While the UAE is a booming economy with emirates like Dubai being on the forefront, the much smaller Ras Al Khaimah emirate is becoming a new haven for investors.
We’ve seen significant growth of RAK’s tourism sector, manufacturing industries, and solid political administration. These are just the right conditions that welcome a thriving economy that investors look for.
So why is RAK making headlines in the UAE, why are more investors eyeing it as the next investment haven, and what is the RAK government doing in preparation for the investment boom? We’ll try to get all the answers in this short post.
- An Already Exploding Tourism Sector
Intending to hit 23 million tourists by 2025, RAK has focused on strengthening its tourism sector. As a result, more tourists are doing away with their usual route to Dubai whenever they plan a visit to the country.
The plan that began with establishing the RAK Tourism Development Authority has made significant steps so far. This was made possible, thanks to the financing from both internal and external investors.
During the May 2021 Arabian Travel Market, the Emirate’s Tourism Authority (RAKTDA) announced an investment plan of AED 500 million to cover over 20 sustainable projects.
A few of the projects planned for include:
- Earth hotel altitude.
- New mountain retreat.
- The first highlander experience in the GCC in November this year.
- Fixed hot air balloon base at the Jebel Jais destination.
- Wadi Track at Wadi Showka.
- New Mountain retreat in Saij.
If that’s not enough, RAK’s keynote speaker Ivor Ambrose, at this year’s Annual World Day Celebration, made a bold claim that they’re one of the most committed members of the European Network for Accessible Tourism (ENAT).
He went on to say that their next move is to make Ras Al Khaimah an accessible tourism destination for tourists from all over the world.
- Low Property Pricing
As a ready-to-invest destination, RAK has kept property prices attractive for investors that want to get into real estate. But the authorities regulate property pricing so that both parties can win.
For example, landlords charge around $700 on rent per month, while one-bedroom flats sell for about $90,000. This clearly shows that RAK properties are very affordable, giving investors a chance to make a good profit when they add assets to their properties.
The director of Clittons, Richard Paul, said that RAK is getting international investors because of the high gross yields. For this reason, the price increases significantly while coming off a low, relatively low base.
- RAK Tax-Free Zone
The emirate has the most favorable taxation system for investors. Like Dubai, RAK is a tax-free emirate, meaning investors are exempted from paying some taxes. Such exemptions include:
- zero corporate tax
- zero income ta
- zero sales tax
- zero wealth tax
While investors may be exempted from these taxes, shareholders are required to report to the authorities of their countries to pay the taxes as required.
RAK companies do not impose tax salaries on foreign employees and do not levy social insurances.
In addition to the tax exemptions, RAK offers more like 100 percent repatriation of profits and capital, no foreign exchange controls, 100 percent availability of utilities, and finally, a residency VISA for homeowners in partnership with the RAKEZ.
- Stable economy and Political Atmosphere
The first thing investors look at in a country is its ability to pay off its debts. If the government has strong financial performance, it has a stable economy giving investors a great environment to do business.
According to the RAK media office, RAK’s GDP reached $9.5 billion in 2016 and grew between 5% – 7% between 2011 and 2016. If we use the exact figures, RAKs GDP could be oscillating around $13 billion in 2021. This is far much bigger than the GDP of individual states of Idaho or Hawaii in the USA.
When it comes to the political atmosphere, RAK has a strong administration by the current ruler, his highness, Sheikh Saud bin Saqr Al Qasimi. As a result, the Emirate has a peaceful environment that spearheaded investment opportunities.
The UAE has had the most significant foreign direct investment since 1970. The inflows from the USA alone in the last four years were over 10 billion per year.
And the country knows how to share its resources. While RAK has benefited from this relationship, we all agree that the projects it has put in place will make it the most sought-after emirate by investors.