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Incorporation of a free zone company in Ras Al Khaimah Economic Zone (RAKEZ). Service offer

Located in the very heart of Ras Al Khaimah, RAKEZ is a strong industrial center in the United Arab Emirates that offers diverse business solutions. RAKEZ allows for formation of offshore and onshore (free zone) companies.

Establishment of onshore companies implies possibility to obtain resident visas for members/employees, as well as their families, which is undoubtedly an advantage. Moreover, substance is created for onshore companies in the form of a leased office or a flexi desk/flexi office workplace. Office requirements for onshore companies may differ depending on the kind of license for a certain activity.

Main advantages of doing business in the UAE:

  • Stable banking system, high possibility of opening an account with banks of the UAE;
  • Possibility to work with US dollars;
  • Quick company incorporation;
  • Possibility to create substance in the country of incorporation;
  • Possibility to obtain a resident visa for company’s shareholders and employees.

Budget for the creation of business in RAKEZ[1]

Service
Cost (USD)
Incorporation of a company in RAKEZ, including[2]:
- company incorporation (name check; collection, preparation and submission of documents for incorporation; selection of a licence; delivery of original corporate documents);
- liaising with government authorities regarding all matters of the company;
- maintaining the company’s online service portal with the free zone and migration authorities;
- monitoring changes in legislation, informing about changes and the need to revise the activities / structure of the company;
- compliance check;
- postal services (collection / delivery of documents and other correspondence);
- company seal.
The above price also includes the state fees billed by the Free Zone for company registration, issuance of a license for 1 type of activity and flexi desk office.
Other options are available upon request.
10 900
Obtaining a residence visa (cost of one visa – investor visa), including:
- Government fees (Entry Permit, Medical Fitness Report & Emirates ID, Visa Stamping on the Passport);
- preparing, executing and agreeing the necessary documentation with the migration authority;
- accompanying the client to a medical clinic for medical examination;
- accompanying the client to the Federal Migration Service for fingerprinting and biometrics;
- submitting to the migration authority documents for issuing and stamping a visa;
- filing an application for and obtaining a residence card;
- selecting an insurance company for medical insurance (if required);
- transport expenses.
4 200
Assistance with opening corporate and personal bank accounts[3]
500 (Stage I)
2 000 (Stage II)
750 (Stage III)
Total:
USD 18 350

[1] VAT of 5% is applied.

[2] The cost of package may vary depending on the number of shareholders, type of licence, and size of office (office size dictates how many residence visas a company can have).

[3]The description of the account opening stages and the conditions for charging an additional success fee can be found below, in the Fees section.

COMPANY INCORPORATION

The procedure of incorporation of a company in RAKEZ:

1) The following has to be determined:

  • name of the company to be checked for uniqueness (at least three options): it may be in English or Arabic; it must not be identical or similar to the name of an existing company; it must end with an indication of the form of incorporation (“FZE”);
  • structure of the company (director, manager, secretary, shareholder, attorney);
  • amount of the authorized capital and distribution of shares among shareholders (a minimum authorized capital is prescribed for certain activities);
  • activity and regions;
  • kind of license and an office in RAKEZ suitable for the chosen type of license.

In RAKEZ companies may obtain the following kinds of licenses:

  1. Manufacturing license allows the holder to conduct goods production business, including raw material import, processing, production, assembly, packing and export of finished goods.
  2. General trade license allows the holder to trade in goods, including import, storage, warehousing, supply and export of permitted goods of different categories.
  3. Commercial license allows the holder to trade in goods, including import, storage, warehousing, supply and export of permitted goods.
  4. Service license allows the holder to provide the type of service stated in the license (for example, business consulting, marketing consulting, insurance and others).
  5. E-Commerce license allows the holder to trade in goods and services by electronic means.
  6. Education license allows the holder to provide educational services (organize educational institutions or consulting companies), including services in professional or management training.
  7. Media license allows the holder to engage in TV broadcasting, radio broadcasting, newspaper and magazine publishing and event organization.
  8. Individual/Professional license is issued to a company with one shareholder and allows it to conduct one activity within a narrow specialty.

Some licenses require consent of the relevant regulator, for instance, approval of the Ministry of Health of the UAE is required in order to open a clinic.

