The buzz about the business-friendly investment environment of the emirate has drawn thousands of international companies to locate in Ras Al Khaimah Free Trade Zone (RAK FTZ), a cost-effective market entry portal to the rapidly growing Middle East, Africa and South Asia region. RAK FTZ has been recognised by fDi Magazine as one of the best free zones in the world for small- and medium-sized enterprises that are looking to access the vast potential in this fast-evolving region of more than 2.5 billion people. 

The lure of RAK FTZ is quite obvious. Businesses in the free zone do not have to pay any corporate or income taxes, and they can own 100 per cent of their ventures. Companies can also fully repatriate their profits, and business costs are up to 50 per cent lower than in other emirates, allowing companies to maximise their return on investment. 

One of the key advantages of RAK FTZ is its proximity to one of the world's largest logistics hubs: Dubai. The free zone is only 45 minutes from the Dubai International Airport, which serves more than 125 airlines that fly to nearly 300 destinations across six continents. 

"The UAE has become a leading host for global foreign investment because of its political stability, sound economic policies and business-friendly regulatory environment," says RAK FTZ acting CEO Ramy Jallad. "Within the UAE, RAK FTZ provides international investors one of the most stable and secure environments to establish and grow their businesses, regardless of size."

Since its inception almost 15 years ago, RAK FTZ has matured into the preferred destination of more than 8,000 businesses from more than 100 countries. These companies represent more than 50 highly diverse sectors and industries, including value-added distribution and trading, consulting and other services, education, and a variety of manufacturing activities. 

"RAK FTZ clients have the advantage of a more cost-effective base of operations than the big city centres of the UAE, allowing them to maximise their profits and grow their companies more quickly," Jallad says. "In addition to this favourable cost structure, the free zone also offers a comprehensive set of award-winning, ongoing business set-up services and facilities. Our objective is to 'cut the red tape' and 'roll out the red carpet' for our clients."

World-class facilities and services

The free zone makes it as easy as possible to establish a business in the UAE. RAK FTZ provides fast-track licensing and registration, investor and worker visa issuance, and freedom to source employees and materials globally. With business solutions tailored specifically to accommodate individual company needs, RAK FTZ offers business centre facilities, a variety of offices, secured warehouses and land for lease across three specialised free zone parks. These include the Business Park for office clients, the Technology Park for trading and light manufacturing, and the Industrial Park for heavy manufacturing. Additionally, the RAK Academic Free Zone caters to educational institutions, vocational schools and training centres.

The free zone parks and the RAK Academic Free Zone are complemented by a highly modernised and comprehensive infrastructure system. For logistical infrastructure, Ras Al Khaimah boasts efficient road links to the rest of the emirates and other Gulf Cooperation Council (GCC) countries, and proximity to a variety of world-class port and airport options. The free zone offers quick access to the emirate's five seaports, including Saqr Port, the largest bulk commodity port in the Middle East, and the Ras Al Khaimah International Airport. The free zone is also only 90 minutes from Port of Jebel Ali, the world's largest man-made harbour and the biggest port in the Middle East. While its strategic location provides easy access to the dynamic markets of the Middle East, Africa, South Asia and Europe, RAK FTZ also works closely with customs authorities to ensure clients can fast track their imports and exports.

Equally important are the quality-of-life facilities, such as housing, education, health care, resort and entertainment establishments, which cater to the Emirati and expat population. The cost of living and doing business in Ras Al Khaimah is substantially lower than the UAE average, and dramatically lower than other traditional business centres such as London, New York, Hong Kong and Singapore.

Special focus on Asia

As more than half of RAK FTZ's client companies are from Asia, the region is critical to the free zone's future success. 

"The world's largest continent is not only home to the second-largest economy in the world, but is also a key logistical destination for the majority of our clients," Jallad says. "In the last two years, we have been making a major push particularly towards East Asia."

