Dubai Offshore as opposed to RAK Offshore
October 21, 2016
The United Arab Emirates have become extremely attractive for doing business nowadays. There are several Free Economic Zones in the UAE. They offer multiple benefits to individuals and corporations looking for privacy and tax-free opportunities.
Ras Al Khaimah (RAK Offshore), subordinate to RAKIA – Ras Al Khaimah Investment Authority and Dubai subject to the general jurisdiction of JAFZA – Jebel Ali Free Zone Authority are the two offshore jurisdictions in the UAE.
The seven Emirates offer thirty-eight free economic zones; twenty-two of them are in Dubai. A separate Free Trade Zone Authority manages every zone servicing various business sectors and activities.
JAFZA is one of the free zones, which appeared first in the UAE in 1985. It developed around the Jebel Ali Port, not far from Dubai. The initial aim of such a zone was to stimulate trade, economic growth, and direct investments from abroad. JAFZA provided foreign investors with the opportunity to avoid the red tape, a characteristic feature of international trade and fiscal services. It attracted entrepreneurs from other countries to do business in Dubai.
Later in 2003 Dubai offshore entities were enacted under JAFZA. It created secure business conditions for the investors from abroad, providing the latter with confidentiality and freedom to conduct international commercial operations. Since that time JAFZA played the leading role in Dubai’s growth as a business center. The expansive free trade area attracted lots of business activities from all over the world.
RAK Offshore, established as a free economic zone only in 2006 is governed by RAKIA. For 10 years already this financial center has been the main destination for foreign investors, both individuals and companies. This area offers easy incorporation procedures, flexibility and low costs.
Just in the first year after getting the status of a free zone, the jurisdiction attracted about 2000 IBCs – International Business Companies. They mostly provided such financial services as protection of the assets and real estate holding. In a bit less than 10 years Ras Al Khaimah has gained a foothold on the market of the offshore company creation not only in Dubai but in the whole United Arab Emirates. The jurisdiction offers the foreign investors attractive business opportunities along with flexible regulations.
Both UAE jurisdictions mentioned above offer similar services to the entrepreneurs and offer them the following advantages:
- Reduced tax rates
- Little reporting requirements
- Minimum requirements as to the capital
- No public register
- Strict confidential policies
Still, there are a few important differences between these two zones. To register a company in Dubai, the director must be present and sign the legal entity formation documents in person. RAK has more relaxed regulations and requires fewer fees. The director can set up a company in RAK remotely, alone (not in two) and be a corporate entity.
As it was already mentioned, RAK has conquered the offshore company formation market. Even the queries as to company incorporation in Dubai frequently lead one to RAK registration services. It’s just one more proof of RAK IBCs dominance within the offshore economic zone in the Middle East.
Nowadays only a few companies offer JAFZA offshore services. RAK is more openly preferred, being already the premier offshore destination in the UAE. Many companies also offer high-class RAK offshore services disguised as Dubai offshore services, notwithstanding the fact that Dubai and RAK are completely different jurisdictions.
Though some confusion is possible as to the two jurisdictions mentioned, RAK is definitely the dominion for international offshore services in Dubai as well as in the whole UAE. Ras Al Khaimah is rapidly gaining the leading position in the offshore companies’ formation market.
Contact us to get more details about the benefits of creation a RAK International Business Company in the United Arab Emirates.