The United Arab Emirates (UAE) consists of seven independent federal Emirates where Ras Al Khaimah (RAK) is one of them. Recently the RAK enacted a law allowing for the formation of foreign owned International Business Companies (IBC) called the “Rasal Khaimah International Corporate Centre Business Companies Regulations of 2016”.
A RAK IBC is a purely nonresident company which is fast becoming a popular option to foreigners seeking to create an offshore company in the UAE. Some of the main reasons are to create an asset protection platform in the Middle East in order to conduct business in a tax free environment.
The Emirates of the RAK offers foreign companies a stable political and financial environment ranked by Moody’s with a credit rating of Aa3. It also offers a virtual free crime location conveniently linking the West with the East.
Background
The United Arab Emirates (UAE) is often referred to as the “Emirates”. It is located on the Persian Gulf in the Arabian Peninsula. Its estimated population is 9.5 million with only around 1.5 million citizens and nearly 8 million expatriates from all over the world. The UAE consists of a seven emirates federation created in 1971. Its political system is a Federal Monarchy with a Federal National Council as its legislature.
Benefits
A UAE RAK Offshore International Company (IBC) enjoys several benefits including:
• No or Low Taxes: There are no corporate taxes, no capital gains tax, no income tax, no withholding tax, and no export or import taxes. However, U.S. taxpayers and everyone residing in a country which taxes global income must report all income to their tax authority. In January 1, 2018 UAE added a small value added tax (VAT).
• Limited Liability: The liability of a shareholder is limited any amount unpaid on a share held by the shareholder.
• Privacy: The names of the shareholders are not part of any public records.
• One Shareholder: Only a minimum of one shareholder is required.
• One Director: Only a minimum of one director is required.
• Numerous Business Activities: professional services, general trading, advisory and consulting services, investments, online business, and acting as a holding company for global assets.
• English: While not being the official language, all documents can be prepared in English which is a widely spoken language in the UAE.
Company Name
The IBC is required to select a company name not similar to another UAE legal entity name. The company name must end with either “Limited” or “Incorporated” or the abbreviation “Ltd” or “Inc”.
Company Registration
A Memorandum is filed with the government Registrar which includes the share capital, share value, power of Directors and object of the company notarized by a UAE Court
Registered Agent and Office
The IBC will be required to appoint a local registered agent and to maintain a local registered office address.
Shareholders
Only a minimum of one shareholder is required. Shareholders can be corporations.
The following types of shares can be issued: redeemable, preferential rights, and with or without voting rights. Bearer shares are not permitted.
Limited Liability
The liability of a shareholder is limited any amount unpaid on a share held by the shareholder.
Directors and Officers
Only a minimum of one director is required.
A company secretary is required who must be a local resident and can be a natural person or a corporation.
Minimum Share Capital
The minimum authorized share capital is 1,000 Dhs (currently, the Dirham is 3.67 per $1 USD).
Accounting
Standard corporate accounting practices are required. There are no requirements for audits. Accounting records or financial statements are not required to be filed with the government. The public does not have access to accounting and financial records.
Taxes
There are no corporate taxes, no capital gains tax, no income tax, no withholding tax, and no export or import taxes. However, U.S. taxpayers and everyone residing in a country which taxes global income must report all income to their tax authority. There is a small value added tax (VAT) on most goods.
The only companies which are taxed are: foreign banks with branches in the UAE, and oil, gas, and petrochemical companies.
There are no requirements for filing annual tax returns.
Annual General Meetings
There are no requirements to hold annual general meetings or any other types.
Time for Registration
It is estimated that the registration will be completed between one to two weeks.
Shelf Companies
There are no shelf companies available for purchase.
Conclusion
A UAE RAK Offshore International Company (IBC) enjoys several benefits including: no taxes, limited liability, privacy, only one shareholder and one director required, can conduct numerous business activities, and English is widely accepted.
