x Abu Dhabi, UAESunday 21 January 2018

RAK provides cheaper home to companies

Business is booming at the Ras Al Khaimah Free Trade Zone, the emirate's trade hub, with greater numbers of companies rushing to set up shop - with video.

Companies looking for a cheap base in the UAE are moving to establish operations in the Ras Al Khaimah Free Trade Zone.

The zone registered 522 new companies in the first quarter of this year, an increase of 17 per cent on the same period last year.

The majority of companies came from India, followed by the UK, Egypt and Pakistan.

The increased interest in the RAK Free Trade Zone comes as the UAE Government increases spending in the Northern Emirates to try to bolster economic growth outside Abu Dhabi and Dubai. The Government recently announced an infrastructure spending package for the region worth Dh5.7 billion (US$1.55bn).

"Our open-door economic development policy has gone a long way towards gaining investor confidence from across the globe, as is evident from both the new registrations and the renewals," said Oussama el Omari, the chief executive of RAK Free Trade Zone.

More than 5,000 companies are now registered in the zone.

"Increasing numbers of companies is always a good thing," said Mark McFarland, an economist at Emirates NBD. "The arrival of extra capital is going to be crucial for the long term.

"At this juncture, where the market has been facing considerable headwinds, any increase in investment is going to be a good thing."

However, he added greater numbers of companies registering could be the result of some businesses looking to reduce their costs by relocating to the free zone in the face of commercial difficulties.

Nick Levitt, the head of commercial banking in the UAE at HSBC, which recently signed an agreement to support business activities in the RAK Free Trade Zone, said the zone had been successful in attracting a diverse array of foreign direct investment.

"You've got flows coming from Europe, India and China, which are strategic areas of growth for us at HSBC."

He said about 15 to 20 per cent of the companies in the UAE were located in free zones, with the vast majority operating from the RAK Free Trade Zone, Jebel Ali Free Zone or Hamriyah Free Trade Zone in Sharjah.