RAK Free Zone Companies: Complete Setup Guide for 2025

Discover how to establish RAK free zone companies with 100% foreign ownership, tax benefits on qualifying income, and streamlined business setup in one of the UAE’s most cost-effective free zones.

Quick answer
RAK Free Zone Companies are entities licensed by Ras Al Khaimah Economic Zone (RAKEZ). Setup means choosing a legal form (FZ-LLC or branch), selecting a zone facility, submitting required documents via the RAKEZ portal, then completing visas. Timelines and fees can vary and you must confirm current requirements on official RAKEZ pages.

Summary

✅ RAK free zone companies offer 100% foreign ownership with potential 0% corporate tax on qualifying income
✅ Setup process managed through RAKEZ portal, fees and timelines vary by activity
✅ Fast processing: Typical license issuance within business days (full setup timelines depend on banking and visas)
✅ Strategic location: Access to GCC, Middle East, Africa, and Asian markets
✅ Flexible options: Multiple license types, office spaces, and business activities supported
✅ Cost-effective alternative to other free zones in the UAE

Introduction

RAK free zone companies are entities licensed by Ras Al Khaimah Economic Zone (RAKEZ). Setup means choosing a legal form (FZ-LLC or branch), selecting a zone facility, submitting required documents via the RAKEZ portal, then completing visas. Fees and timelines may vary. You must confirm current requirements on official RAKEZ pages or through a registered partner.

Since its establishment in 2000, RAKEZ has become a major hub for international business, hosting companies from over 100 countries. The zone spans multiple locations including Al Hamra, Al Ghail, Al Hulaila, and the Port of Ras Al Khaimah, offering diverse business infrastructure from flexi workspaces to warehouses and industrial land. Whether you’re launching a trading company, manufacturing operation, or service-based consultancy, understanding the mechanics of RAK free zone business setup is essential for making informed decisions about your UAE market entry.

What Are RAK Free Zone Companies?

RAK free zone companies are business entities registered within the jurisdiction of Ras Al Khaimah Economic Zone Authority (RAKEZ), operating under UAE federal free zone regulations. These companies function as legally independent entities with distinct advantages compared to mainland UAE businesses.

Understanding Free Zone Business Structures in UAE

The UAE operates dual economic systems: mainland (onshore) and free zone territories. Free zones are designated economic areas with special regulatory frameworks designed to attract foreign investment. RAK free zone companies fall under RAKEZ Authority regulations and guidelines, with specific license terms tied to business activities.

The most common structure is the Free Zone Limited Liability Company (FZ-LLC), which functions similarly to a private limited company with limited liability protection for shareholders. RAKEZ also permits branch offices of foreign companies and representative offices for market research purposes.

Benefits of Setting Up RAK Free Zone Companies

Tax Advantages and Ownership Benefits

RAK free zone companies operate with these key benefits:

• 100% foreign ownership inside the free zone
• Licensing, facilities, and immigration services delivered by RAKEZ
• Facility ladder from flexi workspaces to warehouses and industrial land
• Corporate-tax treatment can be 0% on qualifying income for Qualifying Free Zone Persons, subject to FTA rules; non-qualifying income can be taxed at the standard rate. Always confirm against current FTA guidance.
• 0% personal income tax for employees and shareholders
• Full profit and capital repatriation without restrictions
• No currency exchange controls

Understanding Qualifying Income and Tax Treatment:

To access 0% on qualifying income, a free-zone entity must meet all Qualifying Free Zone Person conditions and earn Qualifying Income (per Cabinet Decision No. 100 of 2023 and Ministerial Decision No. 265 of 2023). Income that doesn’t qualify (including certain mainland transactions) is taxed at the regular 9% rate. Check the latest FTA Corporate Tax: Free Zone Persons guide for current requirements and excluded activities.

Strategic Location and Market Access

Ras Al Khaimah’s geographic position offers:

• Proximity to major markets: 2-hour flight to GCC capitals, 4 hours to East Africa, 4–5 hours to South Asian markets
• Port access: Saqr Port handles significant cargo volumes annually
• Airport connectivity: RAK International Airport with expanding routes
• Land borders: Direct road access to Oman and other UAE emirates
• Industrial clusters: Dedicated zones for ceramics, pharmaceuticals, manufacturing, and logistics

Types of RAK Free Zone Business Setup Options

FZ-LLC (Free Zone Limited Liability Company)

The most popular structure for RAK free zone companies, an FZ-LLC offers:

• Minimum shareholders: 1 (individual or corporate)
• Maximum shareholders: 50
• Share capital: No minimum requirement (Note: Banks generally require an initial share capital injection to facilitate corporate account opening—verify current banking requirements)
• Liability: Limited to share capital contribution
• Management: Directors appointed by shareholders
• Activities: Can hold multiple licenses for different business activities

An FZ-LLC can conduct business within the free zone, with other UAE free zones, and internationally. Free-zone entities cannot sell directly on the UAE mainland by default. On-shore activity requires an agent/distributor or an appropriately licensed mainland entity.

