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Offshore Company in RAK zone UAE + Bank account help

Bena

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Jun 19, 2021
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Hey everyone, a friend of mine currently sells items on Amazon and eBay, I have been speaking with a company in the UAE that have suggested I open a RAK Company with the cost for company formation and bank account opening assistance at approximately £1,800 and then a yearly fee of £1000, the purpose of the company will be to purchase wholesale items from China and sell them to my friend at a higher cost for them to resell in the UK, does this seem ok and feasible? Would there be any issue in doing this? And also I was reading that I would need to have a trading history to be able to open a bank account, does anyone know if this is the case? Or if there are other ways this would be possible? For example opening an offshore bank account for the company in a different country, also if anyone had any experience or suggestions as to which bank accounts are good, my main priorities would be a bank account with a debit card that I can withdraw GBP from in the UK with without extortionate fees and also spend without having to pay very high fees, any help is greatly appreciated! Many thanks
 
You can contact RAK ICC on the official mail - however don't be confused if they mention you as official recommendation for international banks:

- Eqi Bank - Dominica
- Standard Int. Bank - Puerto Rico

This shows you already how far you are at the bottom of the barrel with RAK ICC.

For EMI's you can always check with ultra high risk ones in Lithuania like Wallter - they are charging you straight % for incoming and outgoing transactions up to 5% for incoming transactions so if they don't accept you with there you are left alone as no other EMI is willing to onboard you by charging nothing.

For the local UAE banks you can always give ADIB a try - bit they require you to have an EID and being UAE resident not since yesterday and you already have other UAE Business since more then 2 years of experience to prove you are serious entrepreneur, Min. Balance is 500k AED and prepare yourself for 3-6 months account opening time or being put in loopholes forever.

Long story short - RAK ICC is a very difficult topic and pretty much dead when it comes to banking options.

Spend some 1000$ more and get yourself a Dubai Freezone Company that grants you the Residence Visa. We are already in a stage were this setup is "not impossible but hard" to get banking.

Hopefully I could point out some things about the RAK ICC Banking topic and less people burning money on a company registration that never gets any reliable banking.
 
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So you don't believe it would be worth starting a RAK offshore company? The companies I have spoken to say there are many options when it comes to bank accounts but I am worried about what you have said, do you know if you can have any online banks for a RAK zone company such as TransferWise or similar? So that I can receive money and withdraw cash in the UK without having to pay ridiculous fees?
 
Hello I am not sure if this setup will work. It might be that UAE company can only be the owner of the goods once proper custom clearence is done and only afterwards it can sell them to UK company. So in practice goods would need to be transported to UAE custom clearence done and only then to UK so its additional shipping cost and legal fees. With physical goods it's not that easy maybe I am wrong but you should do your due dilligence
 
So you don't believe it would be worth starting a RAK offshore company? The companies I have spoken to say there are many options when it comes to bank accounts but I am worried about what you have said, do you know if you can have any online banks for a RAK zone company such as TransferWise or similar? So that I can receive money and withdraw cash in the UK without having to pay ridiculous fees?
Yes you worry for a reason and it's unbelievable that there are still agents around promoting the RAK ICC Bank Account opening for new companies in 2021 without having a Residence Visa in the UAE.

The main reason why UAE got blacklisted in 2019 was due to exactly this non-resident Banking setup.

During the year 2018 was CRS reporting introduced in the UAE and OECD realized that it will be impossible for UAE to report all the non-resident accounts from one day to another and because of this they put additional pressure on the UAE by blacklisting them.

UAE got rid of the blacklisting within few months - very quick - but this had a reason - all banks did shut down over night a lot of non-resident Bank Accounts no matter if Offshore Company or Freezone Company but the Freezone Company accounts had at least some grace period to get a Residence Visa before they get shut down.

So RAK ICC were working very well with local UAE Banks till CRS comes in place 2018 and there was no technical possibility to get a Residence Visa through the RAK ICC Company.

Thousands of accounts got shut down - mainly from Western clients as the pressure was coming from this direction.

