatriation
• Strong appreciating and fully convertible currency
• No restrictions on hiring expatriates
Investor
Considerations
Economy
Investment Following the discovery of oil in the 1960s, the principal sources of
promotion driven revenue in the Emirates were oil- and gas-related products. Today
under guidance of this industry is the single largest driver of the UAE's economic
Crown Prince and prosperity and growth. To reduce its dependence on oil, Ras Al
Deputy Ruler of
Ras Al Khaimah, Khaimah diversified into other industries and manufacturing. By
Sheikh Saud Bin 2000, Ras Al Khaimah had the highest capital investment in the
Saqr al Qasimi. industrial sector in UAE.
Strategic location Economic Activities CAGR (%)
that allows easy Govt. Services 4.7
access to the Wholesale, retail trade etc 14.2
markets of the Agriculture, Livestock, Fishing 5.4
Middle East,
Real Estate & business services 11.3
Europe, CIS, Africa
and the Indian Construction & building 11
subcontinent. Transport, Storage & 6.9
Communications
Free-zone areas Mining & Quarrying 11.7
that allow 100 Crude Oil 18.6
percent foreign Other 7
ownership.
Manufacturing 14.6
State-of-the-art Financial Institutions 11.7
telecommunication Electricity & Water 15.1
network. Social & Personal Services 3.7
Tourism 16.1
Regular Domestic Services and Households 5.90
international
Less: Imputed bank service charge 6.00
flights.
GDP at current price 10.00
Total of non-crude oil sector 9.72

11
 The Business Environment—Industries

Potential Areas
The GDP of Ras Al Khaimah for 2005 was estimated at 9,253 million
Dirhams. The GDP growth during 2005 (non-oil sector) was 18.3
percent. Foreign trade in Ras Al Khaimah increased by over 100
percent since 2005. According to the 2006 Ras Al Khaimah foreign
trade statistics released by the Customs and Ports Department, Ras
Al Khaimah's total foreign trade increased to AED 10.38 billion in
value. The Emirate's imports increased to AED 4.28 billion, exports
were AED 3.65 billion and the value of re-exports stood at AED 2.45
Foreign trade in billion. Analysts believe that one of the main challenges before the
Ras Al Khaimah government is to ensure:
grew by 14 percent • Inclusive growth
in 2007.
• That the benefits of liberalisation will be felt by all socioeconomic
Ras Al Khaimah's groups.
total foreign trade
climbed to AED Total Foreign Trade Through Ras Al Khaimah Port in million AED
10.38 billion in
2001 2002 2003 2004 2005 2006
value.
Imports 747.40 1205.00 1171.68 5751.86 3178.40 4284.05
The emirate's Exports 257.53 834.36 1242.02 1213.20 876.42 3646.56
imports climbed to Re-Exports 2426.62 2764.42 3779.23 1699.83 895.57 2450.50
AED 4.28 billion. Source: RAK Customs and Port Department

The government of Industries in Ras Al-Khaimah

Ras Al Khaimah
Ras Al Khaimah is endowed with rich natural resources and an
encouraged the
manufacturing and abundance of natural raw materials, minerals and mining resources.
service industries It also has a widely-recognized potential in the agricultural sector.
by creating This Emirate is noted for the range and scope of its industries,
infrastructure covering pharmaceuticals, glass manufacturing, DVD, diapers,
conducive to free
trade and free
stainless steel, aluminum fabrications, yacht manufacturing, etc to
enterprise. name a few. Another prospering segment is the manufacture,
assembling and maintenance of oilfield drilling rig equipment,
including tanks and small barges used in the oilfield exploration
industry.

Quarrying
The Emirate’s vast reserves of high quality limestone deposits are
being successfully exploited by its diversified quarrying industry. Ras
Al Khaimah has the largest limestone quarries and crushers in UAE
for aggregate production, construction, steel industry and cement
RAK Ceramics Head Office industry. The Ras Al-Khaimah Lime Company, Noora, is a
subsidiary of RAK White Cement Company and is the only producer
of lime in the UAE. The Lime Brick Factory, a subsidiary of Noora,
manufactures calcium silicate bricks.

Ceramics
Ras Al Khaimah’s Ceramic industry, in particular, is a global success
symbol. Ceramics from this Emirate command the market in almost
130 countries worldwide.

12
The Business Environment

Ceramics (cont’d)
Established in 1989, RAK Ceramics is a leading producer of high
quality ceramic wall and floor tiles, gres porcellanato, and sanitary
ware. The company’s focus on excellence, quality and customer
RAK Ceramics is
one of the top three satisfaction were, in 1997, accredited with the ISO 9001 certification
ceramic by UK-based Ceramic Industry Certification Scheme, UK. Currently,
manufacturers in the company's products are exported to over 135 countries. RAK
the world, and is Ceramics began operations with one production line in June 1991
considered as a
with an output of 5000 sq.m. per day. With continued expansion
pioneer in
assimilating and programs and the use of sophisticated machinery, the company is
adapting to gilt- now engaged in the production of 200,000 sq.m. per day of ceramic
edge technology. / gres porcellanato tiles.

