RAK Offshore Company: All You Need to Know
For anyone looking to expand and benefit from the favorable tax environment of the United Arab Emirates (UAE), offshore company formation is an ideal option. Among the top three offshore locations in the UAE (RAK, Ajman, and Jebel Ali Free Zone), Ras Al Khaimah (RAK) has earned the strongest reputation as an offshore hub.
To begin with, RAK was earlier divided into two authorities: Ras Al Khaimah Investment Authority and Ras Al Khaimah Free Trade Zones (RAK FTZ). Among the two, the RAK offshore company was a part of the Ras Al Khaimah Investment Authority.
To streamline operations and meet international compliance requirements, the government merged the two through Decree No. 12 of 2015, which led to the creation of RAK International Corporate Center (RAK ICC).
Henceforth, the RAK offshore company emerged as a go-to structure for people who want to expand their businesses and enjoy numerous benefits.
What is an RAK offshore company?
RAK offshore company is a legal structure, commonly referred to as an international business company (IBC), that enables global trade and asset protection. According to the RAK ICC Business Companies Regulations (2018), an RAK offshore company is any firm incorporated under Regulations 7 and 188. Moreover, it can also be a company re-registered with RAK ICC under the Transitional Provisions.
An RAK international company has limited liability and can be structured as one of the following:
- Company limited by shares.
- Company limited by guarantee that is not authorized to issue shares
- Company limited by guarantee that is authorized to issue shares
- Unlimited company that is authorized to issue shares
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RAK Offshore Company’s Specialized Corporate Structures
Aside from those mentioned above, an RAK company can be structured as one of the following to meet a certain goal or a business requirement:
- Special Purpose Vehicles (SPVs): Useful for specific, one-time projects or high-value transactions (like a joint venture or holding high-value individual assets such as aircraft, ships, etc.) to isolate risk.
- Segregated Portfolio Company (SPC): Create silos within one company to separate different assets and liabilities so they don't affect each other.
- Foundation Subsidiary: Many wealthy families use RAK foundation to set up an offshore company, creating an elite level of privacy and succession control.
Features of an RAK Offshore Company
There are numerous defining characteristics of an RAK ICC offshore company that make it a sought-after business expansion destination, especially among non-residents:
100% Foreign Ownership
RAK ICC does not prohibit foreign residency. Anyone can invest in and set up an RAK company without any hassle, regardless of residency or nationality. However, they have to comply with strict KYC and due diligence requirements.
International trade
An RAK ICC company can trade efficiently across the globe as there are no restrictions on international trade. However, it cannot enter into any trading agreement with a free zone or a mainland entity. Nonetheless, it can have a UAE bank account to support cross-border transactions.
Ability to Hold Properties
RAK ICC has an official Memorandum of Understanding (MoU) with the Dubai Land Department (DLD) that enables the acquisition of local properties. Thus, a Ras Al Khaimah incorporation can own and hold properties in the designated freehold areas in the UAE, making it an efficient tool for inheritance planning.
Can Issue Shares
Under RAK ICC, companies can issue multiple classes of shares. As per Section 48 of Business Regulations, ‘RAK businesses can issue voting shares, non-voting shares, or shares with preferential rights, allowing owners to customize the control of the company’.
Restrictions on the Issue of Bearer Shares
An RAK entity cannot issue bearer shares or convert registered shares to bearer shares. This is in line with the recommendations issued by the Financial Action Task Force (FATF).
Limited Liability
Companies in RAK offshore have limited liability unless they are structured as unlimited companies. Members of companies limited by shares or guarantee have limited liability and are only liable up to the amount unpaid by them as mentioned in the Memorandum of Association.
Allowed to Issue Partly Paid Up Shares
An RAK entity can also issue partly paid-up shares to the shareholders and call for more investment as and when required. This gives a firm, stable and consistent way to meet its capital requirements.
Uses of an RAK International Company
An RAK offshore company can be structured to accomplish any of the following:
International Trade and Services
International trading is a foremost advantage of RAK offshore company formation. It facilitates international trade without hassle. Aside from this, it can also serve as an offshore reinvoicing center to mitigate currency fluctuations in global markets. It can also be structured to provide shipping and logistics services to global clients.
Intellectual Property (IP) Holding and Licensing
Since a company registered in RAK can hold global assets, it can be structured as an IP holding company to register and hold trademarks, patents, copyrights, or software licenses. Moreover, it can also collect royalty payments from the IP licenses.
Real Estate Holding Company
As per the MoU signed with Dubai Land Department (DLD) and Abu Dhabi authorities, an RAK-registered firm can hold properties in the UAE’s designated freehold areas. A real estate holding company can be structured to enhance inheritance planning and to avoid the complexities of local Sharia-based probate courts for properties in the UAE. Aside from this, it can also be structured to hold real estate internationally in Europe or the USA to simplify multi-jurisdictional management.
