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Table of Contents
What RAKEZ is and why manufacturers choose Ras Al Khaimah
RAKEZ industrial zones: Al Ghail, Al Hamra, Al Hulaila
RAKEZ industrial licence and company structures
Warehouse, industrial unit and land options
Step-by-step factory setup process in RAKEZ
Documents required for a manufacturing company
Corporate tax, VAT and compliance obligations
Importing machinery and raw materials: customs and CEPA
Visa quotas, staffing and labour accommodation
Cost items and budget planning
RAKEZ compared with other industrial free zones
Mistakes investors make most often
Sources
RAKEZ (Ras Al Khaimah Economic Zone) is the economic zone authority of Ras Al Khaimah, the northern emirate of the United Arab Emirates. It sits roughly 85–110 km from Dubai by road, about 1.5 hours; Dubai International Airport is 85 km away and Sharjah 60 km. According to the authority's own figures it hosts more than 50,000 companies across over 50 sectors and licenses in excess of 3,000 business activities.
What separates Ras Al Khaimah from Dubai for a manufacturer is the cost of land and warehousing, combined with infrastructure built specifically around industry. Saqr Port handles over 100 million tonnes of cargo a year and ranks among the largest bulk-handling ports in the region, while RAK Maritime City offers 8 million m² of coastland and 5 km of quay wall for heavy industry. The industrial zones are planned around uninterrupted government-supplied power, gas and water.
Output from a Ras Al Khaimah plant can move into the GCC customs union towards Saudi Arabia and Oman, or by sea towards the Indian subcontinent and East Africa. When you weigh free zone alternatives across the UAE, calculate logistics separately from rent rather than folding both into one number.
RAKEZ is made up of six zones: three industrial (Al Ghail, Al Hamra, Al Hulaila), two business zones (Al Nakheel, Al Hamra) and an academic zone. A factory can only be established in an industrial zone; the business zones serve office and trading activities.
| Industrial zone | Distinguishing feature | Typical use |
|---|---|---|
| Al Ghail | Large plots reserved for heavy industry, set away from residential areas | Building materials, petrochemicals, metalwork |
| Al Hamra | On-site labour accommodation and ready-built warehouse stock | Food, packaging, light manufacturing, assembly |
| Al Hulaila | Proximity to Saqr Port and RAK Maritime City | Export-led production, bulk cargo, marine supply |
All three industrial zones carry Designated Zone status for VAT purposes under Cabinet Decision No. 43 of 2019. The business zones do not, and that distinction carries consequences on both the VAT and the corporate tax side.
Production requires an industrial licence. A commercial licence permits buying and selling raw materials; only an industrial licence grants the right to transform those materials into a new product. RAKEZ also issues commercial, general trading, e-commerce, service, media, educational, professional and individual licences plus a freelancer permit, each available in free zone and non-free zone form.
| Structure | Shareholders | Ownership and market access |
|---|---|---|
| FZ-LLC / FZE (free zone) | 1 – 50 | 100% foreign ownership, export and free-zone-to-free-zone sales |
| Non-free-zone LLC | 2 – 50 | Direct sales into the UAE domestic market, RAK DED rules apply |
| Branch | Tied to parent company | No separate capital requirement, activity limited to the parent |
Treat the fixed capital figures circulating online with caution. Regulation 32 of the RAKEZ Companies Regulations defines minimum issued share capital as «such sum as the Authority may specify from time to time»; no fixed AED amount is written into the regulations. The only binding number in the official registration form is that each share must have a par value of at least AED 1,000. Capital for an industrial licence is set at application stage according to the activity code and facility size, so ask RAKEZ to confirm it in writing.
If you are weighing the mainland instead, Federal Decree-Law No. 26 of 2020 removed the requirement for an Emirati shareholder in commercial companies, and most manufacturing activities are open to 100% foreign ownership. For a comparison, see how an industrial company is set up in Dubai.
