UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance

Archive for March 31, 2010

Offshore Companies in the Ras Al Khaimah Free Zone

Why RAK FTZ offshore?

  • Nice location.
  • Cost-effective.
  • Efficient corporate structure.
  • No physical presence requirements.
  • Virtual Office available.
  • No activity restrictions.
  • No paid up capital.
  • No reporting or audited accounting.
  • Optimization of tax situation.
  • Mitigation of death tax issues from the country of domicile (“Worldwide Estate” Exposure).
  • No corporate or personal income taxes.
  • No capital gains taxes.
  • Can use the offshore vehicle to hold property inside and outside of the UAE.
  • Asset Protection.
  • Can open a bank account inside and outside of the UAE.
  • Can conceal the identity of the owners.

 

Submit the Following Documents if the Applicant is an Individual:

  1. Application Form with fees.
  2. Passport copy.
  3. Bank Reference Letter of good standing.
  4. CV or resume.
  5. Two utility bills from anywhere in the world.

 

Submit the Following Documents if Applicant is a Company:

  1. Application Form with fees.
  2. Registration certificate of the parent company attested by the UAE embassy in the country of origin.
  3. Articles of Association of parent company attested by the UAE embassy.
  4. Letter of good standing from the licensing authority of the parent company stating that the parent company is in good standing and still in operation attested by the UAE embassy.
  5. Board resolution from the parent company to be attested by the UAE embassy.
  6. Power of Attorney giving the power to a representative to sign the documents to be attested by the UAE embassy.
  7. Appointed director’s passport copy.
  8. Director’s CV.
  9. Director’s bank reference letter (good standing) from any bank in the world stating that the manager of the company maintains an account in the bank.
  10. Director’s two utility bills from the place of residency.
  11. The parent company’s bank reference letter.

 

What are the major differences between onshore and offshore companies in the RAK FTZ?

Onshore:

  • Physical presence required in RAK.
  • Can do business in RAK FTZ and in the UAE through agents.
  • Annual accounts audit required.
  • Restricted to doing the business activities permitted to license.
  • Maximum number of shareholders equals five.
  • Can get visas for employees and their families.

 

Offshore:

  • No physical presence requirement.
  • Virtual Office possible.
  • Cannot conduct business within the RAK FTZ.
  • No audit requirement.
  • No activity restrictions.
  • No maximum limit on shareholders.
  • No residency visa possible for shareholders.
  • Can conceal the identity of the owners.

Company Formation in the Ras Al Khaimah Free Trade Zone (RAK FTZ)

 

I love Ras Al Khaimah.  Its sunny shores marked with local tradition and warm, refreshing, and welcoming air makes for a relaxing holiday away from the hustle and bustle of vibrant and hectic Dubai.  Ras Al Khaimah offers several company formation options including company vehicles within the city of Ras Al Khaimah, the Ras al Khaimah Free Zone, and the offshore jurisdiction of the Ras Al Khaimah Free Zone.

Within the Ras Al Khaimah Free Trade Zone, the following company vehicles are permitted: Foreign Branch, Local Branch, Free Zone Company, and the Free Zone Establishment.

In order to apply for company incorporation, the applicant must submit the application form along with the following documents.

Foreign Branch:

  1. Brief Project Description
  2. Copy of Passport (company owner/manager)
  3. Bank Statement and Recommendation (not older than three months)
  4. Registration Certificate
  5. Mother Company’s Board Decision to Set Up a Branch
  6. Power of Attorney Appointing A Representative
  7.  Good Standing Letter
  8. Mother Company’s Legal Documents

 

Local Branch:

  1. Brief Project Description
  2. Copy of Passport (company owner/manager)
  3. Bank Statement and Recommendation (not older than three months)
  4. Registration Certificate
  5. Mother Company’s Board Decision to Set Up a Branch
  6. Power of Attorney Appointing A Representative
  7.  Good Standing Letter
  8. Mother Company’s Legal Documents

 

Free Zone Company:

  1. Brief Project Description
  2. Copy of Passport (company owner/manager)
  3. Bank Statement (minimum account balance of AED 100,000.00)
  4. Resolution
  5. Power of Attorney Appointing A Representative
  6. Memorandum of Association and Articles of Association

