Ras Al Khaimah-The Middle East’s fast-emerging investor haven
Ras Al Khaimah (RAK) has been the embodiment of a stable, growing, resilient and hard-working society whose economic success continues to resonate across the Middle East. Though not awash with hydrocarbon deposits – a key resource that has fuelled the economic growth of its neighbouring emirates and other countries in the GCC – RAK has defied the odds and has witnessed outstanding GDP growth and macroeconomic stability in recent years, building on a highly successful economic diversification program that has created a major influx of capital and investment opportunities for the emirate.
It has certainly been a remarkable achievement to attract thousands of investments from countries across the world considering that the institution tasked to oversee such matters – Ras Al Khaimah Investment Authority (RAKIA) – was created only five years ago. Established following the Emiri Decree No. (2)/ 2005 issued by H.H. Sheikh Saqr Bin Mohammed Al Qasimi, Supreme Council Member and Ruler of Ras Al Khaimah, RAKIA's primary role was to oversee the socioeconomic development of Ras Al Khaimah, with a particular focus on transforming the emirate into a global investment magnet.
"We had to start from scratch and it was initially a big challenge to compete with other established investment markets in the region. But we were very determined and, more importantly, we had the full support of His Highness and the RAK Government, which was crucial as we had to implement major reforms, institute new policies and develop large-scale infrastructure projects aimed at enhancing the investment and business landscape of the emirate," says Dr. Khater Massaad, CEO of RAKIA.
The economic initiatives of Ras Al Khaimah are essentially directed by RAKIA, which also manages the emirate’s three investment zones – the Industrial Zone and the Free Zone in Al Hamra, and the Industrial Park in Al Ghail. Under RAKIA, infrastructure facilities were specially developed to cater to several high-potential investment sectors, while economic incentives were also created to enhance the business prospects of investors. The sectors that are now rapidly being populated by investors from all over the world and are becoming prime economic contributors include industrial and manufacturing; warehousing, cold stores, transport and distribution; tourism; real estate and construction; mining, minerals exploration, extraction and quarrying; food processing and dairy products; international maritime-related industries and services, including maintenance and fabrication works; and trade and commerce.
Highlighting the continued success story of RAK, a recent report revealed that there had been a 75 per cent growth in the total number of businesses registered – comprising local and international investors – in the emirate during the first quarter of 2010. Moreover, in the month of March 2010 itself 115 new businesses registered with RAKIA, setting an all-time record with the most number of businesses registered with the investment authority in a single month.
There are now a total of 2,834 businesses registered with RAKIA, representing investors from diverse non-oil sectors, including industrial, commercial, trading, services/consulting, and media companies. In addition, negotiations are underway with several more companies from countries including Belgium, UAE, USA, Kuwait, Egypt, Turkey, Italy, India, Germany, France, Pakistan and Canada, to set up business ventures and investment activities in the emirate. Similarly, offshore investments have dramatically increased in the emirate, registering a 90 per cent growth during the first three months of 2010 over the same period in 2009.
Up to 66 per cent of businesses registered in RAKIA are from international destinations like Europe, India, USA, Russia, CIS and several Asian countries, while 19 per cent are from the rest of the Middle East. Domestic investors account for the remaining 15 per cent of business registered in the emirate. Among the top European companies that have registered with RAKIA include Arc International (France), Pikko (Finland), Duscholux (Germany), Franke (Austria), Novas Sealings (UK), Becker Paints (France), Maico Gulf (Germany). While the major non European companies that have an established presence in RAK include Ashok Leyland (India), POSCO (South Korea), Guardian Industries (USA), Mitsui (Japan) and Kempe Engineering (Australia), among others.
"RAKIA also strictly implements an investor-friendly policy wherein we always see to it that we are always able to cater to the needs and requirements of investors. From the outset, we make sure that investors will not have a hard time setting up their businesses and acquiring licenses in the emirate. This has been achieved by implementing easy licensing procedures, a single-window clearance for approvals and permits, and issuance of visit and residence visa under one roof," says Dr. Massaad.
RAKIA also offers a full range of business incentives to investors, which are designed to maximise their investment potential. Among several other investment incentives, investors in RAK benefit from 100 per cent income and corporate tax exemptions; 100 per cent capital and profit repatriation; 100 per cent ownership in free zones; no foreign exchange control; avoidance of double taxation with many countries; and absence of restrictions on hiring of expatriates. Moreover, all goods produced in Ras Al Khaimah enjoy a duty exemption in the Gulf Cooperation Council (GCC) countries.
Another key attribute that has made RAK a popular investment destination is its highly strategic location, which sits at the crossroads of business traffic between the east and the west. The emirate's centralised location, coupled with its advanced air, land and sea transportation facilities, has made it an ideal hub for investors and businesses that cater to markets across the Middle East, Europe, CIS, Africa, the Indian subcontinent and the rest of Asia.
Despite the success it has achieved in such a short span of time, RAK refuses to rest on its laurels. In fact, the entire emirate is abuzz with activity, mainly development projects for road networks, hotels, telecommunications facilities, integrated development projects, utility infrastructure, leisure and recreational amenities, accommodation complexes, business facilities and transport facilities. According to Dr. Massaad, RAKIA has already invested over AED 40 billion for various development projects, even as several more projects are now in the pipeline.
"We are very pleased with the initial success in our efforts towards realising our long-term goals, but we also know that there is plenty more that we can achieve. Through hard work, dedication and the all-out support of the government, we are confident that we are in the right path towards achieving our vision of establishing Ras Al Khaimah as one of the world's premier investment and lifestyle destinations," concludes Dr. Massaad.
The relentless efforts of RAKIA over the years to transform Ras Al Khaimah into an investment destination of choice have contributed to the many accolades that the emirate has been honoured with, including the fDI Magazine award which recognised Ras Al Khaimah as the Middle East’s most attractive city for foreign direct investment.