The United Arab Emirates (UAE) has long been recognised as one of the most attractive destinations for entrepreneurs and investors seeking a business-friendly environment. In recent years, however, the implementation of a federal corporate tax regime has made it more important than ever for businesses to understand how and where they operate in order to maximise their financial efficiency. This is where the concept of Designated Zones plays a critical role. Among the various free zones in the UAE, Ras Al Khaimah Economic Zone (RAKEZ) stands out for its commitment to offering strategic, cost-effective and tax-efficient solutions, particularly through its Designated Zone offerings.
A Designated Zone is not just any free zone. Officially recognised by the UAE Cabinet and the Federal Tax Authority, these zones meet strict criteria in terms of infrastructure, customs controls and operational security. They are typically fenced and equipped with specialised facilities to manage the movement of goods, ensuring compliance with customs and VAT rules. The key distinction lies in their tax treatment. While the UAE introduced Value Added Tax (VAT) and Corporate Tax (CT) in recent years, not all free zones offer tax exemptions under these frameworks. Only 21 out of more than 40 free zones in the country qualify as Designated Zones, making their status both exclusive and advantageous.
RAKEZ is home to three officially designated zones, offering diverse options for businesses to thrive. These zones are equipped with: ● Coworking spaces for startups and remote businesses ● Offices and executive spaces for service providers and SMEs ● Warehouses and land for development for industrial and logistics firms RAKEZ also boasts highly competitive pricing, with business set-up packages starting from as low as AED 16,550 per year, which includes one UAE residence visa. This combination of affordability and high functionality makes RAKEZ a leading choice for entrepreneurs looking to optimise their operational base.
Perhaps the most compelling reason to consider RAKEZ’s Designated Zone is its 0% corporate tax rate on qualifying income. This applies to specific qualifying activities, which include: ● Distribution and logistics management ● Physical handling and movement of goods ● Warehousing, inventory control and supply chain management ● Goods processing and resale operations Additionally, companies operating within these zones are often eligible for VAT exemptions on goods imported and exported through the designated infrastructure, further reducing operational costs and improving cash flow.
RAKEZ’s Designated Zones are particularly beneficial for: ● Import-export businesses: With direct access to key ports and streamlined customs procedures, import-export firms can significantly reduce transit times and overhead costs. The 0% corporate tax on qualifying income further improves profit margins, particularly for companies engaged in high-volume trade. ● Logistics and distribution companies: For businesses managing the storage, handling and movement of goods, RAKEZ’s infrastructure, such as temperature-controlled warehouses and secure distribution centres, ensures seamless supply chain operations. These companies also benefit from the zone’s classification as a designated customs area, which allows goods to move in and out with minimal tax implications. ● Manufacturing and warehousing firms: Businesses involved in light manufacturing or needing extensive warehousing facilities benefit from RAKEZ’s ready-to-use industrial zones and land for development. The ability to conduct qualifying activities like assembly, packaging and goods handling in a Designated Zone means these companies enjoy tax relief while maintaining full control over production and inventory. ● Startups and SMEs: Smaller businesses looking to scale operations without heavy overheads find RAKEZ’s cost-effective set-up packages and tax incentives highly attractive. The Designated Zone status ensures that startups involved in eligible activities can reinvest more of their profits into growth, while enjoying simplified licensing, visa services and business support.
While tax relief is a major attraction, RAKEZ’s Designated Zones offer many more advantages that contribute to long-term business success: ● Strategic location: Proximity to five key seaports, including Saqr Port, the largest bulk-handling port in the Middle East ● Logistics connectivity: Excellent road networks and access to Ras Al Khaimah International Airport ● Efficient set-up processes: Fast-track licensing and registration via RAKEZ’s digital Portal 360 ● Secure and compliant infrastructure: Fenced zones with customs clearance capabilities These features make RAKEZ not only a cost-effective option but also a highly secure and scalable base for regional and international operations.
The UAE’s evolving tax landscape means businesses must now be more strategic in their choice of location. Operating within a Designated Zone, such as those offered by RAKEZ, can be the difference between paying corporate tax and enjoying a 0% rate on qualifying income. With its certified Designated Zones, cost-effective set-up packages and robust infrastructure, RAKEZ emerges as a top choice for SMEs, logistics companies and international traders looking to establish a resilient, tax-efficient business in the UAE. Looking to make the most of the UAE’s tax-friendly policies? Explore RAKEZ’s Designated Zone packages and take the next step in securing your business's success.
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