RAKIC OFFSHORE COMPANY FORMATION

Ras Al Khaimah is one of the fastest growing emirates of UAE. Renowned for its natural beauty, RAK has also gained a reputation for being a transparent, tax-free, corruption-free and a no-red tape location to do business. It has a unique offshore location for being the outbound port for India, Russia, CIS Countries, Iran, Pakistan and Middle East.

RAK Offshore is the first offshore center in the Middle East to have its own registrat company. It offers business and individuals a wide range of comprehensive services and structures that are dedicated to non-residents. It also benefits from one of the most comprehensive lists of non-double taxation treaties in the world including with China, India, Italy, France and Germany.

In addition to setting up the International Company (Offshore Company) with different classes of shares, it is further possible to incorporate such a company with ‘Bearer Shareholding’ structure. Comparing to other offshore structures in the region, the unique feature of RAK Offshore is that it has set up an arbitral/judicial tribunal to resolve in case any dispute arise with respect to the operation of the Company. The shareholders of the company are free to opt any international law while submitting the disputes for settlement before the tribunal, provided the fact has been mentioned in the Memorandum of Association of the Company at the time of Incorporation.

Rakic Offshore Company

Activities Allowed

ü  Professional contact with legal consultants, lawyers, accountants and auditors.

ü  To hold shareholders and directors meetings in the UAE.

ü  To own real property in areas of the Zone designated by the authority.

ü  To hold an account in a bank in the UAE for the purpose of conducting its routine operational transactions.

ü  To engage in General Trading [Internationally].

To engage in commercial , industrial , agricultural and activities considering and observing international rules and regulations and statute law of country where the company operates its activity including international trading , investment and other related activities.

ü  To open branch offices or representative offices in any part of the world.

ü  To become a shareholder in a Limited Liability Company to be formed in Dubai/ UAE.

ü  To become a shareholder in an entity which may be formed either in UAE or UAE Free Zones

Restricted Activities

ü  To carry on business with persons in RAK Free Trade Zone;

ü  To carry on banking , insurance , re insurance , insurance agent or insurance broker

ü  To carry on any other business which may, by regulations made by the authority, be prohibited by the Authority.

 

RAK Offshore company Advantages/Benefits

 

ü  A strategic location at the crossroads of East and West with access to a market of over 2 billion people from Morocco to China, and from Russia to Africa.

ü  A modern telecommunication and transportation infrastructure with well-developed road, air and sea transport facilities.

ü  No restrictions on hiring manpower and easy access on a large pool on well-qualified and trained professionals.

ü  Part of the United Arab Emirates, one of the most financially and politically stable in the region and worldwide.

ü  A local government that is fast and efficient with minimum regulation and red tape and a strong commitment to encouraging business and investment.

ü  A tax-free environment with numerous bilateral non-double-taxation treaties with different countries including India and European countries.

ü  A well-developed financial regulatory framework that include strcit compliance for international anti-money laundering act.

ü  A local currency linked to US Dollar to ensure a stable exchange rate with no currency fluctuation.

Yours faithfully

Winston Wambua

Different types of offshore jurisdictions

In today’s blog we will look at the basics of the finance offshore industry. What are the different types of offshore jurisdictions? Do they have specific classifications?

There are many ways to classify various offshore countries. It can either be by its geographical position, their requirements, confidentiality, etc. However, the main type of classification is based on the key reason why businesses around the world often choose to locate offshore: low tax rates.

So, what are the main types of offshore jurisdictions based on the taxation indusrty?

1. Countries with zero taxes (classic offshore)

This is usually a small state with a relatively low level of economic development, but good political stability. There are no income taxes. Submission of financial statements and auditing is not required. The only requirement is to pay a fixed annual fee to the treasury. The register of shareholders and directors is not publicly accessible and the privacy of ownership is high.

Examples: UAE, British Virgin Islands, Seychelles, the island of Nevis.

2. Countries with low taxes

In order to stimulate the economy and attract foreign capital, these countries have low tax rates for all companies. Such jurisdictions are not considered offshore. All registered companies rent offices here and pay taxes.

Examples: Ireland, Cyprus.

3. Countries with territorial tax system

In these countries, the level of taxation depends on the place of origin of company’s income. Income from sources outside the country are not taxed or taxed at a reduced rate. To prove that the company is entitled to such benefits, your company must file the financial statements and conduct auditing on an annual basis.

Examples: Hong Kong.

