RAKEZ — Ras Al Khaimah Economic Zone

Who runs it, and what it actually is

RAKEZ is the licensing authority for the emirate of Ras Al Khaimah, established by Ras Al Khaimah Law No. 2 of 2017, promulgated by H.H. Sheikh Saud bin Saqr Al Qasimi. It consolidated Ras Al Khaimah Free Trade Zone, founded in 2000, and the RAK Investment Authority, founded in 2005, into one incorporating authority. RAKEZ now reports more than 40,000 companies from over 100 countries across more than 50 industries.

It runs specialised zones rather than one campus: Al Nakheel and Al Hamra for commercial and service companies, the Al Hamra, Al Ghail and Al Hulaila industrial zones for manufacturing and logistics, and an academic zone. Most UAE free zones are an office tower with a licence desk attached. RAKEZ is an industrial estate that also issues licences.

One clarification, because it costs people money: RAKEZ is not RAK ICC. RAK International Corporate Centre is a separate offshore company authority — no trade licence, no premises, no residence visas. If you have been quoted a very cheap "RAK company", establish which of the two is meant before you pay.

The free zone and non-free zone split

This is what makes RAKEZ structurally different from IFZA, SHAMS or DMCC, and almost nobody explains it.

Under the RAKEZ Operating Rules the Authority's jurisdiction covers both a Free Zone Area and a Non-Free Zone Area, and it licenses in either. A Free Zone Entity is an FZE (sole owner) or FZ-LLC (two to fifty shareholders) on a RAKEZ licence alone. A Non-Free Zone Entity — an individual establishment or an LLC — needs a licence from RAKEZ and one from RAK Department of Economic Development, in that order.

So RAKEZ can put you on either side of the boundary without changing incorporating authority. It does not dissolve the boundary. A free zone licence is valid only inside the Free Zone Area, and the Rules are blunt: a Free Zone Entity may sell elsewhere in the UAE only through an agent, representative, distributor or a parent company holding the appropriate UAE licence.

The two entity types share an authority and almost nothing else, and the differences run all the way out to who you are allowed to sell to.

That last difference is the commercial one. It is the whole reason the non-free zone route exists, and the whole reason it costs more to run. Which side of that boundary you belong on is a decision in its own right, and RAKEZ's two sides and who each one may invoice works the choice through rather than describing the zone.

Every share can be foreign-owned, and one side needs it in writing

The first question most foreign founders ask has a short answer on the free zone side. A Free Zone Entity can be wholly foreign-owned: every share of an FZE or an FZ-LLC may be held by foreign individuals or foreign companies, and no UAE national partner is needed at any point. RAKEZ states 100 per cent foreign ownership as the position for its free zone entities.

The non-free zone side is where the old answer and the current one part company. A mainland LLC anywhere in the UAE used to need a UAE national majority shareholder. Federal Decree-Law No. 26 of 2020 removed that requirement, and Federal Decree-Law No. 32 of 2021 on Commercial Companies now carries the position: investors of any nationality may establish and wholly own a mainland company. RAKEZ had announced a wholly foreign-owned mainland route with RAK DED in August 2020, confined then to the positive list of sectors under the foreign direct investment law; the companies law has since gone wider.

What stays restricted is a defined list of activities of strategic impact under Cabinet Resolution No. 55 of 2021 — security and defence, banking, exchange houses, insurance, telecommunications and fisheries among them — where the competent authority sets the Emirati share of the capital or the board. Anyone quoting you a local partner for an ordinary commercial or industrial LLC in Ras Al Khaimah should be asked which rule requires one.

The reform was written for companies. The Ministry of Economy and Tourism lists the forms it reaches as the five in the Commercial Companies Law, the LLC among them; an individual establishment is not one of the five, so its ownership conditions are RAK DED's to state. Ask for them separately rather than assuming the LLC answer carries across.

One page has not caught up. RAKEZ's own legal-entity page still describes a non-free zone entity as established in association with a UAE partner. Federal law no longer requires that for most activities, but the licence is RAK DED's to issue, activity by activity, and neither a web page nor a consultant can settle it for you. Before you draw the shareholding of a Non-Free Zone LLC, have RAKEZ confirm in writing, against your exact activity, that RAK DED will license it with foreign shareholders only. It is a short question before formation and a restructuring after it.

What RAKEZ genuinely suits

Light manufacturing and assembly. The strongest case by some distance — industrial land, built warehousing, permanent power, on-site staff accommodation and plots you can build on under a musataha agreement, at land and labour costs well below Dubai.

Physical trading and distribution with storage. Warehousing near Saqr Port, the largest bulk handling port in the Middle East, and RAK International Airport. If your goods have weight and volume, the economics favour the north.