We know only from some developing country citizen like from Pakistan that still have with RAK ICC a local UAE non-resident Bank Account with a Pakistan Bank with local UAE presence they open from Pakistan remote. In this case either UAE or Pakistan don't care. Still this banks have correspondence bank issues in USD - huge problems:


There are still banks that claim to open for RAK ICC so we did a test and called them after we were provided with dedicated banker details by RAK ICC and literally all bankers checked first thing if we are Residence Holder. We declined and the interest of the banker disappeared immediately.

So if you really want to incorporate a RAK ICC you maybe have a 1-2% to get local UAE Banking without Residence Visa - starting from bringing min. 1m$ with you.

Nearly all EMI did stopped onboarding RAK ICC including TransferWise that isn't working any longer in the UAE at all.

So the only EMI that comes in mind is Payoneer and even they decrease the risk appetite each month right now as they become a public traded company.

And if Payoneer opens for you they will open for a Seychelles Company as well you get at 1/3 the costs of the RAK ICC.

RAK ICC is nowadays used from UAE Residents as Holding and Investment Company and they get all served by the banks that already serve there trading Freezone Companies - so the due diligence of the funds is easy as they basically already sit within the bank. And even in this case it takes 3-6 months to open the RAK ICC account as the license itself is considered high risk.

Hope that helps and points out the full overview about the local UAE Banking possibilities for RAK ICC without holding a UAE Residence Visa.
 
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So you don't believe it would be worth starting a RAK offshore company? The companies I have spoken to say there are many options when it comes to bank accounts but I am worried about what you have said, do you know if you can have any online banks for a RAK zone company such as TransferWise or similar? So that I can receive money and withdraw cash in the UK without having to pay ridiculous fees
Yes you worry for a reason and it's unbelievable that there are still agents around promoting the RAK ICC Bank Account opening for new companies in 2021 without having a Residence Visa in the UAE.

The main reason why UAE got blacklisted in 2019 was due to exactly this non-resident Banking setup.

During the year 2018 was CRS reporting introduced in the UAE and OECD realized that it will be impossible for UAE to report all the non-resident accounts from one day to another and because of this they put additional pressure on the UAE by blacklisting them.

UAE got rid of the blacklisting within few months - very quick - but this had a reason - all banks did shut down over night a lot of non-resident Bank Accounts no matter if Offshore Company or Freezone Company but the Freezone Company accounts had at least some grace period to get a Residence Visa before they get shut down.

So RAK ICC were working very well with local UAE Banks till CRS comes in place 2018 and there was no technical possibility to get a Residence Visa through the RAK ICC Company.

Thousands of accounts got shut down - mainly from Western clients as the pressure was coming from this direction.

We know only from some developing country citizen like from Pakistan that still have with RAK ICC a local UAE non-resident Bank Account with a Pakistan Bank with local UAE presence they open from Pakistan remote. In this case either UAE or Pakistan don't care. Still this banks have correspondence bank issues in USD - huge problems:


There are still banks that claim to open for RAK ICC so we did a test and called them after we were provided with dedicated banker details by RAK ICC and literally all bankers checked first thing if we are Residence Holder. We declined and the interest of the banker disappeared immediately.

So if you really want to incorporate a RAK ICC you maybe have a 1-2% to get local UAE Banking without Residence Visa - starting from bringing min. 1m$ with you.

Nearly all EMI did stopped onboarding RAK ICC including TransferWise that isn't working any longer in the UAE at all.

So the only EMI that comes in mind is Payoneer and even they decrease the risk appetite each month right now as they become a public traded company.

And if Payoneer opens for you they will open for a Seychelles Company as well you get at 1/3 the costs of the RAK ICC.

RAK ICC is nowadays used from UAE Residents as Holding and Investment Company and they get all served by the banks that already serve there trading Freezone Companies - so the due diligence of the funds is easy as they basically already sit within the bank. And even in this case it takes 3-6 months to open the RAK ICC account as the license itself is considered high risk.

Hope that helps and points out the full overview about the local UAE Banking possibilities for RAK ICC without holding a UAE Residence Visa.
Thank you for your responses that was very insightful, what do you think would be the best option for me? I am looking for an offshore setup where there is 0% tax, it can be anywhere in the world, but I need to be able to open a reliable bank account that I can use in GBP and have access to withdraw money from the debit card within the UK without having to pay more than %2-3 fees, I appreciate your help! Thank you
 
Just to add a quick note, I have found that Satchel (former Satchelpay) has opened the account without too much trouble -though they required a high enough fee for opening.