4. High tax country with special privileges

In such countries a global system of taxation is in place, i.e., taxation does not depend on the location of the source of income. Financial reporting is mandatory. Tax rates are quite high. However, in these countries there are legal forms of business, which are fully exempt from corporate taxes. For example, the types of LLC and LLP.

Yours

Winston Wambua K

RAKIA Offshore Company General Information

Ras Al Khaimah Offshore (RAKIA) has earned its reputation as a pre-eminent commercial centre with an innovative, dynamic and entrepreneurial business culture. Strategically located at the crossroads of trade and commerce between East and West, it is ideally positioned to service and access markets that span the Middle East, Africa, the Indian subcontinent and the CIS countries. Moreover, it occupies a time zone that allows it to connect markets like the Far East and the US. To leverage this advantage, it is developing a world class infrastructure, air and port facilities, making it the most well connected hub in the region.

Politically stable, Ras Al Khaimah has a forward-looking, responsive government with a progressive, pro-business attitude and a strong commitment to the private sector. Business-friendly regulations and a favorable tax and customs framework have played a key role in attracting business investment from all over the world in almost every sphere of economic activity. Strong economic indicators and a relatively low cost work environment have contributed to its rapid development and prosperity. A modern, safe, multi-cultural place with state-of-the-art medical, education, entertainment, shopping and sports facilities that ensure a high quality of life, Ras Al Khaimah is the location of choice for the modern professional and an ideal location for multinationals to establish a regional presence.

RAKIA Offshore established by the Ras Al Khaimah Investment Authority (RAKIA) may not seem the obvious choice of jurisdiction, but a closer examination of the benefits that RAKIA and the UAE have to offer makes this venue an attractive option

ü  No Corporate Tax.

ü  No Income Tax.

ü  100% ownership. 

ü  No foreign exchange controls, trade barriers or quotas.

ü  No restrictions on capital repatriation. 

ü  Easy access to key decision makers. 

ü  Easy procedures for transfer of shares.

ü  RAKIA Offshore is not on the OECD “blacklist” of tax havens (nor the FATF blacklist). 

ü  Double Taxation Treaties: Double taxation agreements prevent individuals and corporations from being susceptible to paying tax on the same item during the same time period. These agreements determine which of the two states concerned should levy tax in a particular situation.

ü  RAKIA Offshore Companies can own/lease real estate properties in the UAE approved by RAKIA as well as anywhere outside the UAE.

ü  RAKIA Offshore Companies can hold an account in a bank within and/or outside the UAE for the purpose of conducting routine operational transactions.

ü  Legalization of documents is less costly and less cumbersome than other jurisdictions.

ü  RAKIA Offshore Companies may own yachts registered in the UAE.

ü  A person resident in the UAE may hold shares in a RAKIA Offshore Company. 

 There are a number of business activities which are suited to be operated through an offshore company, these include:

ü  Trading Company. 

ü  Property Owning Company.

ü  International services companies.

ü  Holding company.

ü  Professional Service Company.

ü  Shipping and ship management companies.

ü  Commission agents.

Shareholders

A minimum of one shareholder is required and there is no limitation on the maximum. Corporate shareholders are permitted. Shareholders meetings should be held periodically (at least once in a year). Every RAK Offshore Company shall maintain minutes of all proceedings at general meetings.

Share Capital

 There is no minimum capital amount required. Shares Certificates must be issued within two months from the date of payment of the capital.  Classes of Shares are permitted. Bearer shares are not allowed. Shares may be issued fully, partly or nil paid.    

Currency

 AE Dirham and US Dollar can be used as the denomination for the capital. Any foreign currency is acceptable but prior consent has to be approved by the RAK Investment Authority.

Director

A minimum of one director is required and corporate directors are permitted. The number of directors can be fixed in the Memorandum and Articles of Association. Details of directors are not available for public inspection.  The first directors are appointed by the incorporators at the time of incorporation, and thereafter elected by the shareholders. Any shareholder may be appointed as a director and/or a secretary.

Each director holds office for a period determined by the shareholders. In the event of death or resignation another director may be appointed by the resolution of the shareholders. A vacancy created by removal of a director may be filled by resolution or in absence of such resolution by the remaining directors.

The directors have all the powers of the company that are not reserved to the members under the Regulation or in the memorandum and articles.

Secretary

Every RAKIA Offshore Company is required to have a secretary, which is appointed by the shareholders for such period as the shareholders may determine.  A shareholder may be appointed as a secretary and/or a director. Corporate Secretaries are permitted.   