RAK Ceramics offers a comprehensive product line and produces

one of the industry's largest offerings of colors, textures and finishes.
In the ceramic range, the company produces ceramic wall tiles,
ceramic floor tiles, matching decor tiles, listellos, and pencils,
cappings and other related items.
• In gres porcellanato (porcelain / vitrified tiles), the company
produces thousands of models in soluble salt ,salt and pepper
and glazed, offering finishes such as polished,semi polished,
unpolished , rustic, stone, mosaic, travertino, etc.
• Water jet cutting technology facilitates unique water jet designs
and diamond-cutting machine tools help make vanity tops from
gres porcellanato slabs. The tiles are manufactured in very wide
range of sizes.
• In sanitary ware, several models are produced in wash basins
(mounted and pedestals) , water closets, bidets, bathroom sets,
bath tubs, shower trays, kitchen sinks, bathroom cabinets,
accessories and decorated sets.

RAK Porcelain is part of the RAK Ceramics Group. Since the

creation of the Group in1991, the successful combination of
expertise, creativity and knowledge enabled the company to assume
a leadership position in the ceramics industry. RAK Porcelain was
established with the intention of producing high grade porcelain for
the hotel industry.

RAK Laticrete is a joint venture between US-based Laticrete Inc.,

and RAK Ceramics. Laticrete and RAK Ceramics maintain
complementary product lines, development capabilities and
geographic strengths.

13
The Business Environment

Cement
The cement and building materials industry is an important local
industry in the Emirate. Stone, quarried from mountains, is used to
produce a variety of building materials (eg., aggregates, ceramic
tiles, etc.). Ras Al Khaimah is the only emirate to produce oil-well
cement, white cement and lime, and is a major domestic supplier
and exporter. The Emirates has three Portland cement factories and
a White Cement factory catering to both local and export markets.
• Established in 1972, Union Cement Company (UCC) was UAE’s
first cement manufacturer in the Khor Kuwair Industrial Area. It
began production in 1975 and has an annual production capacity
of 2 million tones of internationally rated products. UCC products
include ordinary Portland cement, moderate sulphate resistant
cement and high sulphate resistant cement. UCC is also the only
producer of oil well cement in UAE.
• Founded in 1995, RAK Cement Company was built using the
latest technology incorporating prime quality raw materials from
the Emirate’s mountains. The plant has a capacity of one million
tonnes with 150 staff, making it the most efficient cement
producer in the country. It is also one of UAE’s most high-tech
cement factories.
• Ras Al-Khaimah Company for White Cement and Construction
Materials was commissioned in 1986 with an installed capacity of
450,000 tonnes, from its three kilns. It exports products globally
using the adjacent Saqr Port.
• India-based Pennar Cement Company has RAKIA sponsorship
to operate a factory with a capacity of 800,000 tonnes of
Portland cement. It is running at 110 percent capacity and has
orders for full capacity for the next 12 months. Established in
2006, the factory has worked at 100 percent and above capacity
utilization. The factory also broke even in two years, as against
a projected period of three years.

Pioneer cement plant

14
The Business Environment

Pharmaceuticals
RAK is home to Gulf Pharmaceutical Industries, a well-recognised
international drug major. Its exports of medicine to 40 countries
crossed US$ 136 million, and maintains a strong presence in many
parts of Europe, Africa, Asia, Australia and Latin America. The
company is better known under its brand name, Julphar, the ancient
name of RAK. In addition to its headquarters in Ras Al Khaimah,
Julphar operates two additional plants in the UAE and one each in
Ecuador and Germany. The group also owns several affiliates
providing support services. Julphar manufactures a wide range of
pharmaceutical products in all dosage forms. It has ensured strict
compliance with the Current Good Manufacturing Practices (CGMP)
of the United States Federal Drug Administration.
• The Julphar I plant in UAE manufactures oral and topical
products with a capacity of over one billion tablets, 300 million
capsules, 45 million bottles of syrups and suspensions, 12
million bottles of drops, 10 million tubes of ointments and creams
and 50 million suppositories.
• Julphar II concentrates on injectible products, including a highly
specialized line of lyophilized products, ampoules, vials and pre-
filled syringes.
• Julphar III is dedicated to over-the -counter consumer products.
• The Ecuador factory of Julphar IV manufactures oral dosage
forms and supplies products throughout South America, while
• Julphar V, based at Eschewage in Germany, complies with EC
guidelines and caters to the European market.

Building Industry
The following companies have set up factories in RAKIA promoted
Free Zone and Industrial zone.
• Kludi Group, a German manufacturer of bathroom and
kitchen fittings entered into a collaboration with RAK
Ceramics to manufacture state of the art bathroom and
kitchen fittings.
• Germany-based Duscholux is a market leader in shower
enclosures and acrylic bathtubs
• Bemo Systems, Germany which is a part of Maas Profile
Group manufactures steel cladding.