Cost-sensitive service companies with no need of a Dubai address. A consultancy invoicing overseas clients can be licensed here cheaply and legitimately — but this is where RAKEZ's edge over SHAMS or IFZA is thinnest, because you pay the location penalty for capability you never use.

Licence types

The Operating Rules list nine categories inside the Free Zone Area: Industrial, Commercial, General Trading, Service, E-Commerce, Educational, Media, Individual/Professional, and a Freelance Permit for sole practitioners trading under their birth name. In the Non-Free Zone Area the list narrows to three — Industrial, Commercial and Professional.

A set number of activities within one category can share a licence; another category generally needs a separate one. RAKEZ markets up to ten activities per licence, but the category rule still governs. Pick the activity that describes what you will actually do and say in a bank interview, not the one that sounds widest.

What setup actually involves, in order

1. Activity and category first. The category sets the licence; the licence sets the premises you may lease.
2. Choose the side — Free Zone Entity, or Non-Free Zone Entity with the extra RAK DED licence.
3. Trade name reservation, checked for conflicts and for names implying regulated or governmental status.
4. Application, naming shareholders, category, activities and the manager, who appears on the licence.
5. A business plan. The Rules require the proposed business, investment required, evidence of shareholder liquidity or access to funding, headcount with job descriptions and salaries, anticipated consumption of services, premises needed and waste disposal measures. Not a formality, and the step most agents quietly write badly on your behalf.
6. Pre-approvals where the activity needs them; industrial, educational and media activities routinely do.
7. Premises reservation and lease. Nothing issues until the lease is executed and paid.
8. Licence issue, then establishment card, immigration file, entry permits, medicals and Emirates ID.
9. Bank account — budget more time here than for everything above combined.

A licence runs at least twelve months and renewal must be applied for at least thirty days before expiry. Worth reading twice: the Rules state that granting a renewal is at the Authority's discretion.

What it costs

RAKEZ publishes package prices, which is more transparency than most zones offer. At the date of review its Biz Starter package is advertised at AED 6,000 for a licence with coworking membership and no residence visa stated, and its SME business setup package at AED 14,000 per year including one residence visa and shared workstation access, with extra visas at AED 4,000 each up to three and an optional premium tier at AED 2,500. RAKEZ's terms apply.

Treat those as the floor. On top sit the AED 2,000 refundable visa security deposit the Rules require per sponsored non-GCC employee, waivable for up to five people at owner, partner, director, general manager or manager grade; medical, Emirates ID and entry permit charges per person; any premises beyond the included desk; external approvals; attestation of foreign corporate documents; and audited financial statements if you intend to claim free zone tax status.

Put the published figures and the charges that sit on top of them on one scale, and the advertised headline stops being the number that decides anything.

On one scale: the SME setup package is AED 14,000 a year and carries one residence visa and shared workstation access, Biz Starter is AED 6,000 with coworking membership and no residence visa stated, each extra visa is AED 4,000 up to three, the optional premium tier is AED 2,500, and the refundable visa security deposit is AED 2,000 per sponsored non-GCC employee.

Authority fees and promotional pricing change without notice. Every figure here is indicative — confirm the ones that drive your decision with RAKEZ and the Federal Tax Authority before you sign.

The licence fee is also only the part of the bill Ras Al Khaimah sets. The travel and the salary differential that come with an address outside Dubai and Abu Dhabi are priced in what a cheaper emirate actually charges you, and between them they decide whether the saving survives year two.

Visas, and why the allocation is not a promise

Package marketing quotes visa allocations as entitlements. RAKEZ's own Operating Rules say otherwise, in plain words: the number of visas issued to a licensee is determined at the absolute discretion of the Authority from time to time.

In practice allocation tracks premises. A flexi facility supports a small number; an office scales with floor area; a warehouse or industrial plot with staff accommodation supports generously, which is where RAKEZ beats every low-cost Dubai zone outright. Count your year-two headcount before buying your year-one package, because upgrading premises mid-term to raise the visa allocation costs more than leasing correctly at the start.

Premises, and the obligation hidden inside them

RAKEZ offers flexi facilities and coworking, shell-and-core, standard and executive offices, warehouses, retail units, employee accommodation, and land for development under a musataha agreement.

There is a condition founders miss. The Rules require a leased office to be operational within sixty days of the lease commencing and to be functional and attended by its employees during normal office hours; warehouses within ninety days. A flexi desk nobody ever sits at is therefore not merely thin evidence for a bank or the FTA — it is inconsistent with the lease you signed.

Banking

RAKEZ names its banking partners publicly: RAKBANK, Mashreq, FAB, ADCB, Emirates NBD, Emirates Islamic, Commercial Bank of Dubai, Commercial Bank International, Wio, Mbank, ruya, Banque Misr and Emirates Development Bank.

