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21st June 2007

United n Tax haven

arab emirates n High GDP growth

n $25 billion direct inve


stment

Ras al-Khaimah n Emerging tourism de


stination

turns
n Year-round rental re
Ov e rv i e w
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Ras al-Khaimah at a glance

Ras al-Khaimah

Population: 250,000
Area: 1,680 km²
Coastline: 40km
Climate: High temperature and humidity in the summer;
moderate in the winter
Languages: Arabic (official), English, Hindi, Urdu and Farsi
Religion: Islam, although other religions are accepted privately
Government type: A member of a federal constitutional monarchy
(the United Arab Emirates)
Local time: GMT+4
Capital: Ras al-Khaimah
Currency: Dirham (fixed rate: 1US$ = 3.67 Dhs)

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Why Ras al-Khaimah?


Booming economy
With an 18% growth in GDP in 20051, Ras al-Khaimah is growing at
a pace to match that of Dubai five years ago. Strong economic growth,
combined with a business-friendly government means the economy is
expected to continue strengthening. This has a very positive effect on
property capital growth.

Tax free
Ras al-Khaimah’s free trade zone has zero tax on income and capital
gains, and no property transfer or value-added tax2. It also allows 100%
expatriate property ownership3. This makes it an ideal environment for
any investor.

Rental potential
With a growing economy and tourism sector, Ras al-Khaimah has
a significant rental potential for short- and long-term lets. With
rental prices rising at a fast rate in Dubai, both tenants and tourist Planned gateway building to Ras al-Khaimah

are looking for more affordable options. As a new market, Ras


al-Khaimah is an attractive alternative – and with holiday
accommodation occupancy rates already at a impressive 80%, this
emirate will just keep getting hotter4.

Impressive foreign investment


The confidence of international businesses in Ras al-Khaimah is
reflected by $25 billion of foreign and domestic direct investment since
20005. The government had an excellent response to the incentives
encouraging investment. This business confidence will soon translate
into increased employment opportunities, and with jobs comes the
demand for quality accommodation to rent and to buy.

Growing tourism sector


The government of Ras al-Khaimah is committed to establishing itself
as a strong tourism destination, which saw a growth rate in visitors of
47% between 2001 and 20056. Its coastal location less than an hour’s
drive from Dubai international airport places it in an ideal position
to grow its tourism base as tourists look for the Dubai experience
but in a less overdeveloped setting. New attractions including the
Virgin Spaceport, the Jebel Jais Mountain Resort, the WOW RAK
theme park and the Al Marjan Underwater Park are being built. The emirate boasts fine traditional architecture

1. Ras al-Khaimah Economic & Strategic Outlook, Well on the path of diversifying the economy... February
2007, Global Research, Global Investment House http://cm1.zawya.com/researchreports/global/20070205_Global_101
2. http://www.rakftz.com/en/rak_emirate.php?id=2
3. http://www.rakftz.com/en/setup.php?id=6
4. http://www.ameinfo.com/83381.html and http://property.timesonline.co.uk/tol/life_and_style/property
overseas/article1617595.ece
5. http://archive.gulfnews.com/business/Development/10132602.html
6. Ras al-Khaimah Economic & Strategic Outlook, Well on the path of diversifying the economy... February
2007, Global Research, Global Investment House http://cm1.zawya.com/researchreports/global/20070205_Global_101

 overview < RAK


Capital growth potential
With a growing economy, a young population working in new
industries and a developing tourism sector, Ras al-Khaimah has great
potential for capital growth. Remember how Dubai has developed
over the last decade? Ras al-Khaimah is following the same trend.
Entering this new market now with low entry prices points towards
good capital returns as the economy develops, as suggested by the
international investment specialists Ernst & Young7.

Politically stable
Ras al-Khaimah has a stable political structure. As a member of the
UAE since 1972, the emirate has been strengthened economically and
politically. The emirate has been led by Sheikh Saqr bin Mohammed
Al Qasimi since 1948. His son, Sheikh Saud bin Saqr Al Qasimi was
appointed Crown Prince and Deputy Ruler in June 2003, and has
been responsible for the development of a strong business-friendly
economic environment.8

Oil-independent economy
Only 3% of Ras al-Khaimah’s economy is based on oil, making Coast road into the city

it unique among the other emirates of the UAE9. With its own
microclimate, it is the most fertile emirate, so a significant part of its
economy comes from agriculture, as well as dairy production, fishing
and mineral manufacturing. There is also a growing tourism sector.

