The emirate of Ras Al Khaimah (RAK) has now allowed 100% foreign ownership to companies in the mainland in order to attract more foreign direct investment (FDI) into the emirate.
The RAK Economic Zone (RAKEZ), the free zone, home to 15,000 companies, announced the new company formation structure under the emirate's programME to attract more foreign investment key strategic sectors such as industrial, agricultural and services.
Companies set up under this FDI structure will be considered UAE national and will have full confidentiality of technical, economic, and investment information. FDI companies will also be eligible to make financial transfers outside the UAE for project returns, and will have their assets protected from being claimed by the UAE state for public use or benefit through a guaranteed no expropriation.
Under the new programME, investors are also allowed to add partners (or shareholders) and transfer ownership to new investors.
RAK's Department of Economic Development (RAK DED) will receive and approve applications, ensuring that they fall under the positive list of eligible sectors issued by the UAE Cabinet under the UAE Foreign Investment Law, where 100% foreign company ownership is permitted. RAK DED will then reserve the trade name and issue the foreign ownership license, according to the mechanism set by the UAE Cabinet. After which, RAKEZ will issue a commercial license to the new company.
The new measures have indeed liberalised the foreign investment regime in the UAE to much extent by allowing 100% foreign ownership for most business activities in mainland Ras Al Khaimah, which is already home to a diverse range of businesses. The new measures will further increase Ras Al Khaimah's appeal as a regional investment hub. This new programme coupled with progressive policies towards economic liberalisation has the potential of diversifying the emirate’s economy and paving the way for the private sector (including foreign investors) to play a bigger role in the development of UAE’s economy (Ras Al Khaimah, in particular) and reap the benefits out of it.
Authored by Associate, Musab Iftikhar