No industrial licence is issued without a physical facility. A flexi desk or shared office is not a valid facility type for production; those products serve trading and consultancy licences.
| Facility | Size range | Best suited to |
|---|---|---|
| Ready-built warehouse | 150 m² – 10,000 m² | Assembly, packaging, light manufacturing, first-year pilot production |
| Industrial land | Plots from 5,000 m² | Investors building their own facility and installing heavy machinery |
| Labour accommodation | On-site lease or self-built | Shift-based production employing 20 or more blue-collar staff |
Settle two technical points before signing a lease: the connected power load in kW allocated to the unit, and the trade effluent discharge permit. For wet processes such as coating, food processing or chemicals, a standard warehouse shell is often inadequate and the fit-out cost outweighs any saving on rent.
| Step | What happens | Typical duration |
|---|---|---|
| 1 | Defining the activity code and the scope of the industrial licence | 1 – 3 days |
| 2 | Trade name reservation and initial approval | 2 – 5 days |
| 3 | Facility selection, lease agreement and confirmation of power load | 1 – 3 weeks |
| 4 | Company registration, constitutional documents and licence issue | 3 – 7 days |
| 5 | Environment, civil defence and municipality approvals; process flow diagram | 2 – 6 weeks |
| 6 | Corporate bank account and corporate tax registration | 2 – 6 weeks |
| 7 | Opening the visa quota, recruitment and machinery installation | 3 – 10 weeks |
An assembly operation starting in a ready-built warehouse usually settles into an 8–12 week timeline. An investor leasing land and constructing a building should plan for 12–18 months once design approval, construction and the completion certificate are accounted for.
The phrase «there is no tax in the UAE» stopped being accurate in 2023. Under Federal Decree-Law No. 47 of 2022, corporate tax applies to financial years beginning on or after 1 June 2023: 0% on taxable income up to AED 375,000 and 9% above that threshold.
A free zone company can apply 0% to its qualifying income. Ministerial Decision No. 229 of 2025 expressly lists «manufacturing of goods or materials» and «processing of goods or materials» as qualifying activities, so a RAKEZ factory falls inside the regime by its nature. The rate is not automatic; five conditions must all be satisfied:
Non-qualifying revenue must stay below the lower of 5% of total revenue or AED 5,000,000. Breaching the de minimis threshold costs the status not only for that period but for the following four tax periods. Under Ministerial Decision No. 84 of 2025, every Qualifying Free Zone Person must produce audited financial statements regardless of turnover – the obligation new factories overlook most frequently.
UAE entities within multinational groups whose ultimate parent reports consolidated revenue above EUR 750 million are subject to a 15% Domestic Minimum Top-up Tax for financial years beginning on or after 1 January 2025. This overrides the free zone 0% rate.
The standard VAT rate is 5%. Mandatory registration begins at AED 375,000 of taxable supplies and imports; voluntary registration at AED 187,500. Because Al Ghail, Al Hamra and Al Hulaila hold Designated Zone status, movements of goods between them can fall outside the scope of VAT under specific conditions; supplies of services do not benefit from that treatment.
On Economic Substance Regulations the burden has eased: Cabinet Decision No. 98 of 2024 lifted ESR reporting for financial years ending after 31 December 2022, though obligations for earlier periods remain. For corporate tax registration, juridical persons incorporated on or after 1 March 2024 have three months from incorporation, and late registration carries an AED 10,000 penalty. Our UAE tax consultancy team can map the compliance calendar for you.
The GCC common customs tariff is 5% on goods arriving from outside the customs union, with 417 tariff subheadings fully exempt and tobacco products taxed at 100%. Duty is suspended on goods entering a free zone and becomes payable only when the goods leave for the domestic market. Where finished output is re-exported outside the UAE, no duty arises.
The UAE's Comprehensive Economic Partnership Agreements matter to any manufacturer sourcing components abroad. The agreement with Türkiye entered into force on 1 September 2023 and covers more than 83% of tariff lines, equal to some 93% of trade value; the India agreement took effect on 1 May 2022 and the Indonesia agreement on 1 September 2023. Preferential rates depend on rules of origin: goods merely trans-shipped through a free zone do not qualify, and substantial transformation inside the UAE is required. That is the commercial argument for real production in RAKEZ, quite apart from tax.
Tables circulating online in the form of «flexi desk = 1 visa, office = 4 visas» are not drawn from RAKEZ publications. The authority does not publish a fixed quota per facility type; allocation is determined at application stage from the leased area in square metres, the activity and the organisation chart submitted. In industrial facilities the quota scales with warehouse or plot size. Have RAKEZ confirm your quota in writing before you build a hiring plan around it.
Labour accommodation is a separate budget line in shift-based production. Al Hamra industrial zone offers on-site accommodation, whereas at Al Ghail staff must be bussed in from nearby settlements – a recurring annual cost that is easy to underestimate. See our UAE work and residence visa page for permit procedures.
