Tourism Business in RAK ICC: Complete Guide

Investors are often told they can "set up their tourism business in RAK ICC". That advice is usually a misunderstanding of what the registry does. RAK ICC — the Ras Al Khaimah International Corporate Centre — registers international companies. It is a corporate registry, not a tourism regulator, and it does not issue the permit that lets anyone run a hotel, a restaurant, a tour desk or a travel agency inside the UAE.

That does not make RAK ICC useless to a tourism group. It makes it useful for something different: holding shares, holding intellectual property, and housing a joint venture between investors from different countries. This guide explains what a RAK ICC company can and cannot do in a hospitality structure, what obligations come with it, and where the operating licence has to come from instead.

What RAK ICC Registers, and What It Does Not

A RAK ICC company is incorporated under the registry's own company regulations rather than under the mainland Commercial Companies Law, Federal Decree-Law No. 32 of 2021. It gets a certificate of incorporation, a memorandum and articles, a registered agent and a registered office. It does not get a trade licence for activity in the UAE market.

Running a tourism business — taking bookings, hosting guests, selling tours, employing staff at a property — is licensed activity. The permission comes from the tourism or economic authority of the emirate where the operation actually sits, or from a free zone authority for activity conducted inside that zone. Operating on the strength of a RAK ICC certificate alone is unlicensed activity, and the fact that a certificate exists does not help if an inspector arrives.

The practical test is simple. If the entity will sign guest contracts, hold the property permit, employ the staff or take the payment, it needs an operating licence and RAK ICC is the wrong vehicle. If the entity will only own shares, receive dividends, license a brand or sit as a party to a shareholders' agreement, RAK ICC may be exactly right.

Where a RAK ICC Company Fits in a Hospitality Group

Three uses come up repeatedly and all of them are legitimate:

• Holding company. The RAK ICC entity owns the shares in the licensed operating companies, whether those are mainland or free zone entities, and consolidates the investors above the operating layer.
• Brand and intellectual property vehicle. The registry entity owns the marks, the booking platform and the operating manuals, and licenses them down to each operating company under a written licence.
• Joint venture vehicle. Where an investor group spans several countries, a single holding company with one shareholders' agreement is easier to govern than parallel shareholdings in each operating entity.

In each case the licensed activity stays below the holding company, in an entity that the relevant authority has actually approved to trade.

Ownership at the Operating Level

One reason investors reach for an offshore registry is the belief that mainland ownership is still restricted. It generally is not. The requirement for 51% UAE-national ownership of mainland limited liability companies was removed by Federal Decree-Law No. 26 of 2020, and most mainland activities are now open to full foreign ownership, subject to the strategic-impact list and to conditions the licensing authority may attach to a particular activity.

A branch of a foreign company is a separate matter. A branch is not its own legal person, the parent carries its liabilities, and it operates through a local service agent — a lawful arrangement that gives the agent no share of the business. Deciding between a subsidiary and a branch is worth doing before any lease or management agreement is signed, because changing the answer later means redoing the licensing.

The Obligations That Come With the Structure

A registry company is light to run, not free of obligation.

Registered agent and records. The company must maintain a registered agent and registered office and keep its statutory records, register of shareholders, register of directors and beneficial ownership information current. Registries act on filing failures, and a company that has fallen out of good standing cannot reliably transfer shares, open accounts or complete a sale.

Corporate tax. A company incorporated at RAK ICC is a UAE juridical person and sits within the scope of Federal Decree-Law No. 47 of 2022, which applies to financial years starting on or after 1 June 2023, with 0% on taxable income up to AED 375,000 and 9% above that. Any adviser who tells you a registry company is automatically outside the tax net is wrong. Whether a particular holding structure has taxable income, and how it is treated, is a question to answer before incorporation, not after the first return is due.

Economic substance. The Economic Substance Regulations were cancelled for financial years ending after 31 December 2022 by Cabinet Decision No. 98 of 2024. Obligations remain only for FY2019 to FY2022, so an older holding vehicle with unfiled notifications or reports for those years still has an exposure to clean up.

VAT. The operating companies below will be charging VAT at 5% under Federal Decree-Law No. 8 of 2017, as amended by Federal Decree-Law No. 18 of 2022, on room nights, food and beverage and tourism services. Intra-group charges from a holding company — management fees, brand royalties — need to be documented and priced, not assumed to be invisible.

Governing Law and Disputes

Because a RAK ICC company usually exists to hold a bargain between investors, the dispute clause in the shareholders' agreement matters more than anything else in the file. Arbitration seated in the UAE is governed by Federal Law No. 6 of 2018, as amended in 2023. Two changes have caught out older documents: DIFC-LCIA was abolished by Dubai Decree No. 34 of 2021 and its caseload moved to DIAC, and ADCCAC has been restructured as arbitrateAD. DIFC remains available as a seat. Agreements drafted years ago that still name a defunct institution should be updated, because arguing about the clause is an expensive way to start a dispute.

Where the disagreement is with a hotel operator, a ground handler or a franchisor rather than a co-shareholder, the operating contracts carry the answer. Our work on tourism dispute resolution usually begins by separating the shareholder-level dispute from the operating-level one, because the forum, the evidence and often the parties are different.

Data and Guest Information

Guest data — passport scans, payment details, itineraries — is collected by the operating entity, but groups routinely centralise booking platforms and customer databases at holding level. Once that happens the holding company is handling personal data and the federal Personal Data Protection Law, Federal Decree-Law No. 45 of 2021, is in play, alongside the separate regimes that DIFC and ADGM apply to entities inside those centres. Write down which entity controls the data, which processes it on the other's instructions, and what happens to guest records when a property leaves the group.

Getting the Structure Right the First Time

Decide which entity will hold the operating licence and put it in the emirate where the activity happens. Use RAK ICC above that layer, for shares, brand and the investor agreement, and document the licences and service agreements between the two levels. Keep the registry filings and beneficial ownership records current. Register the operating entities for VAT and corporate tax when they are licensed. And check that the arbitration clause names an institution that still exists.

For advice on structuring a hospitality group, incorporating a holding company or reviewing an existing offshore structure, contact the Nour Attorneys team.

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Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal advice. Readers should seek professional legal advice tailored to their specific circumstances before making any decisions or taking any action based on the content of this article.

Nour Attorneys Team

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