RAK FTZ has expanded its marketing activities to include China, South Korea, Japan and other countries in East Asia. As a result, more investors from these areas are setting up companies in Ras Al Khaimah. To best serve the Asian market, RAK FTZ has a special office and a business support team with the requisite language capabilities that specifically help Asian companies establish and grow in the free zone.

Focusing on Asia's major growth sectors such as manufacturing, RAK FTZ's existing clients are already supplying a wide range of products, from machines, building materials, petroleum and chemicals to vehicle parts and accessories, medical and cosmetic products, and packaging. The free zone is also targeting other key growth sectors such as IT services and media, wholesale trade and administrative support services. With the recent opening of Sheikh Khalifa Specialist Hospital in Ras Al Khaimah, RAK FTZ will also create synergies with Asia's health care industry. The medical facility is the largest specialist hospital in the Middle East, and is under South Korean management.

To date, the free zone has a long list of successful client companies from Asia. Among them is Oren Hydrocarbons Middle East, a leading manufacturer and supplier of drilling fluids and mud chemicals for the global hydrocarbons exploration and production industry. Incorporated in 1990 in India, the company set up a facility in RAK FTZ in 2008 to cater to the region. 

The company opened in RAK FTZ with 20 employees, and has grown to 85 employees today. Its facilities have spread across the globe to include China, Malaysia, Egypt, Saudi Arabia, Sudan, Iraq and the United States. With more than 25 manufacturing units, the company produces world-class oilfield chemicals. 

"We have a dedicated team that specifically reaches out to investors in Asia, encouraging them to set up profitable companies in the free zone," Jallad says. In conjunction with RAK FTZ's top management, this team travels across Asia with road shows and presentations to attract entrepreneurs. Once Asian companies register with the free zone, RAK FTZ has special packages that include services and facilities tailored to their business needs. 

The free zone's business development campaigns have already attracted many Asian companies. Last year, RAK FTZ welcomed Jalal Board Point, which manufactures a wide array of functional boards ranging from ceramic steel and glass boards to general boards such as whiteboards and chalkboards. A joint venture between UAE stationery trader Mohammed Yousuf Jalal and South Korean writing board manufacturer Board Point Korea, the new company chose to set up in RAK FTZ because of the free zone's excellent services, top-notch facilities and lower costs, allowing its business to realise heftier earnings.

Meanwhile, RASKO Enterprises began operations at the facility in July last year, primarily importing and exporting Korean and other Asian food items. Frozen seafood, rice, vegetables, nuts and noodles are among the products that the company supplies to the UAE and throughout the member countries of the GCC. Using RAK FTZ's strategic geographical location, RASKO will also supply food to East African and North African countries.

Successful engagements in China 

Fruitful endeavours in Asia also include the investment seminar conducted by RAK FTZ in partnership with the China Chamber of International Commerce in Beijing last November. 

A successful networking event with high-level business leaders and Chinese government officials, the seminar resulted in RAK FTZ receiving more than 100 inquiries from prospective clients. 

The free zone also hosted in Ras Al Khaimah members of the China Cuisine Association, who were interested to learn about the free zone's advantages, especially the lower labour costs. As the cost of labour continues to rise in China, wages and other business costs tied to facilities and employee housing remain significantly lower in RAK FTZ. These factors translate into higher profit margins for prospective Chinese clients.

"Building on the success and momentum of these engagements, we will continue to strategically reach out to the dynamic markets of the rapidly developing Asian economies, especially China," Jallad says. 

With thousands of clients from all over the world established at RAK FTZ, and an international presence centred on its promotional offices in Germany, Turkey and India, the free zone is committed to playing a crucial role in global trade and business. 

RAK FTZ is also increasingly making further inroads along the New Silk Road into China and beyond, introducing new businesses and entrepreneurs to the unlimited opportunities in the Middle East, Africa, South Asia and Europe, and solidifying its reputation as the ideal cost-effective investment destination. This reputation, however, is nothing new for Ras Al Khaimah. 

As its calm blue waters and pristine beaches were once a trading centre of the ancient Middle East, RAK FTZ is expanding on its long-standing heritage of linking the East with the West.