Dubai: The government of Ras Al Khaimah has launched an offshore facility, the second in the UAE, that is expected to lure investors looking for a new tax haven.
The initiative, called "International Companies Registry", will allow foreign investors to register offshore companies in the Ras Al Khaimah Free Trade Zone (RAK FTZ) without the need to establish a physical presence, the zone's chairman Shaikh Faisal Bin Saqr Al Qasimi said yesterday.
Ras Al Khaimah officials hope foreign companies will find their offshore system more appealing than the Jebel Ali Offshore centre, which was established by Dubai in 2003 to position itself as a tax haven like the Cayman Islands, Bahamas and Liechtenstein.
RAK FTZ chief executive officer Osama Al Omari said "thousands of companies" have expressed interest in joining the offshore zone.
"We are expecting to register 5,000 companies within three years," Al Omari told Gulf News.
M.A. Rafik, a managing partner with Dubai-based accounting and business consultancy firm Pannell Kerr Forster, said although Ras Al Khaimah is offering an attractive package of benefits, "companies will not rush to register".
"Foreign companies would take time first to study what the regulations are," he told Gulf News.
Al Omari said the International Companies Registry has been set up by "extracting the best international rules and regulations to cater to the region."
Asked what steps the zone would take to ensure that it is not misused for money laundering, he said: "We are appointing three top international law firms to make sure that all these companies that are registering in this programme follow international law and anti-money laundering requirements."
The offshore benefits being offered by Ras Al Khaimah allow a company to operate with a single director. Offshore entities are not required to have their accounts audited.
According to Raju Menon, managing partner with Morison Menon Chartered Accountants, Ras Al Khaimah provides some distinct advantages like the provision of "bearer shares" under which an entity may decide not to disclose the owner's identity.
In such cases, the shareholder's identity is known only to the appointed agent. However, the government may ask the shareholder's identity if required in cases such as bad transactions.
Ras Al Khaimah also allows operating companies leeway in deciding the rules governing inheritance.
"A company can decide which country's laws it wants applied for inheritance," Menon said.
New free trade zone under development
Ras Al Khaimah is developing a new free trade zone covering an area of 27 square kilometres, an official said.
"The new zone will cater mainly to heavy industries that require large space," Osama Al Omari, Ras Al Khaimah Free Trade Zone (RAK FTZ) chief executive officer, told Gulf News.
He said the emirate has adopted a "multi-location" strategy in developing special economic areas covering different sectors.
RAK FTZ has so far attracted 2,147 companies, a large number of them from India and Iran.
Fifteen per cent of the companies are in the industrial sector. The rest are involved in trading and services.
The six-year-old trade zone is registering between 100 and 150 companies per month, Al Omari said.
In cooperation with Iranian businessmen, the emirate is also developing cross-border business hubs.
He said with the emirate planning to have its own airline, tourism will also grow.
There are 25 hotels under construction in the emirate, he said.
