Strategic use of RAK company structures for business, investment & wealth planning

All RAK entities fall into one of two categories. Before choosing a structure, it is important to understand this foundational distinction.

These entities receive a commercial, professional, industrial, or service license and are legally permitted to conduct business activities. They can issue invoices, hire employees, lease office space, and operate in the UAE.

A RAK ICC entity is a registered legal structure created to hold assets, manage investments, or structure ownership. RAK ICC entities do not receive licenses and cannot conduct commercial operations inside the UAE.

Once this distinction between operating and structuring is clear, the RAK ecosystem becomes far easier to navigate.

RAKEZ is a free zone established to support active commercial operations, including trading, manufacturing, services, education, logistics, and digital businesses.

A Free Zone Establishment is a single-shareholder company and is the most common structure for solo founders.

An FZE can conduct trading, consulting, manufacturing, industrial activities, e-commerce, or services depending on the license issued. It offers limited liability, 100% ownership, and a straightforward compliance framework. Many businesses begin as an FZE and later convert to a multi-shareholder structure as they scale.

Best suited for: Solo founders, consultants, owner-operated businesses, early-stage startups.

A Free Zone Company is similar to an FZE but allows between 2-50 shareholders.

An FZC is commonly used by partnerships, co-founded startups, family businesses, and investor-backed companies. It supports the same range of licensed activities as an FZE while offering clearer governance and shareholding structures.

Best suited for: Partnerships, funded startups, family enterprises, scalable businesses.

A freelancer permit is not a company.

It is an individual professional license issued to a person rather than a legal entity. It is suitable for consultants, designers, developers, trainers, and independent professionals operating in their personal capacity. However, it is not designed for businesses that plan to scale, hire teams, or raise capital.

Best suited for: Independent professionals and small personal practices.

A license defines what the company is legally allowed to do, not the legal structure itself.

RAKEZ issues several license categories, including:

• Commercial license – Import, export, wholesale, and trading activities

• Industrial or manufacturing license – Production, assembly, and factory operations

• Logistics and storage license – Warehousing, transportation, and distribution

• Industrial + service license – Manufacturing combined with installation or maintenance

• Educational license – Schools, training institutes, and online education platforms

• Service or media license – Consulting, IT services, marketing, and professional services

• Service and e-commerce license – Digital platforms, marketplaces, and online businesses

These licenses apply only to operating companies, not to any RAK ICC entity.

A RAK ICC entity is not designed to carry out day-to-day commercial operations. Instead, it functions as a legal vehicle for ownership, investment holding, and long-term structuring.

Unlike licensed operating companies in RAKEZ or the mainland, RAK ICC entities are registered, not licensed. This means a RAK ICC entity cannot trade in the UAE, issue invoices, hire employees, or lease operational office space. Its purpose is structural, not operational.

In practice, a RAK ICC entity is most commonly used as a holding company. It may sit above one or more operating businesses, whether in RAKEZ, the UAE mainland, or overseas, owning shares while the licensed entities conduct the actual business activities.

This separation helps founders and investors isolate operational risk from asset ownership.

From an investment perspective, a RAK ICC entity is frequently used to hold:

• Shares in operating companies or startups

• Portfolio investments across multiple jurisdictions

• Intellectual property and licensing rights

• Specific assets through SPVs or structured arrangements

For families and high-net-worth individuals, RAK ICC entities are central to wealth planning and succession structuring. Foundations, SPVs, and segregated portfolio companies allow ownership to be preserved, assets to be protected, and control to be maintained across generations without mixing personal wealth with active business risk.

These objectives are addressed through a range of RAK ICC entity types, each serving a distinct structuring function. Let's explore some entities.

An International Business Company is the most common type of RAK ICC entity.

It is used to hold overseas subsidiaries, own intellectual property, manage international investments, and conduct business outside the UAE. An IBC cannot trade locally or lease office space in the UAE.

Typically used by: Global founders, international investors, IP holding structures.

A Special Purpose Vehicle is a RAK ICC entity created for one clearly defined objective.

It is often used to hold a single asset such as shares, real estate, or a specific investment. SPVs are widely used in venture capital, private equity, and structured finance to isolate risk.

Typically used by: Investors, holding companies, structured transactions.

An SPC allows multiple portfolios to exist under one legal entity, with each portfolio legally segregated from the others.

This structure is commonly used by investment funds and family offices managing multiple asset pools.

Liability is limited to the value of shares held.

This RAK ICC entity structure is useful where ownership clarity, shareholder rights, and share transferability are important.

This structure has no shareholders, only members who guarantee a fixed amount.

It is commonly used for non-profit organisations, associations, and purpose-driven entities where profit distribution is not allowed.

A foundation is a RAK ICC entity with no owners or shareholders.

It is widely used for wealth protection, succession planning, and long-term asset control, particularly by high-net-worth families seeking to separate ownership from control.

An RPC can only carry out the activity defined at incorporation.

It is typically used in securitization, structured finance, and transactions requiring strict legal ring-fencing.

An unlimited company places no cap on member liability.

While uncommon, it is sometimes used in bespoke family or private investment structures where privacy and control are prioritised.

A re-domiciled company is a foreign company that transfers its legal domicile to RAK ICC.

This allows the company to retain its history and contracts while operating under UAE jurisdiction.

No. A RAK ICC entity cannot directly operate in a free zone or mainland UAE. However, it can own 100% of a RAKEZ company or a mainland LLC.

This holding-company structure is extremely common, where the RAK ICC entity acts as the parent company and the licensed entity conducts the business.

• If your objective is to actively run a business, issue invoices, hire staff, and operate in the UAE, you need a licensed operating company such as an FZE, FZC, or mainland LLC.

• If your objective is to hold assets, manage investments, protect wealth, or structure ownership, you need a RAK ICC entity such as an IBC, SPV, or Foundation.

Most mistakes occur when these two purposes are mixed.

Nearly every issue we see in Ras Al Khaimah traces back to choosing the wrong structure for the wrong objective.

At Kitaab, we work with founders, investors, and families to design compliant, future-ready RAK structures that align licensing, ownership, tax, and long-term goals from the start so corrections aren’t needed later.

As a registered agent with RAK ICC, we are authorized to incorporate and administer RAK ICC entities, including IBCs, SPVs, Foundations, and other specialized structures. This allows us to advise not just strategically, but also to execute structures correctly within the RAK regulatory framework.