Starting an offshore company today can prove to be one of the best financial moves you can do for your business. The idea of forming an offshore company sounds nice, but there are many things that an investor should do before diving into the offshore world.
The first thing that one should do is choose a jurisdiction that complements the business activities of the investor. An offshore jurisdiction should have satisfactory benefits that will go along with the purpose of the business.
After doing the above, choosing the right business vehicle is just as important. An investor must decide what type of company to use for carrying out their operations. Such research should also be done before offshore company formation in RAK.
There are several types of companies that are available in Ras Al Khaimah. RAK International Corporate Centre (RAK ICC) is a corporate registry operating in RAK that is responsible for the registration of all of the international and offshore companies in RAK.
RAK ICC also lays down the types of offshore companies permissible to be formed in RAK. RAK ICC was established after the enactment of Emiri Decree No. 12 of 2015. RAK ICC is solely responsible for the permission granted to International business companies (IBC).
Advantages of RAK ICC companies
- Access to Common Law Courts
- Can own real properties and assets
- No restriction on ownership and repatriation of capital and profits
- Companies can own open bank accounts worldwide and in the UAE
- Can take advantage of almost 50 double tax agreements formed by UAE with different countries
Features of RAK ICC companies
- No minimum capital requirement
- Automated and fast registry services
- Laws are influenced by common law
- No requirement to maintain financial accounts
- Continuation of foreign companies is permitted
- Great privacy and confidentiality
- Easy renewal services
- Tax exemptions
Types of Companies
1. Company Limited by Shares (CLS)
In this type of company, the liability of shareholders is limited to the amount of capital contribution they have in the company or have agreed to commit as per the agreement. A CLS needs to have a minimum of one shareholder and director.
A CLS can issue bonus shares, partly paid shares, or zero paid shares. There are multiple possible uses of a CLS; they can be used for many purposes:
·International Business Company (IBC)
These types of companies are used for worldwide investments and global trade.
Business vehicles used to hold shares and other assets are known as holding companies. Holding companies have earned quite a reputation worldwide, making them one of the most sought-after business vehicles for offshore company incorporation. Learn more about why you should invest in a holding company on our blog.
·Special Purpose Vehicle
This company type is generally used to hold specific assets such as real estate. The asset can then be further sold as a whole or in different parts by selling the relevant shares to the RAK ICC Company; this would not attract the need to involve local notaries and land registry authorities.
·Joint Venture Company
A business vehicle is used for a short period to accomplish a mutual business goal. Rights of the shareholders in this company type are generally stated in the Memorandum and Articles or a separate shareholders agreement.
Generally, this type of company is used to operate on a specific project while minimizing risk exposure to shareholders.
It enjoys very limited disclosure obligations, is a completely private business vehicle.
2. Company Limited by Guarantee (CLG)
The main feature of a CLG is that there is an undertaking given by the members of the company who guarantee that they will contribute a specified argument to the CLG in case there is the liquidation of the company. The liability doesn’t exceed the amount mentioned in the agreement.
A CLG must have a minimum of one guarantee member. The liability of the guarantee can’t be transferred to another member of the company.
3. Unlimited Companies (UC)
This type of business vehicle can be incorporated with or without a share capital where the liability of the members is unlimited. Unlimited liability means that the members of the company are jointly obligated to meet any deficiency in the assets of the company to enable the settlement for liabilities taken on in the course of business to an unlimited extent.
How can we help?
Once you are done selecting a proper jurisdiction, contact us to determine what would be the best company type for the business activity you are aiming for.
We here at Business Setup Worldwide are committed to making your offshore company incorporation smooth and burden-free. We can help you with offshore company registration along with other offshore services.