Payoneer did as well, but maybe I don't quite understand it -does it basically work like you can't get any wire transfer in USD or EUR outside USA or EU?
 
So you don't believe it would be worth starting a RAK offshore company? The companies I have spoken to say there are many options when it comes to bank accounts but I am worried about what you have said, do you know if you can have any online banks for a RAK zone company such as TransferWise or similar? So that I can receive money and withdraw cash in the UK without having to pay ridiculous fees
Yes - that's it.

If you go with a local UAE Bank you can only go with a small Egypt or Pakistan Bank with local UAE Branch and they will ask you depending on your Citizenship something like 100.000 - 1.000.000$ to maintain on the account. Just parking this cash or even locking it in a Term Deposit fopr no reson so your incorporation cost won't be 1800$ but 100k$+ if you consider the banking part.

Basically what you are looking for is a non-CRS Bank Account. This requires a Freezone Company Setup that comes with a Residence Visa. Technical you wont get reported but of course for UK it's not legit if you keep spending the whole year there.

It's up to your personal risk appetite but if you go a higher risk road you should choose at least an reliable setup.

Thank you for your responses that was very insightful, what do you think would be the best option for me? I am looking for an offshore setup where there is 0% tax, it can be anywhere in the world, but I need to be able to open a reliable bank account that I can use in GBP and have access to withdraw money from the debit card within the UK without having to pay more than %2-3 fees, I appreciate your help! Thank you
Payoneer.

They are very limited in the options and will most likely shutdown your account if you receive money from 3rd party business. They are basically only fine with payments from PayPal, Stripe, Amazon and some other Marketplace especially if we are talking about medium 5 figures or 6 figures of incoming flows.

They have 5kGBP daily ATM withdraw limit but again they will shut you down very quick if they see that your only purpose is to funnel money to withdraw it at the ATM without any economic substance.

Additional they are going public tradet so expect that there risk appetite will decrease further.

Just to add a quick note, I have found that Satchel (former Satchelpay) has opened the account without too much trouble -though they required a high enough fee for opening.

Yes there are some Lithuania EMI around charging you a high risk fee like Satchel or Wallter.

But they won't give you a debit card or only a debit card with very limited ATM withdraw limits.

My advice: re-think the whole structure and you plans and if you want to continue your plans go at least with a Freezone Company that grants you the Residence Visa and offers you access to local UAE Banks otherwise you relay on some EMI and there Goodwill of non-reporting. Every Lithuania EMI that has your passport on file will report you. There are some that verify you with Emirates ID only but again this requires you have a Residence Visa.

Non-CRS high ATM withdraws can only be faciliated with real physical banks in the long run.

Again don't forget about your risk by keep living in the UK.
 
Hello everyone!
Fred, elaine, what you discussed is highly relevant for my situation too, so thank you for your exchange. Since the last posts are quite recent I would like to ask a follow up question without starting new thread.

I noticed you mentioning above, that some EMI's will most likely block my account if I receive a 3rd party payment. Say, I have the following setup:

1) I am Not Dubai resident, paying all taxes in my home country; I have a local company there which happen to own some internally developed and registered software;
2) I plan to setup RAK offshore + EMI (everyone seem to be ok with 1 and 2);
3) Once done, I will transfer IP (software) from my local company to my RAK offshore;
4) RAK offshore then starts receiving payments from Appstore/Google Play;
5) RAK offshore pays back to my local company for RND / software development (no thin capitalisation or transfer pricing mingling involver, honest market rates);
6) Double Taxation Avoidance Treaty between UAE and Local country of my residence is in place.

I suspect from what I have read above, that return RND payments might look suspicious to the EMI provider. Any chance this will work?

This will not result in any tax saving for me, since my home country requires to report international income and pay taxes in full whenever I pay dividends or salary, but this seems to be a more reliable option to relocate IP vs owning it in my (unreliable to that extent) home jurisdiction.

Freezone company is unfortunately not an option, as it carries too much extra cost (and comes with benefits I will not be using).
 
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