RAK ICC (Ras Al Khaimah, United Arab Emirates)
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International Business Company (Company limited by shares)
A RAK IC is the most popular offshore company in UAE.
Previously, there were two offshore registrars available in Ras al Khaimah, RAKFTZ and RAKIA, which offered two different offshore structures, RAK IBC, and RAK Offshore. In 2016 the two registrars were merged into RAKICC (Ras al Khaimah International Corporate Center).
International companies are entitled to do business internationally and may not carry out trade or business within the UAE, or any free zone.
International companies are generally allowed to carry out activities such as international trade, overseas consulting and advisement, international professional services, holding company, hold intangible assets, investment, and joint investment company, intermediary brokers, overseas property owning, shipping and ship management.
Any activity related to banking, insurance, assurance, reinsurance, fund management, collective investment schemes, trust management or trusteeship, is strictly prohibited.
As they are considered non-residents, they cannot benefit from UAE tax treaties. However, they are usually authorized to own shares of FZ or local companies, or even establish a branch onshore.
An international company in the UAE is an instrument for international trade, asset protection and wealth management.
Legal
Country code – AE
Legal Basis – Although the legal code in UAE is based on Sharia and Civil Law, the Ras Al Khaimah International Corporate Centre is based on common law principles.
Legal framework – Ras Al Khaimah International Corporate Centre Business Companies Regulations 2016
Company form – International Company (Company limited by shares) (LTD)
Liability - The liability of a shareholder to the company is limited to any amount unpaid on a share held by the shareholder.
Business restrictions – International companies may not carry on business with persons in the Free Zone, carry on any other business which may, by regulations made by the Authority, be prohibited by the Authority, carry on banking business in the UAE or the Zone; or carry on business as an insurance or reinsurance company, insurance agent or insurance broker in the UAE or the Free Zone.
International companies may make or maintain professional contact with legal consultants, accountants, management companies or other similar persons carrying on business within the Free Trade Zone; maintain books and records within the Free Trade Zone, hold within the UAE Free Trade Zone meetings of its directors or members; hold a bank account in the RAK Free Trade Zone for the purpose of conducting its routine operational transactions; or hold assets in areas of the Free Zone designated by the Authority.
Share capital – There is no minimum share capital requirement. The memorandum of a Company Limited by Shares shall state the maximum number of shares that the company is authorized to issue or an unlimited number of shares; classes of shares that the company is authorized to issue and, if the company is authorized to issue two or more classes of shares, the rights, privileges, restrictions and conditions attaching to each class of shares.
A company may issue shares with and without par values. A share with par value may be issued in any currency. Issuance of fractional shares is also permitted. The company may issue bonus shares, partly paid shares or nil paid shares. Bearer shares are not permitted.
Shareholders – The company may be formed by a minimum of 1 shareholder, who can be an individual or a corporation, and may be non-resident. Details of the shareholders are not disclosed on a public file.
Directors – At least one director is required, who may be a natural person or a legal entity, and may be non-resident. Details of the directors are not disclosed on a public file.
Secretary – The appointment of a secretary is required, who can be either a legal or natural person and may be non-resident.
Registered Address – International companies shall at all times have a registered agent, who has been granted a license to provide registered agent services by RAK ICC. A company must have a registered office in the UAE, provided that if the company’s registered agent has an office in the UAE, the company’s registered office shall be the office of its registered agent; or outside the UAE only with the approval of the Registrar.
General Meeting – Annual general meetings are not mandatory, and can be held anywhere. Meetings can be held by telephone or other electronic means; alternatively, directors as well as shareholders may vote by proxy.
Electronic Signature – Permitted.
Re-domiciliation – A foreign entity can continue as a RAK ICC, and vice versa.
Compliance – International companies must prepare annual accounts, but there is no requirement to file them, nor annual return, nor taxa return, to any authority. Audits are not required except for liquidation.
International companies are subject to an annual government fee.