15
 The Business Environment

Glass Industry
Other companies Glass manufacturing is a major sector in Ras Al Khaimah and some
industries present in companies who have factories in Ras Al Khaimah are:
Ras Al Khaimah
include:
• Arc International, one of the world's leading glassware
companies, established a plant in Ras Al Khaimah. ARC
Ashok Leyland is a International ME LLC (France) is the owner of brand name
commercial vehicle Luminarc tableware, glasses etc and supplies products to the
manufacturing
Middle East, the Indian subcontinent and South East Asia.
company. Its
operations in Ras Al • Guardian, a US-based multinational is one of the world's
Khaimah focuses on largest manufacturers of float glass and fabricated glass
bus assembly. products. Guardian is a joint venture company between
National Company for Glass Industries and Al Zamil Group.
Dabur India is a leading
manufacturer of Guardian Glass established a plant for sheet glass and float
Ayurvedic herbal and glass in Ras Al Khaimah. With an initial investment of US$
food items. Its 115 million, Guardian RAK produced 700 tons of glass per
operations in Ras Al day that will be used for the automotive and construction
Khaimah focuses on
hair oils and herbal
industries. This facility employs 300 people. Glass produced
products. at the facility will be sold in the Gulf Region and exported
globally.
Franke (Austria) is well- • RAK Ghani Glass LLC is a US$ 22 million joint venture
known for its kitchen
project between RAK Investment Authority, JS Group and
sinks and offers a
range of products. Its Ghani Glass Ltd; with each party holding 33.33 percent of
operations in Ras Al shares. The plant will be the first of its kind in the region,
Khaimah focus on using state-of-the-art technology to produce 45,000 tons of
washing systems. light weight pharmaceutical grade bottles annually. Target
Beaufort RAK LLC is a markets are the Middle East and East Asia. The plant is
joint venture between expected to start production in May 2008
RAK Investment
Authority and Swiss All these are in RAKIA Industrial zone.
entrepreneurs. Beaufort
is manufacturing
diapers and targeting Steel Industry
markets in the US, The steel industry in Ras Al Khaimah is witnessing increased activity
Europe and the region. with multinational companies setting up operations in RAKIA
industrial or free zones in Ras Al Khaimah
The JBF RAK plant, a
US$ 90 million plant in • Japan-based Mitsui is establishing a steel rolling mill in Ras
the Emirates, is a joint Al Khaimah.
venture with RAKIA. • South Korea’s Hanmaek Heavy Industries Co. Ltd has
The plant focuses on
polyester PET resin
operations in Ras Al Khaimah.
packaging chips. • RAK Steel is involved in manufacturing steel from scrap.
• Dammam-based Zamil Steel is a global leader in the design
Falcon Technologies and manufacture of pre-engineered steel buildings and has
has a hi-tech
CD-R/DVD-R
set up a Dh175 million plant in Ras Al Khaimah.
manufacturing facility • Kuwait’s Kirby Building Systems is the premier producer of
in Ras Al Khaimah. steel buildings and structures in the Middle East.
• Amana Contracting and Steel Buildings is a leader in design,
construction, and commissioning of commercial and
industrial buildings in the Middle East.

16
The Business Environment

Industrial Climate
The government of Ras Al Khaimah encouraged the manufacturing
Fiscal Benefits and service industries by creating infrastructure conducive to free
trade and free enterprise. The Ras Al Khaimah freetrade zone was
100% income and established for this purpose and existing industrial zones are also
corporate tax
exemptions
being expanded. The government streamlined licensing and other
regulatory procedures. In addition, the authorities assumed a
No Foreign significant role in developing water supply, electrical facilities,
exchange controls telecommunications and transportation. They also invested in
capital-intensive industries with long gestation periods such as
100% capital and
profit repatriation mining and extraction, cement and building materials.

Strong Taxation Policy

appreciating and There are no corporate or personal income taxes. Except for oil and
fully convertible
currency
gas-producing companies and branches of foreign banks in Abu
Dhabi, Dubai and Sharjah, there are no direct corporate income
Easy funding from taxes, nor are there any withholding taxes. The currency is fully
international banks convertible, and there are no restrictions or taxes on the repatriation
of capital or earnings.

Overseas Trade Relations

The UAE is one of the founding members of the Gulf Cooperation
Council (GCC) along with Bahrain, Kuwait, Oman, Qatar, and Saudi
Regulatory
Advantages
Arabia. The GCC was established to encourage closer economic
ties and trade relations between member states with the overall goal
100% ownership in of forging a single market.
Free Zones
Goods manufactured in the UAE that have a minimum of 40 percent
No trade barriers or of value added in the country qualify for a UAE country of origin
quotas
certificate and can be exported to other GCC member states free of
Easy licensing customs duty.
procedures
In 1994 the UAE joined the General Agreement on Tariffs and Trade
Simple import and
export policies
(GATT), resulting in harmonization of customs tariffs within the UAE
and the removal of
Liberal labour laws arbitrary
exemptions from
No restrictions on one Emirate to
hiring expatriates
another.

In 1996 the UAE

became the fourth
GCC state to be
accepted as a
member of the
World Trade
Organization (WTO). The advantages to the UAE of this
membership are access to new markets and the removal of barriers
to exports.

17
The Business Environment—Facilities and Infrastructure

Logistics
• Saqr Port— It has twelve berths, eight of which are owned by the
government handling bulk
cargo and the rest four
privately operated by KGL
that serves as a container
terminal.
• Al Jazirah Port—A brand new
port for bulk handling located
Transport and south of Ras Al Khaimah.
logistics are • Ras Al Khaimah Airport—With
important to a 3,760m runway,
economic
development
ILS and all
efficient physical navigation
movement and facilities, the
distribution of airport is fully
goods, services
equipped to handle
and people.
passenger flights
and cargo.
• RAK Airways -
RAK Airways, launched in December 2007, is the fourth national
airline of the United Arab Emirates, flying every day from its base
in Ras Al Khaimah.

Roads
In addition to the existing highway to Dubai, a super highway linking
Ras Al Khaimah to the rest of the UAE and Saudi Arabia has been
completed. Now a trip to Dubai Airport takes between 35 to 45
minutes.

ETISILAT Utilities
Electricity is available everywhere in Ras Al Khaimah at the rate of
0.055 USD / KW.

Desalination treatments ensure that water is available everywhere at

the rate of 0.03 Dirhams per gallon (0.0082 USD per gallon).

