Finding the economic substance test tough? 4 reasons to redomicile to RAK ICC
Date Posted: Thu, 09 Sep, 2021
Right now many companies are wondering if they should move or stay. Would they be better off in another jurisdiction? This is especially the case given the recent impact on businesses from both COVID-19 and the need to meet the challenges laid down by new Economic Substance Regulations (ESR).
RAK ICC has much to offer companies considering redomiciling. From being a ‘whitelisted’ jurisdiction, providing all the relevant infrastructure, and offering low redomiciliation fees, here are four great benefits.
1. The UAE is whitelisted
In February 2020, the ECOFIN adopted a revised EU blacklist of jurisdictions who were non-cooperative in terms of tax. Some well-known and fairly high profile jurisdictions have been added, including Cayman Islands, Panama and the Seychelles. This means they are at risk of sanctions from the EU and its member states, in addition to the reputational impact.
The UAE has worked hard to make detailed changes to laws for setting up and running International Business Companies and it now sits on the whitelist, and remains committed to helping companies meet these regulations.
2. RAK ICC can offer appropriate infrastructure and resources
Many jurisdictions, especially the smaller island ones, simply don’t have a deep enough pool of resources to allow companies to meet their ESRs. By this we mean they don’t have the physical office space required, nor the capacity in terms of personnel (such as consultants and advisors) that are critical to helping a business maintain an adequate economic presence.
To meet ESR in the UAE, entities must demonstrate that they meet the following:
Adequate physical assets, expenditure and employees exist in the UAE
Core income generating activities (CIGA) undertaken in the UAE
Directed and managed in the UAE
The UAE provides plenty of physical offices or premises that are appropriate for your CIGAs. In addition to this there is a large pool of experienced employees to chose from.
3. RAK ICC offers more than one solution
Of course every business is different. What is ‘adequate’ for one company, may not be for another. What is ‘appropriate’ or ‘reasonable’ varies depending on company size and nature of its activities. This means that a jurisdiction needs to find multiple solutions so it can effectively assist each individual business.
RAK ICC is at the forefront of International Business Company licencing in the region. There are three solutions to meet ESR for a company looking to redomicile:
Outsource its CIGAs – this can be done as long as the activities are performed in the UAE, giving access to employees and premises in the country.
Use the Premium product – this allows the licensee to enjoy the best of both worlds, by establishing with RAK ICC first and then the RAKEZ freezone
Form a Branch – by starting a branch in the RAKEZ free zone, this would be treated as the same legal entity
4. RAK ICC keeps it simple and cost effective
For a company looking to redomicile, not everything is about meeting Economic Substance. There is a need to keep things as straight forward as possible. If the move to another jurisdiction feels more complicated than trying to meet ESRs, if it takes too long or leaves you feeling like you’re starting all over again, you would be forgiven for thinking there is little point in making the jump at all.
Redomiciling in RAK ICC makes it worth the jump. RAK ICC has built an effective back-office process that enables large volumes of redomiciliations to be processed quickly. Not only does this offer the perfect solution to meeting your company’s ESR needs, but it comes with other major advantages as well. Companies can redomicile while maintaining their existing legal status, and maintaining operational and banking history. RAK ICC companies follow the common law regulations and can have access to both common and local law courts. International Business Companies can be migrated to RAK ICC through their registered agents who have a wealth of experience in advising companies on formation, reporting and running AGMs and can assist them to meet their ESR.
And it can be done for limited expense with further discounts for bulk redomiciliation.
The time to redomicile is now
Meeting ESR will be challenging for every business. Yet these four key reasons to redomicile to the RAK ICC show why it is perfectly placed to help all types of business. RAK ICC has all the capacity, all the solutions, and all the legality and the simplicity you will need to meet your tests of Economic Substance.
If you are looking to redomicile here please keep in mind that businesses in the UAE have until 30th June this year to file an ESR notification. To discuss redomiciling to RAK ICC, please get in touch on +971 7 207 7177, or email email@example.com.