How to buy a ready-made company in RAKEZ

It can be simpler and faster to buy a ready-made company in RAKEZ (Ras Al Khaimah Economic Zone) than to incorporate a new business. The buyer acquires an existing legal entity; a valid licence means some formalities are already complete. Before proceeding, however, the buyer needs to assess whether that licence covers the intended activities, which documents need updating, and whether any debts or other liabilities remain. I recommend always starting with these checks to anticipate costs and prevent problems under the new ownership.

What is RAKEZ?

RAKEZ is based in Ras Al Khaimah, an emirate of the UAE, and took shape in 2017, when the Ras Al Khaimah Free Trade Zone and the RAK Investment Authority were combined into a single body. Companies in the zone work across more than 50 sectors, a range that runs from consultancy and trade to industrial production.

The zone's own figures put its register at more than 50,000 companies, drawn from over 100 countries. For buyers considering a company for sale in the UAE, the infrastructure is designed for varied needs: a workstation or an office can be leased, and manufacturing and logistics projects have warehouses and industrial plots at their disposal.

What comes with a ready-made company in RAKEZ?

Purchasing a ready-made company in RAKEZ gives the buyer ownership of an incorporated entity and its corporate documents. Any valid licence it holds must be checked for compatibility with the intended business.

The offer may include leased offices or warehousing, employee visas already in place, a bank account and other assets. The buyer should ask the seller which of these assets or arrangements will be available after completion and on what terms.

Buying an existing company or incorporating a new one

For entrepreneurs deciding whether to buy a business in the UAE or incorporate a new company, I advise weighing the two options against anticipated expenditure and the scale of the changes required. With a new incorporation, the entrepreneur decides on the business activities and forms the company to match their own plans. There is no need to investigate a former owner's decisions, or check for debts and other problems from earlier operations. The entrepreneur must, however, handle registration, licensing and documentation independently from the outset.

If the existing licence is suitable and the documents are in order, the buyer saves time on registration. If the activities need changing alongside other substantial amendments, buying an existing RAKEZ company will cost more and be less advantageous than incorporating a new entity.

Matters to investigate before purchase

A company for sale in the UAE may still owe money to suppliers, have RAKEZ fees outstanding or remain bound by contracts concluded under its previous owner. Some contracts survive the sale.

I recommend examining corporate records, payments and outstanding balances with counterparties, and the licence terms before proceeding. A trading licence, for example, may not cover the consultancy services the buyer intends to provide. The buyer should also establish whether the licence can be amended, what paperwork is needed and what the amendment will cost.

Everything the seller promises to transfer with the company also warrants examination, whether an office or warehouse, a bank account or employee visas. The buyer needs to verify that all supporting records are in order and that the ownership change will not prevent continued use of these assets. Documents may need updating, and the lease or banking terms may have to be agreed again.

How to buy a ready-made company in RAKEZ

To buy a ready-made company in RAKEZ, a purchaser first settles the price, payment arrangements and other deal terms with the seller. I advise reviewing the records before signing to identify debts or other issues that could hinder the business after the transfer.

RAKEZ's procedure requires an application accompanied by the relevant documents. The incoming owner's status determines the paperwork: a passport copy, a share transfer resolution and further documents may be needed. A corporate purchaser has a more extensive file to submit.

Following its review of the documents, RAKEZ draws up the amendments for both parties to sign. At completion, the buyer receives the revised corporate records and licence. RAKEZ's indicative timescale is 8–10 working days for a free zone transfer; the procedure outside the free zone may be longer.

Further approvals may be necessary when an office, warehouse or plot of land forms part of the purchase. I recommend identifying which visa, lease and bank records need updating after the ownership transfer.

Documents required for the change of ownership

For the purchase of a ready-made company in RAKEZ, the required documents differ between an individual and a corporate shareholder. An individual must provide:

• a copy of their passport;
• copies of the Emirates ID card and residence visa, where these exist;
• a letter in which the incoming owner consents to admission as a shareholder;
• the current shareholders' resolution authorising the transfer.

An incoming shareholder residing in the UAE on an employment or dependant visa may need a no-objection certificate (NOC) from the current sponsor. RAKEZ may seek more documents case by case.

• a certificate of registration or a commercial register extract;
• the buying company's valid licence;
• constitutional documents, including any amendments;
• a resolution recording the company's approval of the acquisition and its appointment of a representative;
• particulars of the ultimate beneficial owners (UBOs), including copies of their passports;
• a chart tracing the ownership chain to those UBOs.

Foreign company documents require notarisation and legalisation; attestation requirements for UAE companies may differ.

Where the company holds a warehouse or land, further documents will be needed: RAKEZ may request approval from the relevant authority or from customs, or from the bank if the property is mortgaged.

Before purchase, the checklist is best verified against RAKEZ's current requirements for the company's legal form and shareholders.

Operational checks following the transfer

For investors who buy a company in RAKEZ, I recommend reviewing four matters after the transfer, as they determine how the company can operate from then on:

• Licensing. If operations continue as before, updating the registration details may suffice. A new line of business may call for an amended licence or an added activity.
• Visas. Where the company holds visas for its owner or staff, two points need checking: whether those visas remain valid, and whether any records must be updated after the change of owner or manager. The acquisition by itself does not secure a visa for the new owner.
• Leased premises. If an office or warehouse is included in the deal, the lease agreement has to be reviewed to confirm whether it must be reissued.
• Banking. A change of owner may require the bank's records to be updated and the company's documents to be checked again. It is for the bank to determine what information to request and whether the account can remain in use without additional procedures.

What a ready-made company in RAKEZ costs

There is no uniform price for a ready-made company in RAKEZ. Sellers may ask more where the company comes with a suitable licence, a current lease and visas already issued. A high price, however, is no sign of a sound purchase: the first step is to establish what the deal includes and which costs will arise after it.

RAKEZ currently charges 4,000 UAE dirhams (AED) for a free zone shareholder change, on top of the company price. This covers preliminary approval and amendment of the immigration file. Where the Chamber of Commerce certificate has to be amended, an e-channel registered or other steps taken, additional fees are payable. Separate fees apply outside the free zone.

Some costs are not always visible while the price is being discussed. If the licence or lease is close to expiry, its renewal has to be paid for separately. Amendments to activities, visa paperwork or bank details may add to the expense.

Before purchasing, the buyer should request an offer from the seller stating the company price and every known transaction cost. The buyer also needs to check for unpaid RAKEZ fees, rent and other debts, and establish the next licence renewal date. These details provide a basis for comparing the acquisition with a new registration.

Tax liabilities and yearly running costs

For anyone planning to buy a business in the UAE, I recommend reviewing the company's tax obligations, licence and registration papers after acquisition. The federal corporate tax in force across the UAE extends to companies registered in free zones as well.

Taxable profit beyond the first AED 375,000 is charged at the standard rate of 9%. Access to a 0% rate is governed by the company's activities, the nature of its income and its observance of the conditions for operating in the free zone.

I advise establishing the tax position before purchase. The checks cover corporate tax registration, submission of required returns and any overdue payments. Operations under the former owner may already have created a duty to report to the tax authorities.

Even without profits, the company must keep its licence valid, pay registration renewal fees and meet financial reporting rules. RAKEZ obliges every company registered within its jurisdiction to prepare and file audited accounts each year, and only auditors approved by RAKEZ may carry out that audit. Filing after the deadline attracts fines.

Assessing a company offered for sale

A decision to buy a company in RAKEZ should rest on more than its price and incorporation date. Even a long-established company may hold a licence unsuitable for the intended activities.

Some offers cover only the company and its licence; others extend to premises leases or current visas. The seller should provide a written list of everything included so buyers can compare offers like for like.

The company's condition and the incoming owner's plans determine what needs changing. A licence covering the intended activities need not be amended. Otherwise, the buyer should ask RAKEZ in advance about the time and cost involved.

The reason for sale and operating history merit investigation through financial statements, fee payment records and current contracts. A seller's refusal to provide basic records, or a demand for payment before checks are complete, is grounds to defer the purchase.

The agreement should specify the price, payment arrangements, documents to be delivered and each party's actions if completion is delayed or fails. For a business with assets or a complex ownership structure, the documents are best reviewed before payment by a lawyer familiar with RAKEZ.

Conclusion

A RAKEZ acquisition requires examination of the corporate records, operating history, licence and any obligations left by the former owner. Otherwise, the new owner may face extra costs and difficulties running the business.

I assist clients seeking to buy a ready-made company in RAKEZ by checking the business beforehand, explaining the transaction terms and preparing the ownership transfer documents. I can also evaluate a specific offer, identify potential risks and explain the expenditure likely after acquisition.