Wednesday, August 19, 2009

ITCN Asia 2009 Showcase: Ras Al Khaimah Free Trade Zone Authority (UAE)

Luca Gorlero, Marketing & Business Generation Director at the Ras al Khaimah Free Trade Zone Authority, UAE (RAK FTZA) was much pleased to have his company first time in Pakistan through the ITCN Asia 2009. In an interview during the event, he said that Pakistani investors have great opportunity to invest in the Ras Al Khaimah Free Trade Zone under a secure and developed environment with the maximum profit opportunities.

He said that Pakistan is land of opportunities and potential, its business people are considered important figures all over the world while at the RAK FTZ we are here to provide them overall facilities from getting a business/trade license to set up a company to other related services to boost their business. He said we are here directly without any promoter in Pakistan to interact B2B coordination with potential investors.

Luca Gorlero briefed us regarding doing business opportunities in the RAK FTZ by narrating the following salient features:

Ras Al Khaimah emirate is one of the seven emirates forming the UAE federation. It is the northernmost emirate, located approximately 100 kilometers north-east from Dubai to which it is connected by the dual-carriage Emirates Road, a coastal highway, and by a number of small single-carriage roads. Its neighbors are the emirates of Fujairah and Umm al Quwain (plus it has a very short border with the Sharjah emirate in the desert interior) and with the Musandam peninsula enclave of the Sultanate of Oman. Ras Al Khaimah is the part of the UAE which is geographically closest to Iran. The Bandar Abbas port in Iran is only 100 kilometres (60 miles) from Ras Al Khaimah´s Mina Saqr Port.

Ras Al Khaimah ranks among the smaller emirates of the UAE federation but it has always had an important position: in the past it was a centre of traditional shipbuilding and maritime commerce, more recently as a centre of quarrying, manufacturing and tourism. Since 2003, the government of the emirate has been pursuing the policy of diversification of the economy, industrialization and promotion of tourism, investment into education and public health and by investment into public utilities.

With a renewed drive for development over the past few years, Ras Al Khaimah has been pursuing the goal of becoming a serious investment destination. In a few years the emirate could become one of the top tourist draws in the Gulf thanks to its varied landscape which includes both the coast and the sand dune areas and the mountainous regions with pleasant wadis in the Hajar Mountains.

Basic data on Ras Al Khaimah

Area 2,478 km² (650 sq miles)
Population 250,000 (estimate)
GDP 11,124 million AED (2006)
Per-capita GDP 46,407 AED (2005)
Import 4,284,000,000 AED (2006)
Export 3,646,000,000 AED (2006)
Re-export 2,450,000,000 AED (2006)

Government and Politics: Ras Al Khaimah joined the UAE federation in 1972 as the last of the seven emirates. The ruler of the emirate, Sheikh Saqr bin Mohammed Al Qasimi, has been in power since 1948. Since 2002, most of the day-to-day political and economic operations are carried out by the crown prince and deputy ruler, Sheikh Saud bin Saqr Al Qasimi.

Local government departments in Ras Al Khaimah include:

* Emiri Court
* Law Court
* Land Department
* Municipality Department
* Public Works and Services Department
* Economic Department
* General Accounts Department
* Ras Al Khaimah Oil and Gas Commission
* Ports and Customs Department
* Civil Aviation Department
* Information and Tourism Department
* Ras Al Khaimah Broadcasting Corporation
* Antiques and Museums Department

Ras Al Khaimah´s economy is not based on oil as it has only small oil reserves. Its gas reserves are more important but revenues from gas are also of a lesser importance than in other emirates and the emirate has had to look beyond its borders to fulfill its demand for gas. As the emirate will never be a major oil producer, RAK has instead had to concentrate on developing its industrial sector.

