In an attempt to uphold its position as one of the most business-friendly and innovative UAE free zones, Ras Al Khaimah free zone (RAKEZ) has rolled out Dual Licensing in January 2022 after introducing a women entrepreneurship package and gaming license programme. The newly announced licensing structure is strategically designed to attract more foreign investment in the country through new company formation in Dubai UAE.
The Group CEO of RAKEZ, Ramy Jallad noted, “We are always keen to provide our clients with the best solutions. We launched the Dual Licence structure for this very reason – to offer them the best of both free zone and mainland benefits, all without the need to incorporate a separate company. This package opens up a new market for their business, and substantially expands their accessibility and reach; all whilst reducing the red-tape requirements of the past.”
Dr Abdulrahman Alshayeb Alnaqbi, Director General of RAK DED, remarked, “We are pleased to collaborate with RAKEZ on yet another great initiative for the benefit of global investors who chose Ras Al Khaimah to base their operations. We will continue to work together to further elevate Ras Al Khaimah’s investment landscape and make it even more welcoming and dynamic than it is today.”
Dual License, launched in collaboration with Ras Al Khaimah Department of Economic Development (RAK DED) will allow investors to operate in both mainland and free zones from one office without requiring an additional mainland facility. This is a cost-effective business solution and will grant investors 100% foreign ownership including bidding rights for government contracts.
RAK DED is the authorized entity responsible for issuing licenses for Ras Al Khaimah mainland companies. It will issue a trade license to the free zone companies that wish to extend their activities in the mainland and make products and services offerings. A company holding a Dual license will be recognized as a ‘Branch of a free zone company’ with a legal identity as its parent company. The scope of business activities of the mainland branch should be similar to that of its parent entity in the free zone.
UAE mandates all mainland companies to have a physical office for opening bank accounts. A trade license is only issued on submitting the lease agreement to the respective DEDs of each emirate and after banks verify the physical office address for approving bank account opening. A free zone company in RAKEZ holding a Dual license can however start a mainland branch without any physical office space in the mainland and can carry out business activities on the mainland from its office in the free zone.
The Dual license has come as a ‘new year present’ offering considerable benefits to the investors. Once a RAKEZ Dual License is obtained, free zone companies can have wider access to the mainland customers to distribute products and offer services. As per rule, free zone companies are only allowed to conduct business activities within the free zone premises.
The dual license helps companies to avoid additional cost burdens on mainland office rentals and maintenance and provides complete access to the mainland without paying any such fixed costs and overheads. Daily operational costs are also avoided as there is no need for separate administrative and accounting setups.
RAKEZ Dual License however puts some restrictions on the business activities and only allows activities permitted by RAKEZ and RAK DED. Activities falling outside its domain and requiring ministerial approval are not allowed.
With the introduction of the Dual Licensing, the entire landscape of business setup in Dubai free zone and UAE has been completely transformed offering tremendous cost benefits to foreign investors. However, before opting for this license entrepreneurs and investors must carefully consider the restricted activities and seek the advice of corporate service providers based in Dubai UAE.