2) Payment for services

3) The following directors’/managers’/secretaries’/shareholders’/attorneys’ documents

have to be provided:

  • color passport copy;
  • document confirming the address (if it is not stated in the passport);
  • visa copy / UAE entry stamp;
  • CV.

For UAE residents Emirates ID has to be provided. If a UAE resident acts as a director, manager or attorney, a No Objection Letter by their sponsor will also be required.

At the meeting the original documents have to be provided for collation, or notarized copies.

The shareholders will have to sign a questionnaire form in order to undergo the compliance procedure.

In order to incorporate a company to conduct certain activities, a business plan will also be required.

4) Preparation of a set of documents for the incorporation of a company,

signing of the documents by company’s officers and shareholders.

5) Submission of an application for company incorporation

Upon completion of the incorporation of the company the following documents are issued:

  • Certificate of incorporation of the company
  • Articles of association
  • Share certificates
  • License to conduct business (as a general rule, issued for 1 year)
  • Registers of directors and shareholders
  • Office lease contract

The company seal is also handed over.

After the company has been incorporated one can proceed to obtaining visas and opening an account with a bank. A settlement account for the company may be opened with a UAE bank or with a foreign bank – for further information contact your consultant at GSL.

IMPORTANT: As the UAE is not a signatory to the Hague Convention of 5 October 1961 that abolished the requirement to legalize foreign official documents, in order to use documents of a local company in another country it is necessary to submit such documents for legalization to the consulate of that country.

The incorporation of a new company takes around 10 days.

OBTAINING A VISA

In the UAE there is no such thing as residence permit. The migration rules of the UAE imply issue of resident visas, which are practically an analogue to a residence permit.

A resident visa may be obtained on the following grounds:

  • based on the ownership of an onshore company incorporated in the UAE – investor’s visa;
  • by entering into an employment contract with an onshore company incorporated in the UAE – work visa.

The number of resident visas depends on the business package chosen at the incorporation of the company.

Normally a resident visa is issued for 2 years.

Upon expiration a visa may be renewed.

The procedure of obtaining resident visas is as follows (one may start obtaining a visa only after the company has been incorporated):

  1. Obtaining an Establishment Card (opening the migration file of the company) – 3-5 days. This document is necessary to enable the company to apply for resident visas in the future.
  2. Submission of documents for a resident visa and obtaining an Entry Permit – 5-7 days. To obtain a resident visa it is necessary to enter the UAE on an Entry Permit.
  3. Visiting the UAE to obtain a resident visa – in most cases a visa may be obtained within 5 workdays. The applicant must: undergo medical examinations (blood test and fluorography); give biometric data (retina scan and fingerprints). Once the passport with a resident visa in it is received the country may be left.
  4. Obtaining a resident’s Emirates ID.

The card is issued a few days after the issue of the visa. Personal presence is not required to receive it.

IMPORTANT: Permanent residency in the UAE is not required; however, a resident visa will be cancelled in the case of absence from the UAE for over 6 months

The cost of obtaining a resident visa in RAKEZ starts at USD 4 200. For further information on the procedure of obtaining it contact your consultant.

COMPANY STRUCTURE REQUIREMENTS

DIRECTORS

minimum number:
one
individual / legal entity:
only individual
residency:
no requirement

SHAREHOLDERS

minimum number:
one
maximum number:
50
individual / legal entity:
individual / legal entity
residency:
no requirement

MANAGER

number:
only one
individual / legal entity:
individual
residency:
UAE resident

Companies incorporated in RAKEZ may also have a secretary; an individual or legal entity may be appointed such secretary. The same person may simultaneously be a shareholder, director, secretary, manager and authorized representative of a company.

AUTHORIZED CAPITAL

minimum amount of the authorized capital:
AED 10 000 May differ for separate activities

The authorized capital may be denominated in a currency other than AED only with the prior approval of state authorities of RAKEZ. Shares of different classes may also be issued only with the prior approval of state authorities of the emirate. Each share must be issued for AED 1 000 or a multiple thereof.

REGISTERED OFFICE

RAKEZ offers various office packages depending on clients’ necessities relating to the kinds and number of licenses, number of visas, need for substance and location in the free zone.

