Ras Al Khaimah (RAK) has emerged as one of the UAE’s most promising business hubs, attracting entrepreneurs, SMEs, and large corporations from around the globe. With its strategic location, investor-friendly policies, low cost of operations, and diverse economic sectors, RAK is more than just a scenic emirate, it’s a launchpad for sustainable business success.

Whether you’re a seasoned entrepreneur or starting your first venture, this comprehensive step-by-step guide will walk you through how to start a business in Ras Al Khaimah in 2025.

Why Choose Ras Al Khaimah for Business?

Before diving into the steps, it’s important to see why RAK stands out as a prime hub for business growth. 

  • No personal or corporate income tax
  • Low business setup and operational costs
  • Access to global markets via RAK Port and proximity to Dubai
  • Multiple free zones catering to different sectors
  • Strong support for foreign investors and 100% foreign ownership in many sectors


How to Start Your Business in RAK: A Step-by-Step Guide

Step 1: Choose the Right Business Activity

Your first move is to define your business activity clearly. Are you planning to open a trading company, launch a consultancy, manufacture products, or enter the hospitality sector? Each business type falls under specific licensing categories such as commercial, professional, industrial, or tourism. The activity you choose will determine the kind of license you need and influence decisions down the line, such as office location and legal structure. Authorities like RAKEZ (Ras Al Khaimah Economic Zone) provide detailed lists of approved business activities to help you make an informed decision.

Step 2: Decide Between Mainland or Free Zone

Next, you need to determine whether to set up your business in a free zone or on the mainland. Free zones in RAK, such as RAKEZ, RAK Maritime City, and RAK International Corporate Centre (RAK ICC), offer 100% foreign ownership, full repatriation of profits, and streamlined processes for setup and operations. They are particularly beneficial for businesses focusing on international trade, online services, or manufacturing. If your goal is to provide services directly within the UAE market or deal with government contracts, then setting up on the mainland, under the Department of Economic Development (DED), may be the more suitable choice.

After choosing your location, it's time to select the legal structure of your business. The structure determines your legal responsibilities, tax liabilities, and how you can operate. In a free zone, you might register as a Free Zone Establishment (FZE) if you’re a solo founder, or as a Free Zone Company (FZC) for multiple shareholders. If you’re expanding a foreign company, opening a branch is another option. For mainland operations, setting up as a Limited Liability Company (LLC) is the most common route, offering protection of personal assets while allowing you to trade within the UAE.

Step 4: Reserve a Company Name

With your legal structure in place, you’ll need to select and reserve your company name. The name should be unique and must follow UAE naming conventions. It cannot include religious or political references, must avoid offensive terms, and should ideally reflect your business activity. Authorities often require two or three name options in case your first choice is unavailable. Once approved, the name can be reserved through either the free zone authority or the RAK DED.

Step 5: Apply for Initial Approval

Once you have a business activity, structure, and name, the next step is to apply for initial approval. This indicates that the government has no objections to your proposed business plan and allows you to move forward with the rest of the process. You’ll typically need to submit passport copies of all shareholders and directors, your business name and activity details, and in some cases, a brief business plan. Initial approval is not a license but is required before you can lease an office or finalize your license application.

Step 6: Lease an Office or Facility

Having a physical address is mandatory for company registration. Depending on your business type, you’ll choose between shared desk spaces, executive offices, or industrial facilities. Free zones like RAKEZ offer flexible and cost-effective leasing options, including co-working spaces for startups, private offices for SMEs, and warehouses for manufacturers. The lease agreement will be required when you submit your final business license application, so choosing the right space early on is critical.

Step 7: Submit Final Documents and Pay Fees

With initial approval and your lease in hand, you can proceed to submit the final documentation and make the necessary payments. These documents usually include the signed lease, passport copies, shareholder agreements, and a No Objection Certificate (NOC) if you’re currently employed in the UAE. You’ll also pay the relevant license and registration fees, which vary depending on your chosen activity, license type, and location. RAK is known for offering one of the most affordable setup options in the UAE, especially for small businesses and startups.

Step 8: Receive Your Trade License

Once your application is approved and fees are paid, you’ll be issued your business license. This document legally allows you to operate within your approved business activity and jurisdiction. At this point, your company is officially registered, and you can begin trading, signing contracts, hiring staff, and opening bank accounts. The license is typically valid for one year and must be renewed annually to remain active.

Step 9: Open a Corporate Bank Account

Now that you’re officially licensed, the next critical step is to open a business bank account. This allows you to manage company finances, receive payments, and maintain financial transparency. Banks in the UAE such as RAKBANK, Emirates NBD, ADCB, and Mashreq offer a variety of business account packages. You’ll need to submit your trade license, office lease agreement, passport copies, and sometimes a business plan or projected financials. The approval process may take a few days to a few weeks depending on the bank's KYC (Know Your Customer) procedures.

Step 10: Stay Compliant

After setup, it’s essential to maintain legal and financial compliance to avoid penalties and interruptions. This includes renewing your trade license annually, maintaining proper bookkeeping, registering for VAT if your turnover exceeds the threshold, and adhering to labor laws when hiring employees. Free zones in RAK offer support services that can help with accounting, HR, and other compliance-related needs, allowing you to focus more on growth and less on red tape.

RAK as a Smart Choice for Entrepreneurs

Starting a business in Ras Al Khaimah offers both affordability and accessibility. Its investor-focused policies, well-connected infrastructure, and growing economy make it an ideal base in the UAE. Whether you’re building a tech startup, launching a hospitality venture, or scaling a manufacturing unit, RAK welcomes innovation and enterprise. The Ras Al Khaimah Investment and Business Summit (RAKIS) serves as a vital platform to engage with key stakeholders, explore new ventures, and witness the Emirate's strategy in action. Join us at RAKIS and be part of shaping Ras Al Khaimah’s future: https://rakisummit.com/register?t=enquiry