 

Free Zone Establishment:

  1. Brief Project Description
  2. Copy of Passport (company owner/manager)
  3. Registration Certificate

 

Any company that wishes to operate in the Ras Al Khaimah Free Trade Zone (“RAK FTZ”) must register as a legal entity at the RAK FTZ, open a bank account, acquire a business license, and sign a lease contract for a RAK FTZ facility.  Once this process is completed, the company will be entitled to activate the bank account, apply for the approved number of visas/UAE residence permits and start operating in the RAK FTZ.  The number of visas that can be issued to a free zone entity is dependent on the type of facility, type of license and activity undertaken at the RAK FTZ.  The number of visas obtainable for a commercial and consulting license is approximately four depending on the facility and type of activity.  For industrial licenses, the number of visas obtainable depends on the project requirements.  RAK FTZ clients can apply for the following types of visas:

  1. Employment (Investor or Partner Position):  This employment visa is issued to a RAK FTZ Establishment owner or to a shareholder/partner in a RAK Free Zone Company where the value of shares held by the applicant is not less than AED 50,000.00 (Partner Visa).  This type of visa is valid for three years and the visa holder is not allowed to stay outside the UAE for more than six consecutive months.
  2. Employment Visa:  This employment visa is issued to managers or employees of companies established at the RAK FTZ.  This visa is valid for three years and the visa holder must not stay outside the UAE for more than six consecutive months.
  3. Family Visa: Clients already holding employment visas issued by the RAK FTZ may apply for the family visa to sponsor their dependents.  This visa is valid for three years.
  4. Visit Visa: This is a permit to enter the UAE for short visits.  This visa is valid for either 30 or 90 days.

I want to form an LLC in Ras Al Khaimah

 

An LLC in Ras Al Khaimah must have 2-5 Partners as well as 51% local ownership.  For LLC’s, submit the following to the Ras Al Khaimah Economic Department: http://www.rakecon.ae

  • Completed license application form.
  • Passport copies of all associates with residence visa details for expatriates, and family record copies for UAE nationals.
  • Passport copy of the manager in charge (if he or she is not one of the associates).
  • Proof of capital for limited liability companies from an exchange bureau or a bank or a budget from an accredited auditor. (Minimum: sufficient to carry out objects of  the company)
  • The trade name booking form.
  • Leasing contract if the license owner is leasing the shop, office or flat.
  • No objection letter for ex-patriate partners.

 

Terms and conditions for the trade name in Ras Al Khaimah
 
  • The trade name cannot be repeated.
  • The trade name should not imply any political interpretation.
  • The trade name should not conflict with the Islamic Sharia’h, the mores and traditions, and should not include any of the Lord’s names or) attributes (except double barrel names).
  • The trade name should be in compliance with the rules and regulations in use federally and locally.
  • The Trade name should not be misleading, it should reflect the reality.
  • The Trade name should preferably be an Arabic name and it should imply the activity.
  • The Department of Economic Development is responsible for the translation of the trade name to English literally.
  • The Department of Economic Development has the right to reject or change the trade name suggested within the application if it is not in compliance with the terms mentioned above or if it sees a necessity to that in case of the repetition of the Trade name, the first applicant who has registered the name first will be eligible to keep it.
  • The trade names may be booked for months, renewable, provided that the required fees are paid.
  • In case the trade name booked is changed, the Department of Economic Development will charge a fee of 150 AED. It is absolutely prohibited to write the trade name on the UAE flag or on any other country’s flag or on any symbol bearing any political or sacred religious meaning. Those who do not comply with these conditions will be subjected to prosecution (Special conditions for the technical assessment of the Business location).
 General terms and conditions for the exercise of trade activities
 
  • Compliance with the laws and policies of the United Arab Emirates.
  • Ensuring the safety and the security of society. It is mandatory for any profitable business to obtain a license.
  • Compliance with the laws and policies of any related official authority.
  • Compliance with the graceful Islamic Sharia’h regulations.
  • No practice of any type of games or activities that compromise general ethics.
  • Gambling of any type is completely prohibited.
  • Commitment to any future law that might be imposed by the relevant official government authorities.
  • Compliance with any law or condition to be issued later.

 

UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance