Ras Al Khaimah Free Trade Zone: In the zone – Peter Fort

Ras Al Khaimah Free Trade Zone provides investment-friendly advantages for European companies to expand into the Middle East. Peter Fort, RAK FTZ CEO, discusses all the benefits the zone has to offer existing and new businesses.

Springing forth from its traditional economic base as a hub of industrial manufacturing, Ras Al Khaimah (RAK) has emerged as a world-class investment destination where companies from numerous sectors are taking advantage of the business-friendly investment atmosphere, substantially lower costs and completely tax-free environment that the emirate offers.

RAK is one of the seven emirates that comprise the United Arab Emirates (UAE), which includes Dubai and Abu Dhabi. Less than an hour's drive from Dubai, RAK offers a strategic geographical location that provides easy access to fast-growing global markets across the Middle East, Africa and South Asia, as well as Europe. In addition to freedom from taxes, companies that operate in RAK benefit from the ability to source labour and materials globally, fast-tracked visas and licensing, and ongoing business support.

Over the past 14 years, Ras Al Khaimah Free Trade Zone (RAK FTZ) has become the investment destination of choice for more than 7,500 companies from more than 100 countries, representing more than 50 industry sectors. Importantly, RAK FTZ provides the same free zone benefits - including no taxes at all on a permanent basis, 100% foreign ownership and world-class, ready-made facilities - that are available elsewhere in the UAE, but at substantially lower costs than free zones in other emirates, allowing clients to achieve the maximum return on their investment.

"RAK FTZ is the perfect home for European investors that are looking to expand their operations into the Middle East," said Peter Fort, RAK FTZ CEO. "We offer the most cost-effective and flexible business solutions in the region, along with a nurturing and politically stable investment environment, as affirmed by Fitch's A rating for the emirate. Not only does RAK FTZ offer top-notch facilities, award-winning service and ongoing business set-up support to meet the needs of each individual company, all free of taxation, it also does so at a lower cost than its competitors, allowing companies to make higher profits."

Good investment

PGS Group, the French and Belgian-based global manufacturer of wooden pallets, was well aware of these advantages when it announced in early 2014 that it had expanded operations into the Middle East by setting up a subsidiary in RAK FTZ.

"We selected RAK FTZ to set up PGS Middle East FZE because it is ideally located less than an hour's drive from Dubai and between North Africa, Europe, the Middle East and South Asia, giving us easy access to trade flows between East and West, as well as close interaction with our current clients, and an opportunity to attract more clients," said Michael Modugno, vice-president and founder of the PGS Group. "By choosing to operate in a free zone that provides less expensive warehouse space but with the same quality as others in the region, with workers' accommodation on site and a full range of business support services, all free of taxation, we have assured ourselves of strong potential for development in the coming years."

PGS is not the only European company with investments in RAK FTZ. Knauf, a leading manufacturer of building materials, decided to expand its operations from its base in Germany to RAK in 2007.

"Placement is of utmost importance in certain businesses, and us being in RAK FTZ means strategic positioning with access to our business markets," said Amer Bin Ahmed, managing director of Knauf RAK. "Moreover, we benefit from the extraordinary support provided by the free zone - from establishing the company and building the huge plant to the continuous and consistent services."

Italfood FZC is a fresh-cheese manufacturing company that also operates in RAK FTZ. The company was founded in Italy, and produces cheese according to Italian culture and technology, using daily fresh milk from local farms in the UAE. The company was supplying mozzarella cheese in Italy for more than 50 years before setting up shop in RAK FTZ in 2010. The company plans to expand from its 9,000ft2 warehouse facility in the free zone.

Expansion plans

As Italfood and other European companies in RAK FTZ plan to expand, the free zone is expanding right along with them.

"To accommodate the rising demand for our award-winning services and world-class facilities, we are constructing 100 new warehouses in our Technology Park for clients doing business in trading and light manufacturing, and the first set of 33 new warehouses will be available in November," Fort said. "We also plan to build a new office tower in the Business Park that will accommodate more than 700 new clients. As we continue to grow rapidly, attracting top companies from emerging and developed markets around the world, the additional world-class offices and quality warehouses are needed to accommodate them."

To help find the right fit for every client, RAK FTZ has developed four specialised free-zone parks, tailored to meet the specific needs of entrepreneurs.

The Business Park is for office clients, the Technology Park is for trading and light manufacturing, the Industrial Park is for heavy manufacturing and the Academic Zone is for educational institutions, all catering to the unique requirements of small, medium and large businesses across a multitude of business sectors.

"We have been recognised by our clients and third parties such as Financial Times' fDi Intelligence as one of the fastest, most effective and hassle-free free zones in the UAE. We welcome virtually all business activities, including light industrial, heavy industrial, value-added distribution and trading, logistics, services and educational institutions," Fort says.

No business like FTZ business

Some of the specific business clusters at RAK FTZ include vehicle assembly and customisation, food and beverage processing, oil and gas equipment manufacturing, electronics and industrial products assembly, marketing and management consulting, universities and branch campuses, and more.

RAK FTZ is particularly keen on attracting European investors. To make it easier for European companies to set up shop in RAK FTZ, the free zone has set up a promotional office in Germany where investors can receive information on how to set up a business in the free zone as well as fast, high-quality service. The office processes registrations and provides administrative services and assistance, including everything from VIP delegations to visa arrangements. RAK FTZ is also conducting seminars in Spain and Italy to share its numerous business set-up advantages with investors.

The free zone's marketing efforts are clearly paying dividends. The rising interest from companies that want to set up in RAK FTZ is evident in the fact that the free zone's new-client registrations increased in 2013 by nearly 30% on the previous year. In order to fulfil the vision of His Highness Sheikh Saud Bin Saqr Al Qasimi, the Ruler of RAK, to diversify the emirate's economy, the free-zone plans to expand its focus on investors to include sectors beyond its historical core strength in manufacturing. These include educational institutions and back-office services such as IT, HR, accounting, document processing, order fulfilment and call-centre support, according to Fort.

RAK is not only an excellent place to do business, Fort says, but also provides a high standard of living. There is a state-of-the-art telecommunications infrastructure, multiple options for high-quality education for children, and luxurious seaside villas and flats with amazing views. Significantly, all of these benefits come with much lower costs than they do in other parts of the UAE.

"RAK is a wonderful place to live, with high-quality, affordable housing - all the facilities that expats would need (including five shopping malls), and plenty of family-focused activities," Fort says. "Additionally, there is no traffic congestion, no stress and a very high quality of life. It's the difference between living in Manhattan and living in Connecticut in the US. Some people prefer the former, but others are much happier in a suburban setting like RAK."

Peter Fort, RAK FTZ CEO.
New-client registrations have increased for RAK FTZ.
RAK FTZ has four unique parks.