Introduction
The government is in the process of developing Ras al-Khaimah as a manufacturing, commercial and recreational centre through policies aimed at promoting the country internationally. (PriceWaterhouseCoopers)
Why Ras al-Khaimah?
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“The Middle East’s best-kept secret” CEO Middle East1
Ras al-Khaimah is the northernmost of the United Arab Emirates (UAE). Located on the gulf of Persia and backed by the Hajar mountains, it is the 4th largest of the emirates and growing rapidly – in 2005 its gross domestic product grew by 18%2. It has a strategic location as the first port on the gulf, bordering Oman, near Iran and just 45minutes from the UAE hub Dubai.
The emirate also has an abundance of flora and it is different to the dry, flat desert of the southern emirates3.
Ras al-Khaimah has vast resources of raw materials that help boost its industrial production - without depending on oil production. Furthermore, the emirate is free of income and corporate tax and has a rapidly expanding free trade zone4. These factors increasingly entice inward investment – in fact the emirate is expecting €10bn of foreign direct investment in 20075.
Ras al-Khaimah at a glance
Location:Northernmost of the United Arab Emirates
Population:250,000
Currency:AED (United Arab Emirate dirham, £1=AED7.2)
Language:Arabic
Time Zone:GMT+4
Climate:Desert
This emirate has often been compared to Dubai five years ago. However, Dubai today is very congested with 100 storey buildings and a high premium to pay on property and office spaces – it is not unusual for office tenants to pay 12-18 month advance money to gain access.
There are fewer skyscrapers in Ras al-Khaimah due to a stronger weighting on maintaining the authenticity of the emirate and keeping up the environmental standard. The interest is shifting from Dubai to Ras al-Khaimah, which is cheaper and can also cater for the demand – a classic “hotspot overflow” story.
The emirate is also politically safe with long-standing sheikhdom of Sheikh Saqr bin Mohammed al Qasimi, the retired leader, and the crown prince and current leader Sheikh Saud bin Saqr al Qasimi. It has a well-organised government that is forward-looking and keen to attract foreign businesses.
The transport infrastructure is currently being improved to accommodate the increasing demand from tourism and businesses. Already, holiday accommodation occupancy rates in Ras al-Khaimah are a high 80% and according to Oxford Business Group, the emirate is on its way to becoming the strongest tourism destination of the UAE7. Attractions such as the Virgin Spaceport will be built to add uniqueness to the location8.
Ras al-Khaimah is on its way to becoming the strongest tourism destination of UAE.
Oxford Business Group
With projected capital growth of 50% over the next three years9, rapidly increasing
FDI and the superb tax incentives, Ras al-Khaimah makes for a very attractive investment opportunity.
What does “hotspot overflow” mean?
When prices reach a certain level in a hotspot, buyers feel they cannot afford the prices any more. They start looking for similar areas which are relatively undiscovered in order to obtain better deals. This is called a hotspot overflow.
- Bennett, James ‘RAK’s back’ in CEO Middle East 8 October 2006
- www.zawya.com/story.cfm/
- cm1.zawya.com/researchreports/global.pdf
- www.rakftz.com/en/rak_emirate
- www.zawya.com/story.cfm
- PriceWaterhouseCoopers and RAK Government ‘Destination Ras Al Khaimah – Overview of the business environment and regulatory framework’
- www.ameinfo.com/83381.html
- cm1.zawya.com/researchreports/global
- Peter Parfait’s Overseas Praoperty Professionals e-newsletter 04/01/07