Transport
For people, the main form of transport in Ras Al Khaimah is taxi.
Taxis are economical and widely available.
For goods, trucks and pick ups are available at competitive rates (for
instance, a 40 ton truck is available for US$200.00 full day).

18
The Business Environment—Facilities and Infrastructure (cont’d)

Freight
Current rates for 20-foot containers from factory location in Ras Al
Khaimah to anywhere in:
• Europe: USD 900 to
1,400
• Australia: USD 600 to
Manpower Cost+ 700
• South Africa: USD
Unskilled Worker – 1,000 to 1100
USD 350
• South Asia and Far
Skilled Worker— East: USD300 to
USD 500 450 (Far East refers to
Container Terminal
Hong Kong, Singapore, Korea and Philippines)
Technicians
(Ele/Mech) –USD
700 These rates are cheaper than the rate for a container to move from
Italy to U.K. or from Italy to Germany.
Engineer
(Ele/Mech)—USD
1000
Fuel
Fuel is available in plenty for common use from petrol pumps at
Secretary—USD rates of:
500 • Super is 0.37 USD/ Litre
Accountant—USD
• Unleaded is 0.37 USD/ Litre
800-1000 • Diesel is 0.37 USD/ Litre
For industrial use:
Sales Executives— • Heavy fuel is 300 USD /Ton
USD 800-1000
• Diesel is 3.0 USD / Gallon
Managers—USD
1800-2500 Gas
LPG is commonly available for industry and private use. Tankers
+The above costs
are monthly which
transport LPG from UAE refineries to sites at about 30 percent
includes food, cheaper than
housing and international prices. The
insurance Government is also
working on the
installation of a natural
gas pipeline that will be
ready by the end of
2008, thus providing
natural gas at less than Power Plant
half the price of LPG.

Cost of Construction
Luxury Offices: 600 USD/m2
Factory Building, say 6M high, steel structure at 250 USD//m2

19
The Business Environment—Employee Affairs

Labour Relations
The workforce in Ras Al Khaimah is comprised mainly of expatriates
Currency who must be sponsored by their employer in order to obtain a
residence visa for the UAE. There is no restriction on manpower
The unit of recruitment from any country, thus allowing for a qualified and
currency is the
UAE dirham,
competitive workforce.
(denoted AED
internationally, and Labour laws are liberal. The employer has the right to terminate the
Dhs locally), which service of any employee by giving one month's notice. There are
is divided into 100
restrictions on the changing of jobs by expatriates except for certain
fils.
designated categories of employees. Trade unions do not exist in
Bills are Ras Al Khaimah; there is no organized labour movement and strikes
denominated in and lockouts are forbidden.
units of 5, 10, 50,
100, 200, and 500,
and coins are
The Government established the Ministry of Labour and social
denominated in 1, affairs for the effective handling of disputes between the employer
5, 10, 25 and 50 fils and employees. The Government of Ras Al Khaimah also offers
and 1 dirhams. specific need-based assistance to all investors in organizing the
recruitment for all their requirements. The Government even
The currency is
fully convertible provides assistance for arranging employee accommodation for
and is pegged to expatriate personnel.
the U.S. dollar.
Hints for Business Visitors—Visitors’ Visas
Since 1980 the rate
of exchange has
Gulf Corporation Council (GCC) nationals do not require a Visa for
been US$1 = UAE. The citizens of the following countries will be granted a free
AED3.671. visa on arrival: UK, France, Italy, Germany, the Netherlands,
Belgium, Luxemburg, Switzerland, Austria, Sweden, Norway,
Denmark, Portugal, Ireland, Greece, Finland, Spain, Monaco,
Vatican City, Iceland, San Marino, Liechtenstein, United States of
America, Canada, Australia, New Zealand, Japan, South Korea,
Brunei, Singapore, Malaysia and holders of Hong Kong SAR
passports.

Visiting business people can obtain two types of visas - either a 14-
day transit visa or a two-month visitor visa. A hotel or a business
registered to operate in the UAE can sponsor the transit visa. The
visit visa must be sponsored by a business registered to operate in
the UAE or by an individual holding a residence visa in the UAE,
provided the person is sponsoring an immediate blood relative and
earns a salary above a specified minimum amount. The 14-day
transit visa is not extendable. However, the two month visitor visa
can be extended once, by only one month. Prior approval of the
immigration authorities must be obtained for both types of visa.
Although federal law governs immigration, there are some variations
between the Emirates and regulations can change on short notice. It
is advisable to contact either UAE embassies abroad or the relevant
diplomatic representative in the UAE prior to departure.

20
The Business Environment—Employee Affairs (cont’d)

Business Hours
The traditional workweek is five and a half days, from Saturday
morning to Thursday lunchtime. However, there has been a recent
trend for international firms to operate all day Thursday and take a
two-day weekend on Friday and Saturday. There has also been a
Local Customs trend towards a straight shift in the private sector rather than the
traditional split shift. Friday is the official day of rest, and all
Ras Al Khaimah is Government offices, banks and businesses, except in the retail
an Islamic state, trade, are closed.
and although the
UAE is one of the
most liberal The labour law stipulates 48 working hours per week. However, the
countries in the overtime hours can be 12 hours per week if employee wish to work.
Middle East, local Working hours are shorter during the holy month of Ramadan,
beliefs and although business meetings can be held late in the evening.
traditions should
be respected.
Statutory Holidays
In particular, The dates of many statutory holidays are based on the Islamic
eating, drinking calendar, which follows lunar cycles and is approximately 13 days
and smoking in shorter than the Gregorian calendar. As a result, the dates
public during the
holy month of of some holidays, for instance Eid al Fitr at the ending of Ramadan,
Ramadan is not change every year. UAE national day (2 December) is a national
appropriate holiday and also first day of the beginning of the year is a public
between sunrise holiday.
and sunset.

