In December 2018, the British Virgin Island government passed the Economic Substance Act, 2018 which came into force on the 1st of January 2019. The new legislation imposes increased substance requirements for certain BVI legal entities, such as having adequate number of qualified employees in BVI, expenditure incurred in BVI, physical offices and premises on the territory of BVI, etc. Should the company fail to meet the legislative requirements for substance, penalties as high as USD 400,000 may arise. Other countries like Bermuda, Cayman Islands, Guernsey, Jersey, Isle of Man, Mauritius, the Bahamas and Seychelles have also passed corresponding laws. A new legislation is being prepared for Belize which will also come into force anytime soon.
Owners of companies or structures in any of the above jurisdictions are advised to analyze the applicability of the laws to such companies, and think about possible strategies (in particular, liquidation, restructuring, strengthening of presence in the relevant jurisdiction, transfer to another jurisdiction, etc.).
One existing and tried solution that will help companies maintain their business and bank accounts is re-domiciliation (change of jurisdiction) and/or the establishment of physical presence of the company in a more business-friendly jurisdiction. Ras Al Khaimah, UAE is one of the best possible solutions for the time being, enabling you to save your businesses and reallocate to Emirates with possibility to establish physical presence there.
Why Ras Al Khaimah (RAK)?
UAE strategic location is a bridge between Asia, Middle East, Europe and Africa. UAE is defined by political and economic stability. Having a low-crime profile, it also enjoys financial and monetary stability with a sophisticated banking system and ample liquidity. The government of UAE has a consistent long commitment to liberal economic policies, built on a basis of leading-edge technologies and sound regulatory systems, with no exchange controls, quotas or trade barriers, corporate profit or personal income taxes. Businesses resident or operating in the UAE can benefit from the 115 (as of 2018) Double Taxation Agreements which the UAE concluded with most of its trade partners for the purpose of promoting its development goals.
Ras Al Khaimah (RAK) is one of the leading business destinations in UAE. The emirate’s political security and stability are backed by renowned credit rating agencies such as Fitch Ratings and S&P, with a markets well supported by major logistical hubs including: RAK International Airport; multi-lane superhighways that link to neighbouring emirates; and five seaports led by Saqr Port, the largest bulk port in the Middle East. RAK is the most industrialised emirate in the UAE, providing a wide range of facilities, such as offices, warehouses and land for development. Six of the seven Emirates, including Dubai, are within 60 minutes drive from RAK Airport. Residents get access to high-quality yet affordable housing, shopping malls, premier educational institutions and advanced medical facilities.
About RAK ICC
RAK International Corporate Centre (RAK ICC) is a Corporate Registry operating in Ras Al Khaimah, United Arab Emirates and responsible for the incorporation of International Business Companies (IBC), as well as providing a full suite of registry services related to IBCs, including Transfer of domiciliation or Continuation. It is a world class company registry operating with robust compliance policies and having state of the art legislation with common law influence and access to Common Law Courts
RAKICC COMPANY – ADVANTAGES:
- Conducting business as an international entity;
- Worldwide Investments & Global trade;
- Wealth Management & Estate planning;
- Own assets and real properties;
- Protecting investments in other foreign countries;
- Simpler transfer of assets and properties held in several countries;
- Open bank accounts locally and internationally;
- No UAE restriction on ownership and repatriation of capital and profits;
- Conducting business without corporate/personal taxes and ability to benefit from UAE double taxation treaties by establishing a subsidiary;
- No requirement to file financial accounts;
- Continuation / re-domiciliation of foreign companies is permitted;
RAKICC COMPANY – POSSIBLE USES:
International Business Company – to facilitate worldwide investments and global trade;
Holding company - Flexible corporate vehicle to hold shares in subsidiary companies;
Special purpose vehicle – Company to hold and transfer specific assets such as real estate without needing to involve local notaries or land registries;
Joint venture Company ;
Project Company - Vehicle to own and operate specific project while reducing the exposure of shareholders to liability;
Family office – Private vehicle with limited disclosure obligations;
Incorporated tenant association for real estate development;
Unlimited Company - International Tax Planning vehicle;
Segregated portfolio Company - Use of segregated portfolios for different assets can insulate each asset from liability and permit the separation of ownership from management and control;
RAKEZ It is the preferred business destination of more than 13,000 multinational companies from over 100 countries representing over 50 sectors, offering a cost-effective and world-class economic zone with customisable packages and facilities. RAKEZ offers you a wide variety of business licences covering an array of activities and the choice of setting up a free zone or non-free zone entity, depending on your requirements.
RAKEZ COMPANY – ADVANTAGES
100 percent foreign ownership;
Zero income and corporate taxation and Double Tax Treaty benefits;
Fast and efficient business set-up processes;
Wide-ranging business and industrial facilities and value-added services;
Provision to rent or build on-site staff and labour accommodation;
Company of substance;
Tax residence certificates for companies and individuals;
Eligibility for investors and employees to apply for UAE Residence Visas;
Small to medium-sized ready or customisable office spaces ideal for commercial, service and consultancy businesses;
Flexi Desks and Flexi Offices: modern shared and networked workstations or offices ideal for start-ups;
Secretarial and business centre services;
Advanced IT/telecommunications infrastructure;
As a licensed registered agent for RAK International Corporate Centre (RAKICC) and RAK Free Trade Zone (RAKFTZ), VK Law Consultancy FZE can offer cost-effective solutions that combine the advantages of both zones, allowing our customers to choose the most appropriate configuration for their business needs.
One of the best solutions is the Premium product which is a corporate structure comprised of a RAKICC company having a subsidiary in the RAK Free Zone (RAKEZ). This type of structure will benefit from the offshore features of an International Business Company while maintaining its operational and physical presence in the jurisdiction of registration with access to local and international banks.