What is RAK ICC and what types of offshore company can be formed in RAK ICC?
What is RAK ICC?
RAK International Corporate Centre (RAK ICC) is a Corporate Registry located in Ras Al Khaimah, in the United Arab Emirates. RAK ICC manages all aspects of registration and incorporation of International and Offshore businesses in Ras Al Khaimah.
RAK ICC is located 45 minutes’ drive from central Dubai and is a European Union Economic and Financial Affairs Council (ECOFIN) whitelisted offshore jurisdiction with ability to meet Economic Substance Regulations (ESR). RAK ICC jurisdiction has zero tax on Corporate Income, Capital Gains, Dividends, and Interest Income. It provides access to Common Law legislation through access to the common law courts in Abu Dhabi Global Markets (ADGM) and Dubai International Finance Centre (DIFC).
The registration process in RAK ICC is fast, and relatively cost-effective. RAC ICC also allows re-domiciliation, migration & continuation from various other offshore jurisdictions. There is no minimum capital requirement to set up in RAK ICC.
Which company structures can be registered and incorporated in RAKICC?
There are 5 types of company structures that can be incorporated by RAK ICC. They are:
- A Company Limited by Shares
- A Company Limited by Guarantee
- A Restricted Purposes Company
- A Segregated Portfolio Company
- An Unlimited Company
A Company Limited by Shares
The term “Limited by shares” refers to the fact that the liability of the shareholders to the company’s creditors is limited to the capital initially invested. This means that in the event of the company’s insolvency, the shareholders’ assets are protected.
In the company’s Memorandum of Association (MOA) there must be clear mention of:
- the maximum number of shares that the company is authorised to issue or that the company has chosen to issue an unlimited number of shares.
- The types of shares that the company is authorised to issue and the rights, privileges, restrictions and conditions pertaining to each.
This type of company structure must always have in place at least one director and one shareholder. Shares in the company can be held by more than one person, as such, joint ownership is recognised but must be clearly stated in the company articles.
A Company Limited by Guarantee
These types of companies are often chosen by non-profit organisations, such as sports clubs, workers’ co-operatives and membership organisations. They must use the suffix “Limited” or Incorporated” in the entity name or the abbreviation “Ltd” or Inc”.
They do not have any shares or shareholders, but are owned by guarantors who agree to pay a fixed amount towards any debts the company incurs because owners of these entities prefer to have the benefit of limited financial liability.
In RAK ICC, the structure differs in that the company can choose to issue shares. However, irrespective of whether or not shares are issued, at least one of the participants in the company must be a guarantee member and in the event that the company ceases operations, the guarantors must contribute a nominal sum.
The liability of a guarantor is limited to:
- The amount that the guarantor has agreed to contribute, as set out in the company’s memorandum and Articles of Association (AoA).
- Any other liability specified in the memorandum or AoA.
A Restricted Purposes Company
As the name suggests, a restricted purposes company is created for one specific business activity and may only carry out that one predefined activity.
This type of company structure is appropriate in situations where it makes sense to limit corporate capacity or for a company to have the comfort of only engaging in specific activities.
The limitation of company activities must be clearly stated in the company’s memorandum and is legally binding for the company, shareholders and directors.
A Segregated Portfolio Company
Segregated portfolio companies (SPC’s) have several uses, but are most frequently used with collective investment schemes as umbrella funds, in the establishment of captive insurance companies and occasionally as asset holding vehicles.
This type of structure allows for the segregation of different types of assets and liabilities from each other and negates the need to form multiple companies under a single holding company.
An Unlimited Company
The flexibility of this type of company is that it can be incorporated without a share capital. However legal liability of its members or shareholders is not limited, meaning that they have a collective obligation to settle any outstanding financial liability in the event of liquidation of the company.
There are several reasons why an unlimited company may be preferrable to an alternative business model, such as:
- The need for discretion concerning financial affairs. An unlimited company is not required to publicly divulge its financial statements. This can protect it from public, media or competitor scrutiny.
- When the company is doing business in an area where limited liability is not acceptable, required or practical.
- Providing increased confidence to creditors when compared to its limited company counterpart.
- The existence of very little risk of insolvency for creditors.
- When the company has sufficient finances to negate the need to approach lenders.
How can PRO Partner Group help?
At PRO Partner Group we have built enduring relationships with key government bodies and we have direct access to government departments, regulatory authorities and freezone authorities with our on-the-ground team of experts in each department.
We will streamline the process of business setup in RAK ICC and provide ongoing support and administration. We always ensure that every step is taken to accelerate the application and deliver outstanding results both in the company formation stage and the ongoing maintenance of the licence.
If you need assistance with setting up in RAK ICC or any other related onshore or offshore company setup, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman or Qatar, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at email@example.com or complete the contact form below and we will be delighted to assist you.