Conventions Dates and Numbers

regarding dress are The order of dates and numbers varies according to the use of
liberal, but care English or Arabic text. The Gregorian calendar is used with English
should be taken text. Dates are written in the order day, month and year i.e. 30/6/04
not to cause
offence, for June 30, 2004. When numbers are written, commas separate
particularly in rural hundreds, and dirhams are separated from fils by a period, e.g.
areas, and it is 6,050 for six thousand and fifty AED and 6,000.50 for six thousand
preferable, dirham and fifty fils.
particularly for
women, to be more
conservative, than Dates in official Government publications are based on the
would be required Gregorian and Islamic calendars. The Islamic calender is
in the West. approximately 352 days long. It consists of twelve lunar months and
dates from the flight of the Prophet Mohammed to Medina on July
International Time 15, 622 A.D. Arabic text is written from right to left, although
numbers are written from left to right. Commas and periods are used
The UAE is four the same way as in English text.
hours ahead of
GMT and nine
hours ahead of
Eastern Standard
Time (EST) in
America. Daylight
saving time is not
observed.

21
Opportunities for Foreign Investment

Potential Areas
Ras Al Khaimah provides an attractive environment for various
investors. The following sectors offer good investment opportunities.

1. Global manufacturing bases for high value added industries

with high regional growth potential, such as:
a. Electronic / White Goods
b. Garments
c. Rubbers and plastic components, products
d. Paints and additives
e. Pharmaceuticals
f. Packaging
g. Leisure and entertainment
h. Furniture / Kitchenware
i. Electrical & Infrastructure projects

2. Hotel projects and promotion:

Hot water springs, sand dunes, mountains and scenic locations
provide attractive opportunities for investors in tourism-related
projects.

3.International maritime related industries and services,

including maintenance and fabrication works for the shipping sector,
to cater for regional and international market requirements

4. Warehousing, cold stores, transport and distribution services

for foodstuffs and commodities, packing for local and re-export
purposes.

5. Hospital projects with specific facilities

6. Mining, minerals exploration, extraction and quarrying

projects

7. Agro-industrial related investment area such as the food

industry and dairy-based products

8. Airport management services to meet the growing needs of Ras

Al Khaimah International Airport

9. Investment in the proposed Arabian Adventures Theme Park

and management of the Project

10. Free zone based activities with emphasis on local, regional

and international markets and projects

22
Opportunities for Foreign Investment (cont’d)

Other Important Hints for Foreign Investors

Considerations Investment Incentives
The principal investment incentives are the favourable tax and
Issue of visit and customs-duty environment, the absence of restrictions on
residence visa repatriation of capital and profits, 100% foreign ownership in the
Open door policy
three Ras Al Khaimah free zones of Business, Industry and
technology and cheap land, reliable sources of water and electricity,
Single window excellent supply & distribution chain and robust infrastructure made
clearance for available by the government.
permits and
consents
Investment Possibilities/Restrictions
Every investor Foreign ownership of businesses regulated by Federal Commercial
receives personal Companies Law is generally limited to a maximum interest of 49
attention percent outside of free zones. Foreign investors may operate as
Cost and time
general partners in any form of partnership. However, companies
savings can open 100 percent foreign-owned branches in the UAE, and 100
percent foreign ownership of businesses in the free-zone areas is
Good roads, possible.
drainage and
sewage facility
Prior Approval or Registration
Good All foreign firms planning to set up a branch in the UAE must register
telecommunication with the local Chamber of Commerce and Industries, the Economic
facility and Development Department and the Ministry of Finance.Other firms
immediate phone
and broadband
that have UAE nationals as majority shareholders must register with
connection the Ministry and the local Emiri authority. Firms setting up in free-
zone areas must register with the individual free-zone authority. RAK
Investor breaks Investment Authority is a government body responsible for issuing
ground within 3 licenses in the free zone as well as in the non free zone areas. It is a
months of signing
lease contract as onestop- shop for all the permits an industry requires to operate in
against 12-18 Ras Al Khaimah.
months elsewhere
Possible Business Structure
Excellent local and
international banks
In general, foreign investors participate in limited liability companies,
for funding project open 100 percent foreign-owned branches or representative offices,
finance or set up in a free zone area. These forms of business entities offer
the investor most of the control over business operations and are
Proximity to entire
relatively easy to establish. Even a 100 percent foreign owned
gulf and global
markets company or an individual is allowed to have a 100 percent
ownership in a free zone.
Affordable hotels,
sports and leisure Tax-Planning Considerations
facilities
Firms located in the free-zone areas are given guarantees that they
will not be taxed or face restrictions on the repatriation of funds for at
least 15 years from the date of establishment. Thus, tax-planning
considerations about doing business in the UAE chiefly deal with
issues in the foreign investor's country of origin