City of the future


Ras al-Khaimah has been described as one of the top ten North
African and Middle Eastern cities of the future, in its ability to
welcome foreign investment and to plan ambitious developments for
the future. Add to this the emirate’s excellent demographics with a
young population, keen to drive the economy, increasing the demand
for quality accommodation. Getting into this market early means you
can make the most of the returns, as the emirate’s economy develops.

Cheaper than Dubai


Ras al-Khaimah has the advantages of Dubai, with its excellent Mountains outside the centre of Ras al-Khaimah
developments and amenities in an emerging market, but at significantly
lower prices, which allow plenty of room for growth. While Dubai
was the pioneer five years ago, Ras al-Khaimah has looked at Dubai’s
experience and taken note of the good parts while disregarding the less 7. http://www.multi-housingnews.com/multihousing/reports_analysis/feature_display.jsp?vnu_content_
id=1003550091
8. Destination Ras al-Khaimah, Ras al-Khaimah Investment Authority , p9
good parts. For example, the government is concerned with balancing 9. Ras al-Khaimah Economic & Strategic Outlook, Well on the path of diversifying the economy... February
1041.pdf 2007, Global Research, Global Investment House http://cm1.zawya.com/researchreports/
the authenticity of the emirate with development, so it is unlikely to global/20070205_Global_101041.pdf
10. http://www.fdimagazine.com/news/fullstory.php/aid/1858/Middle_Eastern___North_African_Cities_of_
the_Future_2006_07.html
become overdeveloped like Dubai. 11. Ras al-Khaimah Economic & Strategic Outlook, Well on the path of diversifying the economy... February
2007, Global Research, Global Investment House http://cm1.zawya.com/researchreports/
global/20070205_Global_101041.pdf
1041.pdf

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Economic overview
Ras al-Khaimah, the northernmost emirate of the UAE, combines This emirate has often been compared to Dubai five years
vast reserves of raw materials and a strong strategic location as a key ago. However, Dubai today is very congested with 100 storey
port on the Arabian Gulf and the Middle East. As the most fertile buildings and a high premium to pay on property. There is
emirate of the UAE, it also serves as a major agricultural hub. less large-scale development, like skyscrapers, in Ras al-Khaimah,
due to a stronger emphasis by the government on maintaining
the authenticity of the emirate and environmental standards.
Interest is shifting from Dubai to Ras al-Khaimah as it is more
affordable and can also cater for the demand – a classic “hotspot
overflow” story.

President Khalifa bin Zayed Al Nahayan of the UAE, elected November 2004

The emirate’s economic growth is driven by the politically-safe


sheikdom and increasingly forward-looking and stable government
that are keen to attract inward investment. Incentives such as
the Free Trade Zone16 and 0% income, corporate and capital
gains tax17 have recently been introduced to increase interest in
Presidential palace
the emirate. Due to these, Ras al-Khaimah has to date received
some $25 billion of foreign and domestic direct investment18. Already, holiday accommodation occupancy rates in Ras al-
Khaimah are a high 80% and according to Oxford Business
The emirate has a booming economy – in 2005 its gross domestic Group, the emirate is on its way to becoming the strongest
product grew by 18%12. Future economic growth is supported tourism destination of the UAE20. Attractions such as the Virgin
and sustained by a young population13 that puts the emirate in Spaceport are being built to add uniqueness to the location21.
an advantageous position in relation to other members of the
UAE. Furthermore, the economy is, unusually for the UAE, “Ras al-Khaimah is on its way to becoming the
completely independent of oil14. This means that should oil
strongest tourism destination of UAE”
shocks occur, Ras al-Khaimah will not bear the burden.
Oxford Business Group
“The government is in the process of developing
With high projected capital growth in the coming years22,
Ras al-Khaimah as a manufacturing, commercial
rapidly increasing FDI and the superb tax incentives, Ras
and recreational centre through policies aimed at
al-Khaimah makes for a very attractive investment opportunity.
promoting the country internationally”
PriceWaterhouseCoopers

 overview < RAK


Political overview
A constitutional monarchy, Ras al-Khaimah is one of the seven
emirates that form a federation, the United Arab Emirates
(UAE). The UAE is known for its strong internal stability and
is considered one of the most liberal countries in the Gulf,
with other cultures and beliefs generally tolerated23.