What an RAK Offshore Company Cannot Do?
An RAK international company cannot:
- Trade with free zone or mainland entities
- Provide financial services
- Do business that RAK ICC regulations prohibit
Latest RAK Offshore Regulatory Updates
The regulatory requirements the firm must meet are constantly updated by the authorities. Here are the latest mandatory updates that a firm must comply with.
Corporate Tax
Since an RAK company is a UAE tax resident, it has to register for corporate tax with the Federal Tax Authority (FTA) and obtain a tax identification number in the UAE. This has to be done regardless of where the profit is made.
Free zone entities can enjoy a 0% tax rate as Qualifying Free Zone Persons (QFZPs), but standard offshore companies rarely meet the strict local substance and audit requirements. If disqualified from QFZP status, the company is taxed under the standard regime at 9% on profits exceeding AED 375,000. However, for actual QFZPs, any permitted Non-Qualifying mainland income is taxed at 9% from AED 1. Regardless of a 100% tax exemption, the firm is legally required to file a Nil Tax return annually.
Economic Substance Requirements (ESR)
For financial years ending after December 31, 2022, regular ESR notifications and reports are no longer required for most RAK ICC entities. While the filing requirement has been removed, the principle of substance remains. If the firm is claiming a 0% corporate tax, the FTA might ask for evidence that the company has local management and control in the UAE.
UBO and AML Transparency
An RAK offshore firm must maintain an internal Register of Ultimate Beneficial Owners (UBO). The firm must meet the 25% rule and identify individuals who hold a 25% or more stake in the company. This internal register is then uploaded to the RAK ICC registry, which is linked to the UAE’s ‘National Economic Register’, meaning the government has real-time visibility into who owns offshore firms.
Moreover, new federal laws (Decree-Law No. 10 of 2025) have increased the penalties for companies that fail to conduct proper Anti-Money Laundering (AML) checks on their own transactions.
Documents Required to Set Up an RAK Offshore Company
The document requirements can vary based on the type of shareholders. Here’s a concise list of documents that you must obtain:
For RAK Business Entity (Offshore)
- Memorandum of Association and Articles of Association (must be signed by all shareholders)
- Agent appointment letter
For UBOs or individuals
- Certified copy of passport
- Certified copy of current utility bill
For corporate shareholders
- Certified copy of the certificate of incorporation
- Certified copy of MoA and AoA
- Current certificate of incumbency
- Current certificate of good standing
- Names of shareholders and the ultimate beneficial owner
For Trusts as Shareholders
- Trust deed
- Certified register extract for the trust
- Certified copies of passports of the settlor, protector, and beneficiaries
For Foundations as Shareholders
- Foundation regulations and charter
- Foundation minutes approving the incorporation of the RAK ICC company
- Current certificate of good standing
Process to Set up a Business in RAK
Offshore company formation in the UAE is easier. All you have to do is follow the steps below and meet all the requirements.
Step 1: Appoint a Registered Agent
Appointing a registered agent is essential when looking to set up an RAK ICC company. A registered agent takes care of all the formalities and acts as a point of contact between the firm and the authorities.
Step 2: Submit Completed Form and Documents
Submit the above-mentioned documents along with the completed form to the registered agent.
Step 3: Obtain Certificate of Incorporation
Once the incorporation is successfully completed, obtain the certificate of incorporation from the authorities.
Post-registration Compliance Requirements
An RAK offshore company must meet the following post-registration requirements:
Requirement | Action Needed |
Corporate Tax | Register for TRN and file annual returns. |
ESR Filing | Keep internal records only (for post-2022 year). |
UBO Register | Update within 15 days of any change in ownership. |
Annual Audit | Not required by RAK ICC, but recommended for Tax. |
Registered Agent | Must use a licensed RAK ICC agent for all filings. |
Why Choose Business Setup Worldwide (BSW)?
An RAK offshore company is the right choice for international trade and to enjoy the UAE’s favorable tax environment. However, meeting the legal requirements is essential for successful company incorporation. That’s where experts at BSW can help. With over 8 years of experience, we have in-depth knowledge of the legal requirements and the changing laws. We guide you through every formality and ensure you remain at the top of your game. Contact us now to begin!
Aaron Richards is a seasoned expert with over six years of experience who specializes in offshore company formation, trust and foundation setup, and corporate services. Through his blogs, Aaron shares valuable insights to guide clients in making informed decisions about their global business needs.
Frequently Asked Questions
Yes, RAK offshore companies are sometimes used to hold ownership of yachts and other movable assets.
Yes, the company can usually appoint a new registered agent, subject to approval by the authority and compliance checks.
Yes, both individuals and corporate entities can act as shareholders.
Yes, some investors use offshore structures to manage international joint venture arrangements.
Yes, Ras Al Khaimah offshore company documents can generally be notarized and apostilled for use in foreign jurisdictions.