The Emirate is rich with raw materials such as limestone, clay, quartz and other minerals. Ras Al Khaimah is unique in the Gulf region as it has a high concentration of leading industrial units which process these natural resources and manufacture various types of cement, clinker, ceramics and other building materials. It opened the UAE’s first cement company in the early 1970s and is now the UAE’s largest producer of cement. RAK also boasts the largest rock quarry in the Gulf region.

In the 1980s, the emirate formed RAK Ceramics, which has become the world’s largest ceramics producer, and Julphar, the Gulf region’s first pharmaceuticals company. As the first pharmaceutical and medical supplies manufacturer in the Gulf region, Gulf Pharmaceuticals (also known as Julphar) has developed into a global brand and now sells its products, which meet the rigorous US Food and Drug Administration and European Commission guidelines, to almost 50 countries.

Since the 1980, other advanced manufacturing companies have set up operations in Ras Al Khaimah, including companies producing glass, CD and DVD discs, air-conditioning equipment, machinery parts, metal products and others. The total number of industrial companies registered in Ras La Khaimah exceeded 100 in 2006.

More traditional industries, such as fishing and agriculture, continue to play an important role in RAK’s economy. In 1955, the first agricultural research centre in the UAE was established there, and since then, innovative methods of arid zone cultivation have made the emirate one of the leading agricultural producers in the UAE. Ras AL Khaimah is well known for its dairy and poultry products, eggs, fodder and animal meat. In addition to this, the fertile plains in the south-east produce fruits and vegetables for the local UAE market.

Tourism is becoming one of the major industries in the emirate with several large tourism projects at various stages of completion. Natural topographical features of Ras Al Khaimah include about 65 kilometres of sandy beaches, mountains which reach almost up to 2,000 metres, gravel plains and sand dunes.

Ras Al Khaimah is emerging as a viable investment alternative with increasingly large numbers of firms choosing to locate their operations there rather than in already well-established but increasingly overcrowded parts of the UAE. The costs of living and doing business in Ras Al Khaimah are markedly lower than in Dubai, for example, while the distance of less than 100 kilometres between Ras Al Khaimah and Dubai can be covered in less than one hour. This enables companies to take advantage of being very close to Dubai but avoiding any negative impacts brought by the high growth there.

Under the guidance of the Crown Prince H.H Sheikh Saud Bin Saqr Al Qasimi, the RAK government has embraced the concept of free enterprise as a vehicle for progress and development. The government is proactive in its approach for attracting foreign investments by creating an incentive based environment and a suitable climate for investment in Ras Al Khaimah. The Emirate registered a GDP growth of 18.1 per cent in 2005 and 9.2 per cent in 2006.

Ras Al Khaimah offers excellent investment opportunities in diverse ever-growing economic areas. The following sectors offer attractive investment opportunities:

Manufacturing: The emirate derives its economic importance from the abundant raw materials which have made the emirate the main producer of cement, building materials, quarries, and ceramics. More recently, companies from other parts of the manufacturing sector have invested in Ras Al Khaimah: pharmaceuticals, electronics, automotive industry, metalworking and machinery, as well as food processing. It is estimated that the costs of setting up a factory in Ras Al Khaimah are about 20 per cent lower compared to other destinations due to lower prices of land, better logistics, no taxes and low customs duties and reduced overheads or costs incurred in bureaucratic delays. Ras Al Khaimah allows investors to save time to complete a project from zero date to a fully operating factory in around 6 to 12 months. These factors, coupled with lower living costs, competitive freight costs and easy access to the rest of the UAE, have created an optimal environment for manufacturing industries to set up their UAE business operations in Ras Al Khaimah.

Logistics / Warehousing: Proximity and excellent road connections to the fast-growing but congested markets in Dubai have made Ras Al Khaimah and ideal location for logistics and warehousing for both the UAE and the GCC markets.

Ras Al Khaimah has a state-of-the-art container terminal in Mina saqr Port and one of the best bulk handling ports in the region in Al Jazeera. The emirate is also developing smaller ports in Ras Al Khaimah and Al Jeer to serve regional traffic and complement the above large ports. Expansion plans for the Ras Al Khaimah Airport and the launch of RAK Airways in late 2007 have boosted the logistics infrastructure of the emirate tremendously. Growing space limitations and lacking infrastructure in major logistics hubs near large ports have encouraged logistics companies to look for alternative locations and Ras Al Khaimah is one of them.

The Service Sector: The service sector in Ras Al Khaimah is still less developed than in Dubai and thus offers many opportunities. The main advantage of the emirate, however, is its proximity to Dubai which allows RAK-based companies to provide services to this fast-growing global business hotspot very cost-effectively due to the lower costs of living and doing business in Ras Al Khaimah.

Tourism: Ras Al Khaimah has tremendous potential in the tourism sector. Its unique natural resources including hot mineral springs, mountains, sand dunes and picturesque locations and greenery provide attractive investment opportunities. The Ras Al Khaimah government has adopted a tourism master plan that embraces a number of large-scale developments, including luxury hotels, residential complexes, an offshore island and the redevelopment of the creek area. The plan also includes the development of a mountain complex – Jebel Jais Mountain Resort – complete with a five-star hotel, luxurious residential units, a snow slope and a climbing and abseiling centre. Some AED 5 billion (USD 1.4 billion) is being spent on building luxurious four- and five-star hotels along the seafront and more money is expected to be invested in developing the mountain areas. The tourism master plan also includes the promotion of Ras Al Khaimah’s heritage sites. It is estimated that by 2010, Ras Al Khaimah will have at least 25 hotels and will be visited by 2 million tourists annually.

Real Estate: The main attractions of the real estate market in Ras Al Khaimah include underdeveloped local market for residential and commercial properties, proximity to Dubai, lower costs of living in Ras Al Khaimah and diversified landscape offering both nice beaches and mountainous areas for leisure activities. Attractiveness of investment opportunities in the real estate sectors has prompted many foreign investors to investing in Ras Al Khaimah. Hamburg (Germany) based property investment fund Arabian Opportunities 2 announced recently that it will invest USD 377 million in real estate in Ras Al Khaimah, for example. In November 2005 the RAK government issued a decree permitting expatriates to enjoy freehold ownership of property developed in selected developments in Ras Al Khaimah. The legislation was preceded by a grant of 4.6 million square metres of strategically located land to RAK Properties public joint stock company to be used in various real estate projects. Major schemes underway in the emirate include the Mina Al Arab complex which will contain numerous hotels, 25,000 accommodation units, shops and a theme park, Julfar Towers, a residential and commercial development in the centre of the Ras Al Khaimah city and Mangrove Islands, a low-rise residential and commercial building development. A community area complete with a golf club, 2000 luxury villas, schools and shopping malls is also being planned for an area on Emirates Road and will be completed in 2009. Another major project under way is Al Hamra Village, an 1800-unit residential complex with a shopping mall and two hotels, one of which will be of seven-star standard. The five-star Al Hamra Fort Hotel and Beach Resort, already established in the area, will be part of the complex, along with the brand new Al Hamra Palace Hotel. There are several other large and smaller projects in various stages of planning and development.

Offshore Companies: The government of Ras Al Khaimah has launched an offshore facility, the second in the UAE, which is expected to attract investors looking for a new tax haven. The International Companies Registry allows foreign investors to register offshore companies in the Ras Al Khaimah Free Trade Zone (RAK FTZ) without the need to establish a physical presence in the UAE. Ras Al Khaimah offshore scheme provides some distinct advantages like the provision of "bearer shares" under which an entity may decide not to disclose the owner's identity. In such cases, the shareholder's identity is known only to the appointed agent. However, the government may ask the shareholder's identity if required in cases such as bad transactions. (For more info, contact this blogger)

Luca Gorlero appreciated this mega event by saying that the ITCN Asia 2009 provided them a great showcase to market their services to the local clients that is why such events should be continued.


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