Branch Office and Representative Office Options

Branch Office: Extension of a foreign parent company

• Requires parent company documentation
• Carries out commercial activities on behalf of parent
• No separate legal personality
• Suitable for international companies expanding to UAE

Representative Office: Limited to marketing and liaison activities

• Cannot conduct commercial transactions
• Cannot generate revenue in UAE
• Functions as market research or representative entity
• Lower costs but restricted operational scope

RAK Free Zone License Cost Breakdown

Understanding the complete cost structure is essential for budgeting your RAK free zone company setup.

Initial Setup Fees and Government Charges

Fees and processing times depend on activity, legal form, and facility. Use the RAKEZ portal and service pages to verify current amounts and any express options before you file.

Typical cost components include:

• Business License (varies by activity type)
• Registration Fees (one-time government charge)
• Office Space (Flexi-desk provides limited monthly usage hours for meetings and regulatory compliance, not dedicated daily office access; dedicated office space available for regular operations)
• Visa Allocation (per visa quota)
• Establishment Card (company identity document)
• Share Certificate (shareholder documentation)

Always check with your Business consultant for current fee schedules, as pricing varies based on:

• Specific business activity
• Legal structure chosen
• Facility type and size
• Number of visas required
• Additional services needed

Step-by-Step RAK Free Zone Company Setup Process

Documentation Requirements

To initiate RAK free zone business setup, prepare:

For Individual Shareholders:

• Passport copy (valid 6+ months)
• Passport-size photographs (white background)
• Current address proof (utility bill, bank statement)
• Professional reference letter or CV (for some activities)

For Corporate Shareholders:

• Certificate of incorporation
• Memorandum and articles of association
• Board resolution authorizing UAE setup
• Certificate of good standing
• Passport copies of authorized signatories

Business Documents:

• Business plan (for certain activities)
• Previous company trade license (if applicable)
• Educational certificates (for professional licenses)
• No Objection Certificate (NOC) from sponsor (for UAE residents)

Setup Process Steps

Step 1: Pick activity and legal form (FZ-LLC or branch)
Step 2: Reserve a name; choose a qualifying facility
Step 3: Submit the application and KYC via the RAKEZ portal
Step 4: RAKEZ review and licence issuance; finalize facility lease
Step 5: Immigration steps (entry permit if needed, medical, biometrics, Emirates ID)

Processing Timelines:

Processing times vary based on application completeness, activity type, and facility selection. Verify current timelines on the RAKEZ portal before planning your launch. Full operational readiness (including visa processing and bank account opening) typically extends beyond initial license issuance.

Region-Specific Notes: RAK vs Other UAE Free Zones

RAK Free Zone vs Dubai free zones

Advantages of RAK:

• Generally lower cost structure compared to Dubai free zones
• Streamlined approval processes
• Affordable office space options
• Same federal tax framework

Advantages of Dubai Zones:

• Proximity to Dubai International Airport
• Larger business networking ecosystem
• More developed infrastructure in some sectors

RAK Free Zone vs Mainland UAE

Mainland Requirements:

• Local service agent required
• Generally higher licensing costs
• Can trade directly in UAE domestic market
• Must rent physical office space

RAK Free Zone Benefits:

• No local sponsor needed
• Competitive pricing
• Cannot trade directly in UAE mainland without distributor or licensed mainland entity
• Flexible office options including flexi-desks

Risks & Limitations

Understanding constraints helps you make informed decisions about RAK free zone companies:

Operational Limitations

• Mainland Trading Restrictions: Free-zone entities cannot sell directly on the UAE mainland by default. On-shore activity requires an agent/distributor or an appropriately licensed mainland entity. This structure is primarily for international trade and service provision.
• Physical Presence Requirements: RAKEZ mandates maintaining office space year-round. The entry-level Flexi-desk option typically provides limited monthly usage hours and is primarily for regulatory compliance and occasional meeting space, not daily, dedicated office operations.
• Business Activity Restrictions: Certain activities (e.g., banking, insurance, specific professional services) may require additional approvals or are restricted to specialized free zones.

