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

• No profit tax;
• 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.

[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).

The procedure of incorporation of a company in RAKEZ:

• 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.

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.

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

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.

The incorporation of a new company takes around 10 days.

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.

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.

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 1 000 AED or a multiple thereof.

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.

A company must annually renew its license, by paying the relevant fee, and lease contract.

Companies incorporated in free zones of the UAE are exempt from profit tax, capital gains tax, property tax and other taxes, except 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%.

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 375 000 AED (~100 000 USD).

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 187 500 AED (~ 50 000 USD) 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 150 000 000 AED ~ 40 830 900 USD, then monthly) prepare and file a VAT return, and pay arising VAT within 28 days after the end of the VAT period.

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[3]). 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.

[3] 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.

[4] VAT of 5% is applied.

[5] 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).

[6] 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 1 900 – fees for audited financial statements with a minimum number of transactions.