- Shareholders not disclosed
- Directors not disclosed
- Corporate shareholders permitted
- Corporate directors permitted
- Local director required
- Secretary required
- Local secretary required
- Annual general meetings required
- Redomiciliation permitted
- Electronic signature
- Annual return
- Audited accounts
- Audited accounts exemption
- Exchange controls
- Common law for corporate matters Legal basis
- 1 Minimum shareholders
- 1 Minimum directors
- - Minimum issued capital
- - Minimum paid up capital
- USDAny Capital currency
- Anywhere Location of annual general meeting
- 2018 AEOI
Taxes
Corporate income tax – RAK ICC companies are treated as nonresident entities for tax purposes, and therefore exempt from any form of taxes, as long as the place of effective management of the company is not in the UAE, and they do not constitute a permanent establishment in the UAE.
The place of effective management is generally understood to mean the place where the company is managed and controlled - determined by facts and circumstances, including the following:
- The place where meetings of the board of directors are held.
- The place where the company’s officers make their decisions.
- The place where other, similar factors evidencing management control occur.
A permanent establishment in the UAE could be constituted if the following occurs -
- the company has a place of business, a branch or an office in the UAE (e.g. employees working in the UAE); and/or
- the company has a dependent agent in the UAE who regularly exercises the authority to negotiate or conclude contracts on behalf of the company in or from within the UAE.
There are other situations where a permanent establishment may be constituted such as construction sites, mines, etc.
Other taxes – In U.A.E. there is no personal income tax, capital gains tax, real property tax, inheritance tax or estate duty, capital transfer tax, gifts tax or wealth tax.
There is a real property tax levied on the transfer of properties, at rates that vary from 2% to 4%, depending on the Emirate where the property is located. Some municipalities, e.g. Dubai, also levy an annual property tax on the assessed rental value of the property.
There is V.A.T. at 5% on most goods and services. However, as RAK ICC companies do not generally trade within the UAE, V.A.T. is not generally relevant.
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- 0% Offshore Income Tax Rate
- - Corporate Tax Rate
- 0% Capital Gains Tax Rate
- 0% Dividends Received
- 0% Dividends Withholding Tax Rate
- 0% Interests Withholding Tax Rate
- 0% Royalties Withholding Tax Rate
- 0 Losses carryback (years)
- 0 Losses carryforward (years)
- 0% Personal Income Tax Rate
- 5% VAT Rate
- 76 Tax Treaties
Country details
The United Arab Emirates is a former British protectorate and currently a federation of the Middle East, located to the east of the Arabian Peninsula. It borders Oman to the southeast, with the Persian Gulf to the north and Saudi Arabia to the west and south. It is composed of a hybrid monarchy consisting of 7 emirates, Abu Dhabi, Ajman, Dubai, Fujairah, Ras al Khaimah, and Umm al Qaywayn.
It has a population of 9 million. Its capital is Abu Dhabi, but the most populated and popular city is Dubai. Arabic and English are their official languages. The official currency is the United Arab Emirates Dirham (AED), pegged to the US dollar at an exchange rate of 3.67:1.
The Supreme Council, made up of each emirate Sheikhs, is the highest political decision-making body in the country. Although each Emirate retains a considered political, economic and judicial autonomy, with different rules and regulations.
The federation is one of the richest countries in the world, supported by a liberal and open economy with the eighth highest per capita income worldwide and a considerable annual trade surplus.
Having the seventh largest oil reserve in the world, its economy is clearly dependent on this commodity fluctuations. In recent years efforts have been made to diversify the economy, be less oil-dependent and develop sectors such as retail, financial and tourism.
A clear example of this strategy is the establishment of free zones to attract foreign capital to invigorate the private business sector.
The Ras Al Khaimah’s Free Zones are some of the most attractive areas to establish a business in UAE and one of the fastest growing business hubs. The emirate of Ras al Khaimah is in the northern part of the country, well connected by express roads, an approximately 1-hour drive from Dubai. One of the biggest advantages of RAK is that business and living costs are one of the most affordable in the country.
The area is comprised of four economic clusters, the business park for offices, the industrial park for heavy industries and warehousing, the technological park for trade and light manufacturing, and the academic area for educational organizations.