The United Arab Emirates (UAE) has been a destination of choice for starting or growing businesses for decades now. Most investors find its economic stability, steady growth, larger markets, investor-friendly processes and a tax-free regime too attractive to pass up.
The UAE has the enviable position of being the centre of the international time zones and therefore, is the ideal place to locate an international business. Being well served by international airlines, it has become truly accessible and, in this digital age, well-connected.
Ras Al Khaimah in the UAE allows for a very efficient and productive working day dealing with Asia in the morning, Europe and Africa during the day and the Americas in the afternoon.
The UAE is no. 1 in the MENA region for ease of doing business index and no. 11 in the world bank’s annual ease of doing business ranking.Ease of doing business is an index published by the World Bank. It is an aggregate figure that includes different parameters which define the ease of doing business in a country.
The UAE is no. 2 in the World Government Trust Index, this report was prepared by Edelman Trust Barometer through online survey in 28 markets, 33,000+ respondents. The UAE is also the no. 8 largest oil producer in the world, and is no. 27 amongst 140 countries in the Global Competitiveness Ranking – highest in the region, and higher than Malta (36), Cyprus (44), Mauritius (49), Panama (64) And Seychelles (74).
The Global Competitiveness Report (GCR) is a yearly report published by the World Economic Forum that ranks countries based on the Global Competitiveness Index. The Global Competitiveness Index measures the set of institutions, policies, and factors that set the sustainable current and medium-term levels of economic prosperity.
The UAE is extremely economically stable and has a mature banking system with over 50 national and international banks. The country’s 2017 GDP per capita was USD 40,000, equal to Germany; and the UAE’s credit ratings are: AA from S&P and AA2 from Moody’s - equal to Hong Kong, France, UK and South Korea. (Obligations rated AA are judged to be of high quality and are subject to very low credit risk).
Recent Developments in International Business Company Formation
In 2017, RAK International Corporate Centre (RAK ICC) was established in the picturesque emirate of Ras Al Khaimah (RAK). The emirate is known as the ’rising emirate’, having gained a reputation for its recent economic growth and emerging business opportunities. RAK ICC, which is an amalgamation of two company registries, is among the leading registries for international business companies in the region.
With shareholders from over 160 countries and a string network of qualified registered agents, both local and international, there is an appropriate partner to meet all requirements.
Why RAK ICC?
There are numerous features that make RAC ICC the registry of choice for international business companies.
How can you use RAK ICC companies?
RAK ICC companies are used for a wide range of activities, including: Passive Holding Companies to ring-fence investments, public and private equity stakes and other assets; and active Holding Companies for manufacturing, treasury functions and Joint Venture Partnerships. They can also be used as a gateway for expanding a business to the Middle East, with physical and cultural proximity, offering an effective operating structure for management and reporting purposes with ease of ownership transfer. Moreover, RAK ICC companies can provide improved treasury efficiency and financial due diligence for local deals and facilitate foreign currency payments. Thus, international trading and procurement companies, managing sourcing in the region, can leverage scale to lower cost. For e-commerce companies, this provides a higher level of control and oversight compared to using distributors.
RAK ICC Advantage
RAK ICC has a very competitive cost advantage compared to other regulatory authorities in the region. Moreover, the UAE is the ideal location to develop a business, particularly as it offers a sustainable environment to grow substance.
Challenges for Offshore Jurisdictions
With traditional offshore jurisdictions coming under pressure from competitor, regulatory and reputational pressures, it is evident that client priorities are driving a shift from traditional offshore centres to high quality, well-regulated mid-shore and onshore centres. RAK ICC is responding to this by developing its strategy, regulations and compliance as part of its ongoing transformation into a leading premium jurisdiction for company formation and administration.
Where the UAE stands with the reporting obligations
Is the UAE a signatory?
As of May 2018, over 100 jurisdictions have signed or committed to sign the Common Reporting Standards (CRS), including Bahrain, Kuwait, Lebanon, Qatar, Saudi Arabia and the United Arab Emirates.
What information is expected to be shared, and by who?
Under the CRS, financial institutions are required to obtain the following information from customers and report to local tax authorities: name; address; jurisdiction(s) of tax residence; tax identification number(s); name of the reporting financial institution; account number; account balance; gross amount paid to the account in a year (profit, dividends, other income); and gross proceeds paid or credited to the account. Additional information in relation to controlling persons may include date of birth and place of birth.
How does this affect RAKICC companies?
RAK ICC companies holding bank accounts will have this information disclosed. Certain agents will have to make reports based on the services provided.
The UAE competent authority shall not exchange information under the CRS until it is satisfied that a reputable partner jurisdiction has in place adequate measures to ensure the required confidentiality and data security. These confidentiality obligations are evaluated by the global forum on transparency and exchange of information for tax purposes through its implementation monitoring programme.
RAK ICC is a well-established international business company registry with business-friendly and world-class regulations. It has a diverse client base reflecting its successful product offering and is operating under a strategy to continually update to meet the global demands of both regulators and clients.