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Director General of RAK DED: “Ras Al Khaimah’s trade records AED 8.9 billion in 2017 with a 3.0% growth rate over 5 years” July 09,2018

Director General of the Department of Economic Development in Ras Al Khaimah, Dr. Abdulrahman Al Shayeb Al Naqbi, said that Ras Al Khaimah has witnessed a positive development during the last few years compared with the economic performance of many economies in the region and the world. Dr. Al Naqbi attributed this progress to the successful policies adopted by the federal government in the field of economic diversification and sustainable development, aimed at developing various sectors, especially the manufacturing sector, which accounts for 27% of the Emirate's Gross Domestic Product (GDP) and the stable growth of the tourism sector, which increased its contribution to the Emirate’s GDP to more than 5%.

In an interview with “Al-Bayan Al-Iqtisadi”, Dr. Al Naqbi highlighted the most prominent economic developments in Ras Al Khaimah, pointing out to an annual growth of 3.0% in the foreign trade over five years, which recorded AED 8.9 billion in 2017. The total value of exports amounted to AED 3.4 billion, with an annual growth rate of 7.9% in recent years. Freight transport also saw positive growth rates in 2017, with 54% of loaded cargo and 13% of off-loaded cargo, while the number of departing passengers increased by 4% and arriving passengers by 3%, reflecting the positive traffic witnessed at the airport during the year.

Dr. Al Naqbi added that 15 incentive initiatives have been launched since the beginning of the year to develop the overall business environment in the Emirate. He indicated that the DED Friends Council will be launched at the beginning of the fourth quarter to engage business owners from different sectors in decision making. According to Dr. Al Naqbi, various licenses will be linked to their geographical location and the International Standard Industrial Classification of All Economic Activities, in its forth version, (ISIC4) will be adopted to classify economic activity and prepare statistical reports that encourage investment.  

The Director General also noted that the department will be launching an incubator and business accelerator to support emerging businesses in Ras Al Khaimah, the first of its kind for emerging companies and innovations in the Emirate. He said that the Department of Economic Development is working to facilitate the work of investors, where the administrative procedures for obtaining a license for general trade was reduced from 8 steps to only two steps.

Dr. Al Naqbi added that Ras Al Khaimah has continued to score record numbers of tourist arrivals. He indicated that the number of arriving visitors in 2017 grew up to 19% amid a significant increase in the number of visitors from emerging markets. The local tourism market remained the main destination of tourists, getting 50% of the total visits in 2017.

Growth momentum

What are the growth rates in Ras Al Khaimah in the light of the global challenges and the fall of oil prices?
The economy of Ras Al Khaimah has managed to maintain good growth rates despite the decline in oil prices in recent years, and the weak global economic performance. With the return of oil market momentum in 2018, as well as many economic initiatives taken this year, Ras Al Khaimah is expected to continue its positive growth rates and we look forward for all citizens and residents of the Emirate to begin seeing these results.

The wise decisions and directives of His Highness Sheikh Saud Bin Saqr Al Qasimi, Member of the Supreme Council and Ruler of Ras Al Khaimah, have played an active role in driving the economic development of the Emirate by addressing the needs of all involved stakeholders in the economic cycle; investors, consumers and institutions. All decisions made come within the strategic direction of the government to monitor and address the actual needs of the business community in the Emirate and provide high value services that encourage investment projects.

Catalytic initiatives

How do see the initiatives, decisions and incentives to support businesses?
RAK DED has launched a number of new regulations that cover a variety of incentives to develop the business environment in line with the actual needs and aspirations of the business community and to add further momentum into the sustainable economic and trade movement. These incentives included joining the “Start Your Business in 15 Minutes ‘Bashr’” initiative, an initiative by the General Authority for Regulating the Telecommunications Sector (TRA), which facilitates business establishment in simple, fast steps taking no more than 15 minutes.

Services are activated with all local and federal government departments and entities involved in licensing economic activities in the UAE, with a new violations’ table that reduces the cost of businesses in Ras Al Khaimah by canceling 33 violations in the previous table, since these violations are within the competencies of both local and federal government bodies. DED has also reduced the minimum and maximum charge of these violations. Non-renewal violations also saw a reduction by 60%  and the number of procedures for each violation was reduced to only two procedures instead of three, which eases the burden of regulatory procedures on business owners in the Emirate and exempts them from the issuance fees for commercial licenses in the first year and reduces the number and duration of procedures for general trade licenses for both UAE and GCC.