RAKBANK — the National Bank of Ras Al Khaimah — is headquartered in the emirate, has a presence at RAKEZ's service centre, and is the most receptive, for the structural reason that RAKEZ companies are its home market. Wio and Mbank tend to be fastest for digital-first service businesses. The larger banks are open but apply their usual scrutiny.

Applications fail for a consistent set of reasons, and only one is the zone itself:

• The thin file. A flexi desk, one non-resident shareholder, no UAE staff, projected revenue in the millions. Each element is fine alone; together they describe an operation that could not plausibly exist at the address on the licence.
• Distance as evidence. A company licensed in Ras Al Khaimah whose director lives and works in Dubai invites the question of where it actually operates.
• Activity mismatch. The licence says general trading; the founder describes a marketing agency. Created at formation, discovered at the bank.
• Unexplained source of funds, unresolved ownership chains, or counterparty concentration in territories the bank has exited.

It is less forgiving here than with a DMCC licence, because the zone's name does less of the work for you.

The compliance that follows

Corporate tax. Federal Decree-Law No. 47 of 2022 applies to financial years beginning on or after 1 June 2023, and a RAKEZ company is not exempt. It may qualify as a Qualifying Free Zone Person and take 0% on Qualifying Income, but the FTA's conditions are cumulative: adequate substance in the free zone, qualifying income, no election out, arm's length dealings with related parties, transfer pricing documentation, audited financial statements, and non-qualifying revenue below the lower of AED 5 million or 5% of total revenue.

Three consequences are routinely misrepresented, and all three sit in the FTA's own bulletin. A Qualifying Free Zone Person does not get the AED 375,000 zero-rate band — its entire non-qualifying taxable income is charged at 9% from the first dirham. Failing any condition removes the status for that tax period and the four following ones. And Small Business Relief is closed to a Qualifying Free Zone Person: under Ministerial Decision No. 73 of 2023 a resident business with revenue at or below AED 3 million can elect to be treated as having no taxable income, for tax periods ending on or before 31 December 2029 — extended from 31 December 2026 by Ministerial Decision No. 131 of 2026, issued 29 July 2026, threshold unchanged. For many small consultancies that relief is worth more than a 0% rate bought with an annual audit. Enrolment with the FTA is required either way, within the timelines in FTA Decision No. 3 of 2024; returns fall due nine months after the tax period ends.

Personal income tax. There is none, and it is not something RAKEZ grants you. The UAE levies no income tax on individuals, inside a free zone or outside one, so the salary you draw from a RAKEZ company is not taxed in your hands here, and wages sit outside corporate tax by name. A dividend you take as a private shareholder counts as personal investment income, which corporate tax leaves alone so long as you hold the shares in your personal capacity rather than through a licensed business. The exception on this page is the Freelance Permit, and the Non-Free Zone individual establishment alongside it: neither is a company, so the business and its owner are one taxpayer. Under Cabinet Decision No. 49 of 2023 a natural person enters corporate tax once turnover from business activity exceeds AED 1 million in a calendar year — and because a natural person cannot be a Free Zone Person, the 0% Qualifying Free Zone Person route is closed to a permit holder whatever the income. The permit, the sole establishment and the one-owner company are set against each other in working alone in the UAE. None of this reaches your home country's claim on you, which turns on its own rules rather than on where the licence was issued; UAE tax residency and what your home country still taxes works through it.

One figure decides that last point, and it is a turnover figure rather than a profit one.

In one line: under Cabinet Decision No. 49 of 2023 a natural person enters corporate tax once turnover from business activity exceeds AED 1 million in a calendar year, and below that line business income, wages and a dividend held in a personal capacity all sit outside it.

VAT. Cabinet Decision No. 59 of 2017 names the Ras Al Khaimah Designated Zones as RAK Free Trade Zone, RAK Maritime City Free Zone and RAK Airport Free Zone — legacy names predating the RAKEZ consolidation. The treatment covers goods, not services, and only specific fenced, customs-controlled areas. The FTA tells taxable persons to confirm designated-zone status with their free zone authority; if your model depends on it, get it in writing for your facility before you lease.

Economic substance. Largely historic. Following Cabinet Decision No. 98 of 2024, announced by the Ministry of Finance on 14 October 2024, notifications and reports are no longer required for financial years ending after 31 December 2022, though obligations for 2019–2022 remain live. Anyone still selling you an annual ESR filing for a current year is selling you nothing.

Beneficial ownership. Cabinet Decision No. 109 of 2023 requires companies in the mainland and in non-financial free zones — RAKEZ included — to maintain records of shareholders and beneficial owners and file them with their incorporating authority, at a 25% ownership or control threshold.