  1. Flexi desk and flexi office are a separate premises or cell in an open space in first class business centers. Kinds of licenses: commercial, service, general trade.
  2. Office – isolated premises of 6,5 m2 to 11,9 m2. Office – isolated premises of 6,5 m2 to 11,9 m2. Kinds of licenses: commercial, service, general trade.
  3. Administrative office – isolated premises of 12 m2 to 20 m2. Kinds of licenses: commercial, service, general trade.
  4. Auxiliary premises – large office, which can be shaped to fit specific demands of the client, of 120 m2 to 170 m2. Kinds of licenses: commercial, service, general trade.
  5. Warehouse spaces – heat insulated warehouse spaces with offices having different areas, starting from 150 m2. Suitable for all kinds of licenses.
  6. Plot of land – land for development of at least 2 500 m2. Kinds of licenses: commercial, manufacturing, general trade.

The number of resident visas that are allowed to be obtained may vary depending on the office taken on lease by the company. So, for example, flexi desk implies possibility to obtain only one resident visa.

SUBSEQUENT WORK WITH A COMPANY

The company must annually renew the licence, by paying a relevant fee, and the lease agreement.

Companies registered in UAE free zones are exempt from capital gains tax, property tax and other taxes, except corporate tax and VAT.

Corporate Tax

A federal corporate tax was introduced in the UAE on 1 June 2023. Free zone companies may be subject to both the standard rate of corporate tax (9%) and a zero rate. The application of a particular rate depends on a number of factors such as the company’s income, the types of its activities (whether they are excluded or qualifying, or not), counterparties, whether the company maintains adequate economic substance in the UAE, and other aspects.

In order to understand which corporate tax rate (9% or 0%) applies to your company, we recommend that you seek advice from our specialists.

VAT

Value added tax was introduced in the UAE on 1 January 2018.

VAT, as a general consumption tax, applies to all transactions with goods and services unless such transaction is exempt or taxed at the rate of 0%.

The standard VAT rate in the UAE is 5%.

There is no obligation to register for VAT purposes while the turnover in the territory of the country is below the registration threshold, which in the UAE is AED 375 000 (~ USD 100 000).

Registering as a VAT payer is compulsory in the following cases:

  • there is reason to believe that during the following 30 days taxable turnover will exceed the registration threshold (for example, a contract is entered into);
  • at the end of the month taxable turnover for the preceding 12 months actually exceeded the registration threshold;
  • the company receives services that are subject to inclusion in accounts under the reverse charge and that are worth over the registration threshold.

Voluntary registration is also possible after the taxable transactions threshold of AED 187 500 (~ USD 50 000) has been exceeded.

Registration with the Federal Tax Authority of the UAE and obtaining a Tax Reference Number (TRN) at least take 20 workdays.

After the registration with the Federal Tax Authority and obtaining a VAT payer number, a company must quarterly (and if its annual turnover exceeds AED 150 000 000 (~ USD 40 830 900), then monthly) prepare and file a VAT return, and pay arising VAT within 28 days after the end of the VAT period.

Before incorporating a company we recommend receiving consultation from a specialist of the non-resident audit department and tax consultant to determine tax burden of the company and discuss issues of further administration of the company.

Audit and accounts

Every company incorporated in RAKEZ must keep accounting records sufficient to confirm its financial position and containing up-to-date information on the assets and liabilities of the company. It is also necessary to annually prepare the company’s financial statements and undergo audit.

The reporting period of a company ends on 31 December of each year (the date of the first reporting period depends on the date of incorporation of the company[4]). A company is allowed 6 months from the date of the end of the period to prepare and file audited financial statements with state authorities.

Companies that have subsidiaries (where their ownership interest exceeds 50% of shares/stock) must prepare consolidated financial statements of the group.

Before incorporating a company we recommend receiving consultation from a specialist of the non-resident audit department and tax consultant to determine tax burden of the company and discuss issues of further administration of the company

Cost of services[5]

