Ras al Khaimah Free Trade Zone expects to receive an increasing flood of new company registrations this year as it appeals to fast-growing small businesses from overseas.
RAK in race to entice business
Ras al Khaimah (RAK) Free Trade Zone expects to receive an increasing flood of new company registrations this year as it appeals to fast-growing small businesses from overseas. The number of new applications by companies to set up within the zone is forecast to rise by 18 per cent to about 2,000 this year compared with last year.
"Hopefully this year it will be 2,500 but with the economic situation, around 2,000 is more realistic," Oussama el Omari, the chief executive of RAK Free Trade Zone, said yesterday. "We are fitting to small and medium-sized businesses [SMEs], offering them lots of goodies, an attractive package and a good technology platform." With the global financial crisis sapping business demand, the zone received 1,700 applications last year, down from about 2,000 in 2008.
More than 4,000 companies already operate from the zone, which is scattered across four different sites in the emirate and spans 1,000 hectares in total. The zone includes business, technology and industrial parks as well as an aviation maintenance and repair park under development near RAK International Airport. Although competition among UAE free zones is fierce, RAK is trying to carve its niche within the small and medium-sized business segment, luring smaller export-oriented companies from Asia, the rest of the GCC and Europe that may not be able to afford to establish within Dubai or Abu Dhabi zones.
It hopes to attract international businesses through its overseas offices in New York, Germany, India and Turkey, in addition to Dubai and Abu Dhabi, where companies can register to join the zone and gain business advice. RAK is scouting for another office to open in China. It offers companies the ability to base themselves from their home countries, while maintaining a "flexi-office" in the zone that they can share with another company and use when they visit the emirate.
Over its 10-year history, the zone has played a part in attracting global investment to RAK and establishing the emirate as a regional industrial centre for cement, ceramics, pharmaceuticals, quarrying and steel. Now, however, the zone is keen to stimulate the service sector. "We see there is an extreme need for service companies like engineering, courier and logistics, as when you attract large companies you need smaller service companies," said Mr el Omari.
For many years, free trade zones have enticed foreign businesses to the UAE, offering complete foreign ownership, a tax-free business environment and full capital and profit repatriation. "The UAE free zone is a model that can be emulated by other countries around the world," said Graham Mather, the chairman of the World Free Zone Convention, the London-based organiser of free zone events. "The regime in RAK focused on SMEs makes sense as that is where I expect the growth will be in the coming years."
With companies increasingly preoccupied by the need to reduce logistics costs after the global financial crisis, Mr Mather said he expected demand for space within zones to remain strong. It was announced yesterday that the RAK zone would host the World Free Zone Convention in November, the first of its kind in the Middle East. @Email:firstname.lastname@example.org