The political system is two-tiered, consisting of a federal


government and local government structure for each emirate.

The federal government is led by the Supreme Council of Rulers,


comprised of the ruler of each emirate. Sheikh Khalifa bin Zayed
bin Sultan Al Nahayan, ruler of Abu Dhabi, has been President
since November 200424. The vice president and prime minister is
Sheikh Maktoum bin Rashid Al Maktoum, ruler of Dubai, who
took office in January 200625.

Tradition and modernity combined

There is a council of ministers headed by the prime minister, who


can be drawn from any of the emirates. The council is guided by
a 40-member Federal National Council, with members drawn
from each emirate in proportion to its population.

Ras al-Khaimah is headed by Sheikh Saqr bin Mohammed Al


Qasimi who has been the ruler of Ras al-Khaimah since 1948.
His son, Sheikh Saud bin Saqr Al Qasimi was appointed
crown prince and deputy ruler in June 2003, and has been
responsible for the development of a strong business-friendly
economic environment, while setting up Ras al-Khaimah-based
businesses in over 130 countries around the world26.
Sheikh Saud Bin Saqr Al Qasimi of Ras al-Khaimah

12. Ras al-Khaimah Economic & Strategic Outlook, Well on the path of diversifying the economy...
February 2007, Global Research, Global Investment House http://cm1.zawya.com/rel/20070205_Global_
01041.pdf 20. http://www.ameinfo.com/83381.html and http://property.timesonline.co.uk
13. Ibid /tol/life_and_style/property/overseas/article1617595.ece
14. Ibid 21. http://cm1.zawya.com/researchreports/global/20070205_Global_101041.pdf
15. PriceWaterhouseCoopers and RAK Government ‘Destination Ras al-Khaimah – 22. http://www.rak.ae/portal/page?_pageid=33,84545&_dad=portal&_schema=PORTAL&URL_Functions=
Overview of the business environment and regulatory framework’
16. http://www.rakftz.com/en/rak_emirate.php?id=2 http%3A%2F%2Fegacontent.rak.ae%2Fstellent%2Fgroups%2Fdevelopment%2Fdocuments%2Fpage%2Fe
17. Ibid. _rak015247.hcsp
18. http://archive.gulfnews.com/business/Development/10132602.html 23. http://news.bbc.co.uk/1/hi/world/middle_east/country_profiles/737620.stm
19. Overseas Property Professionals e-newsletter 04/01/07 24. http://en.wikipedia.org/wiki/Khalifa_bin_Zayed_Al_Nahayan
25. http://en.wikipedia.org/wiki/Mohammed_bin_Rashid_Al_Maktoum
26. Destination Ras al-Khaimah, p9
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10 facts about Ras al-Khaimah


4 Ras al-Khaimah means ‘top of the tent’ in Arabic. This is
be due to its geographic location as the most northern of
the emirates.

4 One of the most popular traditional breads is khammer,


which made of a flour paste mixed with water and dates.
The mixture is left to rise for a night before being baked the
following morning.

4 Ras al-Khaimah will soon be home to a 12km ski slope.


4 Guests are always greeted with traditional coffee as a gesture of
respect and warm welcome.

4 The ancient tradition of camel racing has recently been revived.


There is a national camel racing festival every February,
watched and sponsored by the Sheihk rulers.

4 Men all over the country nearly all wear the same unified dress
called Kandurah. The head cover called Ghottrah is usually
supported by a black or white kofiyyah or eqal. Men wear
sandals on most occasions.

4 A traditional dance called Razeef al-Shohooh is a poetic, music


and dance performance that can involve up to seventy people
at one time.

4Boat racing celebrates the great maritime traditions of the


region, with some boats up to 20 metres in length rowed by
up to 100 oarsman. Boat races are held on special occasions
throughout the year.

4 Last February, 430 people from 38 countries completed


the RAK international half marathon, in temperatures that
hit 72ºC.

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 overview < RAK