Regulatory Considerations

• Qualifying Income Criteria: To maintain potential 0% corporate tax status, companies must meet specific Qualifying Free Zone Person requirements per UAE Federal Tax Authority (FTA) guidelines. Income derived from UAE mainland transactions may be subject to standard corporate tax rates. Refer to Cabinet Decision No. 100 of 2023 and Ministerial Decision No. 265 of 2023 for current qualifying and excluded activities.
• License Renewal Compliance: Failure to renew licenses on time results in penalties and potential business suspension.
• Visa Dependency: Employment visas are tied to the company license; license cancellation requires visa cancellation.

Financial Considerations

• Banking Challenges: UAE banks conduct strict due diligence; account opening timelines vary and applications may require additional documentation.
• Banking Capital Requirements: While RAKEZ has no legal minimum share capital requirement, banks generally require initial capital deposits as an operational prerequisite for opening corporate accounts. Verify current banking requirements with your chosen financial institution.
• Audit Requirements: Companies meeting certain criteria must conduct annual audits, adding operational costs.

Mitigation Strategies: Work with experienced business setup consultants like Prolink TFS who understand current regulations and maintain strong banking relationships to navigate these challenges effectively.

How to Proceed: Your Action Checklist

✅ Step 1: Define Your Business Scope

• Identify primary business activities
• Determine if free zone structure suits your market access needs
• Assess if you need UAE mainland trading capabilities (requires distributor or licensed mainland entity)

✅ Step 2: Prepare Documentation

• Gather passport copies, address proof, and corporate documents
• Prepare business plan (if required for your activity)
• Secure NOCs if currently UAE resident

✅ Step 3: Review Current Fees and Requirements

• Check official RAKEZ portal for up-to-date pricing
• Determine office space needs (flexi-desk for compliance only vs. dedicated office for daily operations)
• Calculate visa requirements for employees

✅ Step 4: Engage Professional Support

• Contact RAKEZ-accredited agents for guidance
• Compare service packages
• Verify agent credentials and track record

✅ Step 5: Submit Application

• Complete RAKEZ online application
• Upload required documents
• Pay initial fees

✅ Step 6: Plan Operational Setup

• Initiate bank account opening process early
• Arrange visa processing for key staff
• Set up accounting and compliance systems

Conclusion

RAK free zone companies deliver value for international entrepreneurs seeking UAE business establishment with full foreign ownership and potential tax advantages on qualifying income. With competitive pricing, streamlined processes through the RAKEZ portal, and comprehensive access to GCC and international markets, RAKEZ stands as a strategic alternative to higher-cost Dubai and Abu Dhabi free zones.

Success in establishing your RAK free zone business hinges on thorough preparation, clear understanding of qualifying income criteria per FTA guidelines, mainland trading restrictions, and partnering with experts who can streamline documentation, banking, and regulatory compliance from day one.

Ready to Establish Your RAK Free Zone Company?

Prolink TFS specializes in streamlined RAK free zone company setup with comprehensive packages covering license processing, visa facilitation, bank account assistance, and ongoing compliance support.

Contact Prolink TFS today at prolinktfs.ae to discuss your requirements and receive a customized setup proposal designed to meet your specific business goals.

Frequently Asked Questions (FAQ)

SOURCES

All information in this article is derived from official government and regulatory sources to ensure accuracy and trustworthiness:

1. Starting a business in a free zone — UAE Government (u.ae)
   Updated: 8 Jul 2024
   Accessed: January 2025
   URL: https://u.ae/en/information-and-services/business/starting-a-business-in-a-free-zone
2. RAKEZ official site — Government of Ras Al Khaimah
   Authority pages, facilities, portal
   Accessed: January 2025
   URL: https://rakez.com
3. RAK Government — RAKEZ entity page
   Authority listing, background
   Accessed: January 2025
   URL: https://www.rak.ae
4. FTA Corporate Tax: Free Zone Persons — guide and news notice
   Issuing Body: UAE Federal Tax Authority
   Accessed: January 2025
   URL: https://tax.gov.ae
5. Cabinet Decision No. 100 of 2023 — Determining Qualifying Income
   Issuing Body: UAE Cabinet
   Accessed: January 2025
   URL: https://tax.gov.ae
6. Ministerial Decision No. 265 of 2023 — Qualifying and Excluded Activities
   Issuing Body: UAE Ministry of Finance
   Accessed: January 2025
   URL: https://tax.gov.ae