European companies enduring high rents are the latest target for Ras al Khaimah which hopes to lure them to the UAE.
RAK aims to draw European firms with free zones
Ras al Khaimah hopes to lure European companies to the UAE by marketing the emirate's cheaper rents, says the head of the Ras al Khaimah Investment Authority (RAKIA).
RAKIA looks after the emirate's three investment zones and in its five years of operations has attracted more than US$3 billion (Dh11.01bn) in foreign investment.
"We are targeting companies that do not have the same profitability [in Europe]," said Dr Khater Massaad, the chief executive of RAKIA, said yesterday.
He said the investment group was in talks with firms including a food processing company and a toothpaste and shampoo manufacturer.
"A lot of companies are interested in this part of the world because we're in the middle of a big emerging market," Dr Massaad said.
While the majority of free trade zones in the region offer similar benefits, including 100 per cent foreign ownership, zero customs duty and no income tax or corporate tax, RAK hopes to lure new companies by offering low rents and "light touch" regulation. Rents can be as low as Dh10 per square metre per year.
RAK is emerging as a competitor to more established business centres in the region, including the Jebel Ali Free Zone (Jafza).
Jafza is the UAE's oldest free trade zone, handling 11 million cargo containers each month and contributing about 25 per cent to Dubai's GDP. It has attracted more than 6,400 companies and in the past four years increased its revenue at an average 34 per cent annually. RAK has enjoyed similar success at its Marine free trade zone, which caters to the maritime industry. Saqr Port is the major Middle East port for bulk cargoes, aggregates, oil and cereals.
Capt Colin Crookshank, the general manager and harbour master of Saqr Port Authority, said the port had enjoyed a "big increase in delegations" from Europe.
"[They are] becoming increasingly interested in investing in RAK [because of the] cheaper rates of land, the tax-free element as is seen for RAKIA and, obviously, cheaper labour," Capt Crookshank said.