Business incentive measures included granting the license of Business Centers in the Emirate of Ras Al Khaimah. The business centers are an office with a large area that can be divided from inside to open, semi-closed or fully-closed areas in order to provide privacy. These spaces can be used as administrative offices. Business Centers also provide secretarial services, administrative support and customer support, as well as telecommunications and office equipment.

The Virtual Merchant initiative was also launched with the aim of supporting entrepreneurs managed through social media channels, websites, smart applications, which work is launched from Ras Al Khaimah to ensure consumer rights.

Economic Licenses

How do you guarantee facilitated commercial licenses?
Companies headquartered outside Ras Al Khaimah were granted economic licenses without the need to have an office space in the Emirate for the first year. We also provided the option for adding an additional activity to the license through a permit only and we extended the grace period for renewing licenses from 30 days to 90 days, showing more flexibility with business owners to arrange their payments and obligations.

More incentives were offered by allowing more than one license (a maximum of three licenses) in one location for activities of a desk nature. We also applied the electronic trading license. In the area of Digdaga and the area near the Emirates Post sign, infrastructure-affected enterprises were exempted from renewal fees for a year, with 70% and  40% consecutively. We have also made improvements to Alghad License and expanded it to include 34 economic activities.

The incentives included exempting inmates in the Punitive and Correctional Institution of the Emirate of Ras Al Khaimah and their families from Alghad License fees for three years. This will be done in coordination with the concerned institutions. An agreement will be signed soon and the People of Determination will be exempted from the registration fees for 3 years.

Easing burdens

What do you expect from providing facilitations and incentives that ease the burdens for companies and the business sector?
The measures and incentives provide great support for business, driving more investments to the Emirate, reducing costs and establishing more companies in specific activities to boost the Emirate's economy. These incentives complement the previous efforts of the department, which are expected to leave a clear impression on the business environment.

Among these incentives was the adoption of the “TASHEEL 1” initiative by the executive council. Tasheel initiative has significantly reduced the time-to-market and the number of procedures from 8 procedures to 2 procedures only, without any local financial cost. This will advance Ras Al Khaimah’s rank in the indictor of commercial activity startups.

The Department will continue to improve services it offers to the business community in order to enhance the role of the private sector in supporting sustainable economic development based on competitiveness, knowledge and innovation. The satisfaction of the clients is one of the most important objectives of the Department. We want to improve profitability levels as well as the Emirate's economic policies and make them flexible and able to cope with volatile economic conditions.

The department is scheduled to launch the DED Friends Council at the beginning of the fourth quarter. The board will include employers from different sectors who will engage in the business decision-making process and discuss the department’s predispositions with stakeholders. The Council will hold quarterly meetings.

Facing Challenges

What policies do you adopt to face the global and regional economic challenges? Do you coordinate with relevant authorities?
Regional and global developments are one of the most imperative challenges facing the economies of the countries of the region and Ras Al Khaimah is not an exception. We are working with all local and federal agencies to turn these challenges into opportunities that can benefit the economy of both the Emirate and the UAE. Coordination between the local and federal government agencies is one of the main area we seek to develop as well as making the mechanism to use federal economic legislation more flexible. Achieving this allows the optimal utilization of resources and human capital in the UAE to upgrade government services in all fields.

In our opinion, the development service provision remotely, whether through electronic or smart services, is a major challenge that we are transforming into growth opportunity by providing the required financial and human resources.

Promoting opportunities

Ras Al Khaimah is known for its wealth of opportunities and promising investment capabilities. How is this being promoted locally and internationally?
Regional and international promotion of investment opportunities in the Emirate is one of the main roles played by RAK DED in cooperation with all local authorities, especially the Tourism Development Authority (RAKTDA) and the Ras Al Khaimah Economic Zone (RAKEZ). The DED also organizes several roadshows to introduce opportunities to the international business community, and participate in investment events, at the local or federal level through the Ministry of Economy and other federal ministries.

The Department also organizes visits for various public and private sectors and investors in all sectors to Ras AL Khaimah to learn more about the investment environment in the Emirate.

Smart Services

The UAE enjoys a unique position in providing smart services. What steps have you taken in this area?
Electronic and smart services constituted 15.6% of the total services offered in 2017. This percentage has increased to nearly 53.6% this year. In line with the Department’s  strategy to improve the quality of services to match the economic importance of the Emirate, we strive to improve customer services by facilitating the procedures of licensing and issuing economic permits. We also expand the geographical reach of our service centers and provide innovative solutions for service provision.