23
Entering the Ras Al Khaimah Market

Regulatory Framework
Under the UAE law, nationals must have at least 51 percent
shareholding in joint or foreign ventures established outside free
zones. Foreign companies or individuals wanting to do business in
the UAE must at least have a sponsor or service agent and obtain a
Foreign companies trade license. The RAK Investment Authority may choose to partner
must register with with investors on request and where the project meets the overall
the local Chamber objectives of the Emirate. There are several ways of establishing a
of Commerce and
business presence in the UAE, most of which have varying degrees
Industry, the
Economic of compulsory local participation. The most commonly used methods
Development by which foreign businesses establish a presence in the UAE are:
Department and • Appointing a commercial agent
with the Ministry of
• Incorporating a limited liability company in the UAE
Finance.
• Establishing a branch or representative office of a foreign
company
• Establishing a professional partnership or professional sole
proprietorship
• Incorporating a company or establishing a branch office in the
RAK Investment Authority Free Zone

Commercial Agents
Generally a foreign business operating in the private sector can
supply products to its customers directly in the UAE and therefore
does not need to appoint an agent. However this method of
operation may not be appropriate where no client base has been
established or a potentially high volume of business is to be
conducted. In addition, foreign companies may be required to
appoint a commercial agent in order to tender for projects in the
UAE (examples include Government projects such as oil and gas
supply services).

Registered Agency Agreements

The UAE Agency Law provides that only UAE nationals or 100
percent UAE-owned companies may be registered as commercial
agents. Registered agency agreements must be formally notarised
before being registered with the Federal Ministry of Economy &
Commerce. Registered commercial agents are given substantial
protection under the UAE Agency Law, including the exclusive right
to market and sell a specified product in at least one Emirate. Where
the principal or another agent sells such products in the same
Emirate, the registered agent will be entitled to commission payable
on these transactions regardless of whether the registered agent
contributed to them.

24
Entering the Ras Al Khaimah Market (cont’d)

Unregisterd Agency Agreements

It is possible to enter into an agency agreement that is not capable
of registration with the Federal Ministry of Economy & Commerce.
The UAE Agency Law does not apply to unregistered agency
agreements and therefore the difficulties associated with exclusivity
. and terminating registered commercial agents generally should not
arise. However the practical protection afforded to unregistered
commercial agents varies from Emirate to Emirate.

Strictly speaking, a foreign business that supplies products to its

agent pursuant to an unregistered agreement may be precluded
from enforcing payment for such products through the courts.
However, claims can be heard under the provisions of the UAE Civil
Code. It is nonetheless advisable to insist on a guaranteed method
of payment or alternatively enter into a separate side agreement with
the agent that details the required method of payment. In all cases,
commercial agency agreements should be carefully drafted and it is
advisable to seek competent legal advice before entering into one.

Incorporating a Limited Liability Company

Under the UAE Commercial Companies Law, foreign investors can
conduct business through LLCs.

UAE National Partner Requirements

An LLC can be incorporated with a minimum of two and a maximum
of fifty shareholders provided a UAE national holds not less than 51
percent of the shares. Whilst a foreign partner's equity in the
company may not exceed 49 percent, profit and loss distribution can
be prescribed to favour the minority shareholder in ratios of up to
90/10 in Ras Al Khaimah. However, it is expected that a new
provision in law to consider the foreign ownership up to 70 percent
with the majority of the ownership vested with the foreign partners.
Responsibility for the management of an LLC can be vested in the
foreign or national partners or a third party. It is possible to enter into
various side agreements with the UAE national partner to protect
and define the interests of the minority partner, particularly in
situations where in reality the minority partner provides all the capital
in the company.

Capital Requirements
Whilst it is necessary to show that capital has been deposited in a
UAE Bank in order to establish an LLC, the capital may be released
once the company has been registered with the Ras Al Khaimah
Chamber of Commerce.

25
Entering the Ras Al Khaimah Market (cont’d)

Branches and Representative Offices of Foreign Commercial

Companies
A foreign company can establish a branch or representative office in
the UAE. The registration of a branch/representative office of the
foreign company does not constitute the establishment of a new
company or separate legal entity. Consequently, the foreign
company will be fully responsible for the liabilities of its
branch/representative office. A representative office theoretically is
limited to gathering information and marketing the activities of its
parent company and is issued with a professional (i.e. non-trade)
licence. By contrast, a branch office is a fully-fledged business,
permitted to perform contracts or conduct other activities in the
name of its parent company. Such activities must be specified on the
branch office trade licence and must be related to the objects of the
parent company.

Professional Partnerships and Sole Professional

Proprietorships
Professional partnerships may be formed between two or more
individuals carrying out 'noncommercial' or professional/artisan
activities. An individual can also conduct such activities through a
Private Joint professional licence issued in his or her own name. These types of
Stock Company businesses may be 100 percent foreign-owned but are generally
required to appoint a UAE national agent similar to those required by
Its shareholders branch and representative offices. Individuals conducting business
must not be under a professional partnership or a sole professional
fewer than three proprietorship are liable to the full extent of their assets for the
and must liabilities of the business. Examples of professional partnerships or
subscribe to its sole professional proprietorships include those rendering legal
full capital of at advice, auditing and accounting services, civil engineering,
least AED 2 architectural consultancies and services, managerial and economic
million (USD consultancy, educational services, medical services, technical and
545,000). A other similar services.
private joint
stock company is Public Joint Stock Company
not allowed to As per the draft Federal Corporate Law, a public joint stock company
put up its shares must have a minimum capital of AED 15 million (USD 4.08 million)
for public and the number of its shareholders must not be below 10. It must be
subscription. licensed by the Ministry of Economy and Commerce and must be
approved by the Central Bank if it covers banking or investment
activities. Founders of the company must subscribe at least 20 per
cent of its capital and a maximum of 45 per cent. A single
shareholder must not subscribe more than 10 per cent of the capital.
The board of directors must not be fewer than five and not over nine
and must have a term of three years in office. Each member must
control a minimum AED 100,000 (USD 27,250) of its shares and is
not allowed to hold that post in more than three companies in the
country at a time.

