A NEW INDUSTRIAL LANDSCAPE
Ras Al Khaimah consolidates its free zones under one brand with the hope of increasing foreign investment.
The Ras Al Khaimah Economic Zone (RAKEZ) was established in 2017 to oversee, regulate, and consolidate the Ras Al Khaimah Free Trade Zone (RAK FTZ) and the Ras Al Khaimah Investment Authority (RAKIA). As a result of this consolidation, RAKEZ became one of the largest economic zones in the region with over 13,000 companies—an impressive number not far off Dubai's 14,000-company-strong DMCC.
Like DMCC, RAKEZ offers advantages such as 100% foreign ownership, unrestricted repatriation of capital and profits, and 100% tax exemption. Yet it is substantially more cost effective to set up in RAKEZ compared to Dubai. In addition, RAKEZ offers investors a 10% reduction in setup costs and allows them to spread installments over 12 months. These efforts earned the economic zone an award for Set-Up Cost Reduction in the 2017 fDi Global Free Zones of the Year rankings.
RAKEZ consists of five economic zones, half of which are industrial zones that cater to manufacturing, industrial projects, trading, assembly, and logistics. In this way, the new entity is signaling its continued emphasis on the industrial sector.
A key driver of developing special economic zones is the diversification of economies. This is particularly important in the MENA region, which according to the World Bank suffered a sharp decline in growth, down from 5% in 2016 to just 1.7% in 2017 due to a slowdown in oil exports. Narrowing the scope, the UAE followed the trend and recorded growth of only 1.4%.
With contracting local demand from Dubai and Abu Dhabi, growth in Ras Al Khaimah similarly reduced in 2017. Still, rating agency S&P reports that the Emirate exceeded national numbers by achieving an estimated growth rate of 1.5% during the same year.
Looking to reverse this trajectory, countries across the region, and especially the GCC, are spreading their proverbial eggs across multiple sectors. The World Bank Global Economic Outlook for 2018 predicts that growth in the GCC will accelerate to 3% as a result of efforts to promote non-oil sector activity. Ras Al Khaimah has indeed set the benchmark for diversification, with 95.2% of the economy in the non-oil production sectors.
Under RAKEZ, the new drive has been to develop the distribution and trading services, information technology, healthcare, and logistics sectors in addition to the burgeoning tourism sector and the traditional core of industrial manufacturing. But it is still the industrial sector that remains the biggest contributor to Ras Al Khaimah's GDP, growing from 33.1% in 2015 to 36% in 2017.
Diversification through RAKEZ would be developed on top of the Emirate's strong industrial foundations. Efforts to increase non-oil-sector activity offer industrial sector players in RAKEZ access to growing local and external markets in an economy set for long-term growth. At the same time, it also provides the industrial sector with an opportunity to improve its slice of the GDP. Finally, lower costs and an ease of entry through RAKEZ offer smaller companies the opportunity to expand alongside the economy.
The UAE consists of an array of economic free zones competing for investment. Hopefully, the consolidation of RAK FTZ and RAKIA creates a stronger, more powerful brand with which to attract new industrial and other non-oil sector players.
Ras Al Khaimah has been growing quickly and has set itself up for further growth. RAKEZ spearheads this growth initiative and is part of a long-term vision for a more diverse economy that is well known on the global stage.
A NEW INDUSTRIAL LANDSCAPE
TABLE OF CONTENTS
Interview
ndrea Di Gregorio, , Director of Energy Efficiency and Renewables , RAK Municipality Department
TBY talks to Andrea Di Gregorio, Director of Energy Efficiency and Renewables of the RAK Municipality Department, on the Emirate's overall strategy, specific programs, and early supporters of energy efficiency and renewables.
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Abdulrhman Al Shayeb Al Naqbi, Director General, Ras Al Khaimah Department of Economic Development (RAK DED)
TBY talks to Abdulrhman Al Shayeb Al Naqbi, Director General of the Ras Al Khaimah Department of Economic Development (RAK DED), on improving the ease of doing business, key diversification pillars, and the impact of new VAT.
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Sheikh Ahmed bin Saqr Al Qasimi, Chairman, Ras Al Khaimah Economic Zone (RAKEZ)
TBY talks to Sheikh Ahmed bin Saqr Al Qasimi, Chairman of the Ras Al Khaimah Economic Zone (RAKEZ), on offering investors a global platform, creating a one-stop shop, and the strategic comparative advantages of access to the Indian Ocean.
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Manu Mehra, CFO, RAK Investment & Development Office (RAK IDO)
TBY talks to Manu Mehra, CFO of the RAK Investment & Development Office (RAK IDO), on the role of free zones in diversification, the benefits of smart state intervention, and the keys most needed for a strong manufacturing sector.
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Yousef Esmaeel, Chairman, Supreme Committee of Saud Bin Saqr Establishment for Youth Enterprises Development (RAK SME)
TBY talks to Yousef Esmaeel, Chairman of the Supreme Committee of Saud Bin Saqr Establishment for Youth Enterprises Development (RAK SME), on incentivizing young people, working with local government to encourage entrepreneurialism, and the role of SMEs in the UAE marketplace.
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Abdullah Al Abdooli, Managing Director, Al Marjan Island
TBY talks to Abdullah Al Abdooli, Managing Director of Al Marjan Island, on the continuous growth of the real estate market in RAK, its robust investment landscape, and the Emirate's ambitious plans to develop its tourism sector.
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Hassan Hamdan Al Alkim, President , American University of Ras Al Khaimah (AURAK)
TBY talks to Hassan Hamdan Al Alkim, President of the American University of Ras Al Khaimah (AURAK), on the consequences of growing global demand for education and AURAK's efforts to attract students from beyond the Emirate.
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Gurumadhva Rao, Vice Chancellor, RAK Medical & Health Sciences University (RAKMHSU)
TBY talks to S. Gurumadhva Rao, Vice Chancellor of the RAK Medical & Health Sciences University (RAKMHSU), on the further development of higher education, its key differentiators, and the need for qualified doctors.
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Taner Topcu, Director, Ras Al Khaimah Economic Zone’s (RAKEZ) Academic Zone
Taner Topcu holds a bachelor's degree in Public Administration from Anadolu University in Turkey. He is an industry expert with more than 20 years of successful experience in education, hospitality, business development, and customer relations. Prior to joining RAKEZ in 2015, Taner worked at TECOM Investment's Education Cluster in Dubai Knowledge Village and Dubai International Academic City, where he worked in operations, business development, and account management. He also worked at Aabar Investments in Abu Dhabi as a Business Development Manager and at Dubai's Knowledge and Human Development Authority as a Director of Engagement Operations.
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