What is the difference between RAKIA Free Zones and Industrial Zones?
RAKIA free zones and industrial zones mainly differ in legal shareholding and ownership pattern in formation of companies and incentives offered. There are mainly two types of entities, namely, companies in RAK Free Zones and in Industrial zones. In free zones, businesses, by local or foreign individual or a corporate body, can form single shareholder limited liability company commonly known as free zone establishment (FZE) or with two to five shareholders known as free zone companies (FZC). 100% ownership by foreign company is allowed in free zone. Entities in free zones can also sell products within UAE through distributor or agent licensed in UAE. But for such sales, a tax up to @5% is levied. Whereas, foreign companies in the industrial zones require to form companies (LLCs) with local partners with minimum @51% equity. However, there are provisions to pass on the equity to foreign entity to make it a 100% foreign ownership company, particularly to protect the interest of the minor