AML. If your activity is a Designated Non-Financial Business or Profession — real estate brokerage, dealing in precious metals and stones, audit and accounting, corporate service provision — then under Federal Decree-Law No. 10 of 2025 and Cabinet Resolution No. 134 of 2025 you must enrol in goAML with the Ministry of Economy and Tourism and appoint a compliance officer. Fines begin at AED 50,000. The obligation attaches to the activity, not the emirate, and it is the most commonly missed item on a new licence.

Employment falls under Federal Decree-Law No. 33 of 2021. There is no separate free zone labour code.

None of those instruments landed at the same time. Set on a true date axis, the pattern is a quiet start and then four years in which almost everything a RAKEZ company answers to was written, re-dated or given a closing line.

In order: Ras Al Khaimah Law No. 2 of 2017 created RAKEZ and Cabinet Decision No. 59 of 2017 named the Designated Zones; Federal Decree-Law No. 20 of 2018 brought goAML; Federal Decree-Law No. 26 of 2020 removed the majority shareholding requirement and Federal Decree-Law No. 32 of 2021 now carries the position; economic substance filings stop with financial years ending after 31 December 2022, confirmed by the Ministry of Finance on 14 October 2024 under Cabinet Decision No. 98 of 2024; corporate tax applies to financial years beginning on or after 1 June 2023; beneficial owner records fall under Cabinet Decision No. 109 of 2023; and Small Business Relief closes for tax periods ending after 31 December 2029, extended from 31 December 2026 by Ministerial Decision No. 131 of 2026.

Where RAKEZ is the wrong choice

We would rather lose the licence fee than place you here badly.

Your clients are in Dubai. Ras Al Khaimah is roughly 100 km away — about seventy minutes each way in reasonable traffic, considerably worse when it is not. That is a standing tax on every meeting, consistently underestimated, and the most common reason a RAKEZ company relocates within three years.

You need to hire specialists. The RAK talent pool is materially smaller than Dubai's, and candidates with options want a Dubai address or a relocation package that erases your saving.

You are selling into the UAE mainland. A Free Zone Entity reaches mainland customers only through an agent, distributor or parent company. RAKEZ's non-free zone route answers that, but price it against a Dubai mainland licence — a RAK DED licence returns you to mainland compliance without giving you a Dubai address.

Your activity is financial. RAKEZ has no financial services regulator. Banking, insurance other than reinsurance, fund management, payment services and virtual asset activity belong in DIFC, ADGM or under VARA.

Brand credibility is load-bearing. If you are raising institutional money, contracting with large corporates or expecting a difficult account opening, a RAKEZ licence makes each conversation slightly harder than a DMCC or DIFC licence would. Slightly, but repeatedly.

You expect a free zone to mean no tax. It does not, and the Qualifying Free Zone Person route often costs a small company more in audit fees than it saves.

You want the cheapest licence and nothing else. SHAMS is cheaper and closer to Dubai. With no need for a warehouse, a plot or an industrial licence, you are paying a location penalty for capability you will never touch.

You want the option to move zones later. Federal company law gives no general route from one UAE free zone to another: whether a company can move depends on both zones' own rules. Where they do not provide for it, leaving RAKEZ means a new entity, new licence, new visas and a new bank account.

How it compares to its nearest alternatives

Against SHAMS, RAKEZ costs more and sits further from Dubai, but licenses a far wider range of activity and offers warehousing and industrial land SHAMS cannot touch. Against KEZAD, it is smaller, cheaper and faster, with shorter lease commitments — KEZAD wins decisively at genuine industrial scale and loses everywhere below it. If you need no physical space and your customers are in Dubai, neither zone is yours, and we will say so.

Sorted by where each case actually ends rather than by the order this page sets them out, the cases above fall into a short list of destinations, and only some of them are RAKEZ.

Read it by destination: light manufacturing and assembly, physical trading and distribution with storage, and a cost-sensitive service company with no need of a Dubai address all land at RAKEZ; the cheapest licence and nothing else lands at SHAMS; genuine industrial scale lands at KEZAD; selling to customers on the UAE mainland needs a mainland licence, because a Free Zone Entity reaches them only through an agent, distributor or parent company; and banking, insurance other than reinsurance, fund management, payment services or virtual asset activity belongs in DIFC, ADGM or under VARA.

Two other profiles on this site answer the same question from a different address. Ajman Free Zone sets out its own costs, limits and visa allocation for a founder whose reason for looking outside Dubai is price alone.

SAIF Zone covers Sharjah's warehousing and light manufacturing case, which is the nearest thing on the site to the industrial argument for RAKEZ. Read whichever matches the weight of what you will actually store or make.