Annual Account and Audits

 Accounts are not required to be filed with the Authority. Audited Accounts are not required, but they may be audited by persons approved by the directors. A company incorporated under the Regulation shall keep such accounts and records as the directors consider necessary or desirable in order to reflect the financial position of the company.

Company Register

All RAKIA Offshore Companies are required to maintain the following registers:

(1) Register of Shareholders; 

(2) Register of Directors and Secretary;

(3) Register of Meetings (shareholders, directors, committees); . 

These are not available for public inspection, other than by members or directors. If copies of these registers and documents are kept other than by the registered agent, the registered agent must be notified of the location of the original.

Inspection,

Inspection by the Authority is permitted in cases of suspected fraud. 

 24 hours from the time

All the required documents are submitted to the RAK Offshore Registrar.

Restrictions on Name

 Generally the nature of the company has to be indicated through the words 'Limited', 'Corporation', 'Incorporated', 'Unlimited' or the abbreviation 'Ltd', ' or No names are permissible if the name resembles to any other offshore company already registered or the name appears to be misleading with the names of any governmental organizations existing in UAE. Words resembling financial activities such as 'Assurance', 'Bank', 'Building Society', 'Royal', 'Trust Company', 'Trustee Company' etc. will require justification.

Activities/Restrictions on Activity

RAKIA Offshore Companies may engage in any lawful activity for which RAK Offshore Companies may be organized under to the RAKIA Offshore Companies Regulation.

RAKIA Offshore Companies are prohibited from carrying on business with person(s) resident in the UAE. However, a RAKIA Offshore Company shall not be treated as carrying on business with person(s) residing in the UAE by reason only that it:

(a) makes or maintains professional contacts with legal consultants, accountants and management companies;

(b)  prepares and maintains books and records;

(c) holds its General Meetings or meetings for its directors;

(d)  leases office space for its use as a registered office; or

(e)  holds a bank account for the purpose of conducting its routing transactions.

In the event that a RAKIA Offshore Company desires to carry out business either within Ras Al Khaimah or elsewhere in the UAE, the proper license should be obtained from the competent authority.

Information published relating to shares and shareholders, Directors

 Details of the company beneficial owners, directors and shareholders are NOT part of public record. The Registrar of Companies does not require any data whatsoever on who is the actual beneficial owner of the new company. This information is only known to the licensed Registered Agent of the company and is kept in complete confidentiality. The internal corporate files of the IBC, like the Register of Members, Register of Directors and all Minutes and Resolutions, are kept at the offices of the Registered Agent and are also confidential.

RAKIA is not a dependent or 'overseas' territory of another country and as such it is not sharing or reporting information to any overseas 'principal' or organization. Ras Al Khaimah is not subject to the EU Savings Tax Directive, unlike some other offshore tax havens related to the EU member states. 

Is there a register of company charges?

 A company may maintain at its registered office a register charges and other encumbrances. This is not mandatory. Similarly, a public register may be maintained at the option of the company.

Dissolution of a RAKIA Offshore Company:

A company may be dissolved /deregistered prior to the renewal date. The following documents are required from the applicant in order to deregister a RAKIA Offshore Company:

Original Memorandum and Articles of Association and Incorporation Certificate must be surrendered to the Registrar;

1. Resolution of the Shareholder(s) calling for the deregistration of the RAK Offshore Company (a sample can be provided if required);

2. Liquidation Report from auditors stating that there has been no transaction on behalf of the RAKIA Offshore Company for the past year. Client shall be responsible for securing Auditor’s Report; however, Winston Wambua, ONEWORLD Mid East Ltd can provide this service;

3. Plan of Dissolution;

4. Articles of Dissolution;

5. Original of Newspaper Publication made by the company after approving the Plan of Dissolution by the Registrar;

6. Original of Paper Publication made by the Liquidator after receiving the Certificate of Dissolution from the Registrar.

Re-domiciliation provisions

A company incorporated under the laws of a foreign jurisdiction may continue its existence as a company registered under the Act. Similarly, RAK Offshore business companies may transfer their domicile to foreign territories that permit such procedures.

Registered Agent

The RAKIA Offshore Company is required to appoint an approved registered agent from the list of approved RAKIA Offshore Registered Agent List (Winston Wambua, ONEWORLD Mid East Ltd is an approved RAKIA Offshore Registered Agent)

 

Winston Wambua