26
Entering the Ras Al Khaimah Market (cont’d)

Free Zone Businesses

It is possible to establish branches of foreign companies in the UAE
free zones or to incorporate a free zone entity. Businesses such as
single shareholder limited liability companies, commonly known as
Establishing a free zone establishments, and free zone companies with two to five
Company with shareholders can be incorporated.
RAK Investment
Authority Procedure
(RAKIA) Companies wishing to operate in Ras Al Khaimah must obtain a
suitable license, renewable annually, from RAK Investment Authority
and enter into a pro-forma lease agreement for land. Long term
RAKIA offer
foreign investors
leasing of land is possible with 25 years renewable to similar
the opportunity periods. Various corporate documents similar to those required for
to establish a the setting up of LLCs or branch offices must be also submitted.
business
presence with The Regulatory Environment
100 percent Legislation and Translation of Documents
foreign Most documents originating outside the UAE must be notarised and
ownership in its legalised through diplomatic channels prior to being submitted to the
free zones. It also UAE authorities. In particular, documents should be certified by a
issues Notary Public and then legalised by the UAE Embassy or consulate
companies
in the country in which they originate. If there is no such office in that
licenses to
operate with a country, legalization through any other Gulf or Arab Embassy is
local or GCC acceptable.
partner. If a
foreign business With the exception of some documents required to establish entities
based in the free in the Ras Al Khaimah Free Zones, most documents originating
zones wishes to outside the Ras Al Khaimah will also need to be legalised by the
sell products UAE Ministry of Foreign Affairs. Once legalised it is usually
within the UAE, it necessary to obtain a certified Arabic translation of corporate
may only do so documents before these can be submitted to the UAE authorities.
through a
distributor or an
Legalisation fees vary, ranging from AED 100 (approximately USD
agent licensed in 27) for a simple
the UAE. degree
certificate to
AED 2,500
(approximately
USD 680) for a
company's
Memorandum
and Articles of
Association

27
Entering the Ras Al Khaimah Market (cont’d)

Fees, Taxes and Charges

With the exception of foreign banks and oil companies there is no
S&P Credit corporate or individual tax levied in the UAE. Annual fees are
Rating for RAK- payable to the local department in each Emirate in order to obtain
A+ and renew business licenses. Additional fees may also be payable
to the pertinent Chamber of Commerce and other government
FDI magazine has departments. There are no taxes or duties on import of raw materials
ranked RAK as for industries in UAE. There is presently a 5 percent import duty on
“the most cost
most goods entering the UAE. Additional and possibly substantial
effective
investment
duties are levied on products such as alcohol and tobacco.
destination.”
Land Ownership
As a general rule, foreigners are not permitted to own land and all
Monopolies and property must be leased or rented for the purposes of doing
Antitrust business. A notable exception extends to certain residential
developments in Ras Al Khaimah and Dubai. Steps have been taken
There is no to allow foreigners to own and register properties in developments
monopoly or such as the Al Marjan island, Dana Island, Mina Al Arab with Al
antitrust Hamra village in Ras Al Khaimah through Government order to
legislation in the Lands department.
UAE.
Price Controls
Price controls in the UAE are limited to a few items, such as
medicines and petroleum products.

Acquisitions and Mergers

The Federal Commercial Companies Law permits acquisitions and
mergers if they are carried out in accordance with the provisions
adopted for the amendment of the company's memorandum and
articles of association are approved by the competent authority
specified for that type of company. Acquisitions and mergers must
comply with the law relating to minimum local ownership.

Consumer Protection
There is no specific consumer protection legislation. However, there
exist legal provisions for unfair trading practices/ cheating. "Law of
suppression against commercial deceits" is a separate legislation
specially applied in trademark infringement cases.

Special Industries
Industries subject to specific regulatory laws include banking,
financial services, brokerage, and insurance.

28
Entering the Ras Al Khaimah Market (cont’d)

Patents, Trademarks and Copyrights

As a precursor to its membership in the World Trade Organization,
the UAE introduced intellectual property rights legislation governing
the registration of patents, trademarks and copyrights, which came
into effect between 1992 and 1994.

The UAE operates a strict enforcement policy of its piracy and

patent laws, seeing the protection of creativity as a necessity in itself
and protection of the rights of investors. As a member of the World
Intellectual Property Organisation (WIPO), the UAE acceded to the
Paris Convention for the protection of industrial property in 1996
following the implementation of three intellectual property laws in
1993. The rating of the UAE in the world piracy is now in line with
most ratings of the European countries.

• Trademarks can be registered in the Trademark Register

maintained by the Ministry of Economy and Commerce.
Protection lasts for ten years and can be renewed for a further
ten years. Violators face monetary fines and possible
imprisonment. In addition, they may have their goods confiscated
and be made to pay damages to the trademark holder.
• Patent Law covers inventions, industrial designs and models,
and technical know-how and is enforced by the Ministry of
Finance and Industry. Patent protection lasts for 15 years and is
renewable for a further period of not more than five years. The
protection period for industrial designs is five years and is
renewable for two further successive five-year periods. Penalties
for breaching the law include fines and possible imprisonment.
• Copyright Law covering original work, including work on
cassettes and video and computer software, is enforced by the
Ministry of Information and Culture. Copyright protection varies
from 10 to 15 years depending on the type of classified material
for which protection is being sought. Penalties for violating the
law include fines and imprisonment.