RAKEZ does not publish a public tariff schedule, so quoting a single «factory setup price» would mislead. Building the budget line by line is the sounder approach:
| Budget line | Nature | Note |
|---|---|---|
| Industrial licence and registration | Annual | Varies with the number of activities; obtain a written quotation |
| Facility rent (warehouse or land) | Annual, per m² | The single largest item in the budget |
| Fit-out, power connection, effluent | One-off | The item that deviates most in wet processes |
| Environment, civil defence and municipality approvals | One-off plus renewal | Additional testing and reporting costs by sector |
| Visas, health insurance, labour accommodation | Per person, annual | Grows quickly in blue-collar heavy operations |
| Audit, accounting and tax compliance | Annual | Audited statements are mandatory for QFZP status |
Put the corporate account on the same timeline; banks examine supplier and customer contracts closely for manufacturing companies. Starting the UAE corporate bank account process early keeps machinery shipments and payment schedules aligned.
| Zone | Strength | Point to watch |
|---|---|---|
| RAKEZ | Low land and warehouse cost, plots reserved for heavy industry | 1.5 hours from Dubai; sourcing senior white-collar staff needs planning |
| JAFZA | Integration with Jebel Ali Port, mature supplier base | Rent levels are markedly higher |
| Hamriyah and SAIF | Cost-to-logistics balance in Sharjah, broad industrial base | Plot availability in heavy industry tightens periodically |
| KEZAD | Large-scale industrial and energy infrastructure in Abu Dhabi | Entry threshold is high for smaller investors |
Rank the decision in this order: target market, logistics cost, facility rent, quota, infrastructure. Licence fees belong at the bottom, because across a ten-year manufacturing investment the licence is a small fraction of total cost. For the corporate structure itself, see our guide to RAK company formation.
Figures were compiled from official sources as at the date of publication. Fees, quotas and legislation change, so confirm current details with RAKEZ and the Federal Tax Authority before committing to an investment.
A manufacturing investment in Ras Al Khaimah begins with the right activity code and takes shape around the technical capacity of the facility. The World Company Setup team runs the industrial licence application, warehouse or land selection, environmental and civil defence approvals, corporate banking, visa quota and corporate tax registration on a single timeline. Request a free quote for a cost breakdown built around your project.
Once the target market, production capacity and the energy demand of your machinery are clear, the facility decision largely makes itself. A ready-built warehouse for first-year pilot production, followed by industrial land as volumes grow, is usually the most efficient sequence in Ras Al Khaimah. Read more about company formation in the UAE.
Production can only be carried out under an industrial licence. A commercial licence allows the buying and selling of raw materials but does not permit transforming them into a new product. If the activity code does not cover manufacturing, problems appear at customs during shipment, so confirm the scope with RAKEZ in writing before applying.
The largest budget line is facility rent, not the licence. Total cost depends on leased area in square metres, connected power load, effluent infrastructure, environmental and civil defence approvals, the number of visas and labour accommodation. RAKEZ does not publish a public tariff schedule, so a project-specific written quotation is essential.
The RAKEZ Companies Regulations do not fix a minimum issued share capital; they define it as the sum the Authority may specify from time to time. The only binding rule in the official registration form is that each share must carry a par value of at least AED 1,000. Fixed figures such as AED 10,000 circulating online have no official basis.
Yes, but customs duty becomes payable when the goods leave the free zone for the domestic market. The GCC common tariff on foreign goods is 5%. No duty arises where finished output is re-exported outside the UAE. Investors planning regular domestic sales should also assess a non-free-zone structure or a local distributor model.
Manufacturing and processing of goods are listed as qualifying activities under Ministerial Decision No. 229 of 2025. The 0% rate requires all five conditions: adequate substance in the free zone, qualifying income, no election into the standard regime, transfer pricing compliance and audited financial statements. Breaching any one of them moves the rate to 9%.
Duty is suspended on goods entering a free zone and arises only when they move into the UAE domestic market. Under the UAE's Comprehensive Economic Partnership Agreements, preferential tariffs may apply to imports from partner countries such as Türkiye, India and Indonesia, provided the rules of origin are satisfied.
RAKEZ does not publish a fixed quota per facility type. Allocation is decided at application stage from the leased area in square metres, the activity and the organisation chart submitted. In industrial facilities the quota scales with warehouse or plot size, so have the figure confirmed in writing before finalising a hiring plan.
Ready-built warehouses in the industrial zones range from 150 m² to 10,000 m², and industrial land is offered in plots starting at 5,000 m². Al Hamra provides on-site labour accommodation, Al Hulaila suits exporters through its proximity to Saqr Port, and Al Ghail is designed for heavy industrial investment.
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