Service
Cost (USD)
Incorporation of a company in RAKEZ, including[6]:
- company incorporation (name check; collection, preparation and submission of documents for incorporation; selection of a licence; delivery of original corporate documents);
- liaising with government authorities regarding all matters of the company;
- maintaining the company’s online service portal with the free zone and migration authorities;
- monitoring changes in legislation, informing about changes and the need to revise the activities / structure of the company;
- compliance check;
- postal services (collection / delivery of documents and other correspondence);
- company seal.
The above price also includes the state fees billed by the Free Zone for company registration, issuance of a license for 1 type of activity and flexi desk office.
Other options are available upon request.
10 900
Annual renewal of the company, including:
- liaising with government authorities regarding all matters of the company;
- maintaining the company’s online service portal with the free zone and migration authorities;
- monitoring changes in legislation, informing about changes and the need to revise the activities / structure of the company;
- keeping track of the deadlines and making payments for the company renewal and the office lease agreement;
- postal services (collection / delivery of documents and other correspondence).
The above price also includes the state fees billed by the Free Zone for the renewal of the license.
Other options are available upon request.
9 200
Obtaining a residence visa (cost of one visa – investor visa), including:
- Government fees (Entry Permit, Medical Fitness Report & Emirates ID, Visa Stamping on the Passport);
- preparing, executing and agreeing the necessary documentation with the migration authority;
- accompanying the client to a medical clinic for medical examination;
- accompanying the client to the Federal Migration Service for fingerprinting and biometrics;
- submitting to the migration authority documents for issuing and stamping a visa;
- filing an application for and obtaining a residence card;
- selecting an insurance company for medical insurance (if required);
- transport expenses.
4 200
Renewal of a residence visa (cost of one visa – investor visa).
Renewal of a residence visa (investor visa is issued for 2 years) requires taking the same actions and paying the same fees as upon initial application.
4 200
Assistance with opening corporate and personal bank accounts, including[7]:
== services of:
- analysing the company’s structure, its activities / business model / turnover OR, in the case of a personal account, information on the individual’s sources of funds / residence / account balance;
- selecting banks individually for you – up to 3 options;
- preparing descriptions of banks indicating the criteria by which they were selected;
- preparing a description of further steps in the account opening procedure;
500 (Stage I)
== services of:
- collecting and analysing the corporate and other documents required to be submitted to the selected bank;
- putting together a detailed account opening application, including complete information on the company, its owners and counterparties;
- sending the application to one of the banks of your choice;
- preparing a detailed description of all further steps in the account opening procedure;
- preparing for an interview;
- accompanying you to a personal / online meeting with a banker if necessary;
- interacting with the bank at ALL stages;
2 000 (Stage II)
== payment of the remainder of the full fee – after receiving notification from the bank that the application is under final review by the bank’s compliance team;
750 (Stage III)
== an additional success fee is charged if the account is opened faster than the average standard procedure time, which is:
- for corporate accounts – 3 months,
- for personal accounts – 1 month.
+ 10% to the fee
for the service
Compliance fee
Payable in the cases of:
- renewal of a company,
- liquidation of a company,
- transfer out of a company,
- issue of a power of attorney to a new attorney,
- change of director / shareholder / beneficial owner, except the change to a nominee director / shareholder,
- signing of documents.
350 (standard fee – includes check of 1 individual)
+ 150 for each additional individual (director, shareholder or beneficiary) or legal entity (director or shareholder) if legal entity is serviced by GSL
+ 200 for each additional legal entity (director or shareholder) if legal entity is not serviced by GSL
450 (rate for High Risk companies, includes check of 1 individual)
100 (signing of documents)
Keeping accounting records of the company’s business. Systematic archiving of the company’s documents and provision thereof to the client on request.
200 / hour
Preparation of financial statements, audit of the company’s business and filing of financial statements with the authorities of the free zone.
400 / hour[8]
Registration for VAT purposes.
1 500
Preparation and filing of VAT returns.
200 / hour
Tax consultation on VAT and other issues.
400 / hour

[4] If a company is incorporated in the first half of the year, the date of the company’s first reporting period is 31 December of the same year; if a company is incorporated in the second half of the year, the date of the first reporting period is 31 December of the year following the year of incorporation.

[5] VAT of 5% is applied.

[6] The cost of package may vary depending on the number of shareholders, type of licence, and size of office (office size dictates how many residence visas a company can have).

[7] For more details on how fees for account opening assistance are charged, please contact your GSL consultant.

[8] The fees for preparing financial statements and conducting an audit are charged based on the time spent at hourly rates ranging from USD 100 to 400, depending on the type of work and qualification of a specialist involved, but not less than USD 2 200 – fees for audited financial statements with a minimum number of transactions.

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10900 USD
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