29
The RAK Investment Authority (RAKIA)

Overview
The RAK Investment Authority (RAKIA) was constituted as per Emiri
Decree No. (2)/ 2005 issued by H.H. Sheikh Saqr Bin Mohammed Al
Qasimi, Supreme Council Member and Ruler of Ras Al Khaimah.
The mandate for
RAKIA is to work Vision
towards reinforcing Globalisation and regionalization trends make it essential for
the investment institutions and governments to be more efficient and flexible in
climate in the
order to compete in the market place. RAKIA’s vision is that it
Emirate and to
promote its various becomes a leading authority in making sound investments in Ras Al
economic sectors. Khaimah and partner with others who share our vision, enabling
them to achieve their objectives, at the same time creating a
sustainable and growing economy.

Mission
To provide the vehicle for our investors to be able to setup
sustainable business in an effective way, through the
implementation of simplified processes, while empowering our staff
to reach new levels of excellence in providing unmatched customer
service. In doing so, we ultimately achieve the goal of improving the
quality of lifestyle for all our partners, employees and stakeholders.

Under the direction of H.H. Sheikh Saud bin Saqr Al Qasimi, the
Crown Prince & Deputy Ruler of Ras Al Khaimah, we are pursuing
the goal of making Ras Al Khaimah a regional hub for industrial
manufacturing, service sector and tourism. RAK’s GDP has grown
by more than 50 percent over the last four years. The growth is
driven by increased focus on manufacturing, services, real estate,
construction and tourism. The Application procedure is below:
1. Prepare and present a project report on your business
and contact our head office
2. Submit an application form
3. Applications are reviewed and accordingly approval
granted and license issued

Types of Licenses
Industrial License
Activities allowed: Import raw materials, manufacturing, processing,
assembling, packaging, and exporting finished products. Feasibility
and environmental impact studies and clearance from RAKIA are
required.

Commercial License
Activities allowed: Import, export, distribution, consolidation, storage
or warehousing of items specified on the License.

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The RAK Investment Authority (RAKIA) (cont’d)

Consulting and Service License

Activities allowed: Offering consulting services in management,
finance, investment, legal issues, labour relations, economics
(including feasibility studies), industrial development, marketing, and
related subjects.

Other services include logistical support such as: restaurants or food

outlets, catering services, travel agencies, leisure and social
activities, insurance, cargo and freight forwarding, accounting, and
audition services.

Commercial—General Trading License

A General Trading License can be obtained under a Commercial
License, which allows for more then seven product lines.

Types of Entities
Free Zone Company (FZCO)
FZCO is a limited liability company incorporated with RAK
Investment Authority, by more than one shareholder with a distinct
legal entity and independent financial liability. The Capital
requirement for setting up FZCO with RAK Investment Authority
Free Zone is AED 250,000.

Free Zone Establishment (FZE)

FZE is 100 percent
owned by either a person
or a corporate body. It
enjoys the status of a
separate legal entity. The
Capital requirement for
setting up a FZE with
RAK Investment
Authority Free Zone is
AED 150,000.

Local / UAE Branch

Licenses under this category are issued to companies holding a
valid license from any UAE licensing authority except from other
Free Zones.

Foreign Branch
Licenses under this category are issued to companies established
outside the UAE seeking to open a branch in the RAK Investment
Authority Free Zone. The ownership of the company should be 100
percent foreign. However, sales can be made through a UAE-
registered agent or a distributor only. The activity may be
commercial, industrial or professional/services.

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Documents Required for Registration in RAKIA Free Zone/Industries

S. FZ Co.
Details of the Documents Branch FZE(Indiv.) LLC Requirements
No. (Non-Indiv.)
Certificate of Registration (or)
1. * * * Attested & Notarised
Certificate of Incorporation
Memorandum of Association
2. * * * Attested & Notarised
of parent Company
Board resolution calling to
establish a branch in RAKIA
3. FZ/Ind. Zone and * * Attested & Notarised
guaranteeing full financial
commitment.
In case of individual FZ LLC
4. applicants the above should Attested & Notarised
be in the form of a letter
Appointment of negotiator or
legal representative(optional)
- Power of attorney, speciman
5. of his/her signature and valid * * * * Attested & Notarised
passport copy.(In case of Co.
Supporting Board Resolution
will be required.)
Applicant's personal details,
profile, specimen of
6. *
applicant's signature and
valid passport copy.
7. Original Bankers's reference * * * Original

Attachment of the following:- *

(a) Manager's Specimen
signature + Power of Attorney
+ Passport Copy
* * *
(b) Director's Specimen
8. * * * Attested & Notarised
signature + Power of Attorney
* * *
+ Passport Copy
(c) Secretary's Specimen
signature + Power of Attorney
+ Passport Copy
Bank Certificate(For capital
9. * * * Original
contribution)

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Al Ghail Industrial Zone

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Location of Al Ghail

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Contact Details

RAK Investment Authority

Government of Ras Al Khaimah
P.O. Box: 31291, Ras Al Khaimah
United Arab Emirates

Tel: 00971-7-244 65 33
Fax: 00971-7-244 72 02

E-mail: info@rakinvestmentauthority.com
Website: www.rak-ia.com

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Prepared in Association with

s.

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