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Setting up an offshore company in the UAE has become a popular choice for UK entrepreneurs, investors, and international business owners. Among the available offshore jurisdictions, RAK ICC (Ras Al Khaimah International Corporate Centre) stands out for its flexibility, cost-effectiveness, and strong regulatory framework.

However, despite its advantages, many investors make avoidable mistakes during the business setup in RAK ICC, which can lead to delays, compliance issues, or even banking rejections. In this blog, we’ll walk you through the most common mistakes to avoid when setting up a RAK ICC offshore company and how working with an experienced consultant like Avyanco UK can help you get it right the first time.

1. Choosing RAK ICC Without Understanding Its Purpose

One of the most common mistakes is choosing RAK ICC without fully understanding what it is designed for.

RAK ICC is an offshore jurisdiction, meaning:

• It does not allow business operations within the UAE

• It is mainly used for asset holding, international trading, IP holding, and investments

• It does not issue residence visas

Some investors assume RAK ICC works like a Free Zone or Mainland company, which is incorrect. If your goal is to trade locally in Dubai or obtain a UAE visa, RAK ICC may not be suitable.

Tip: Always align your business objectives with the right structure before proceeding with offshore company setup in Dubai.

2. Incorrect Business Activity Selection

Another major mistake is selecting the wrong or vague business activity during incorporation.

RAK ICC offers flexibility, but authorities and banks carefully review:

• Nature of business

• Source of funds

• Countries involved in operations

Incorrect activity selection can lead to:

• Delays in approval

• Compliance issues

• Bank account rejection

Solution: Work with experts in business setup in RAK ICC who understand regulatory expectations and can structure your company correctly from day one.

3. Underestimating Bank Account Requirements

Many investors believe that forming a RAK ICC company automatically guarantees a corporate bank account. This is one of the biggest misconceptions.

In reality:

• Banks conduct strict KYC and AML checks

• Poor documentation can lead to rejection

• Not all banks support offshore companies

Lack of proper business explanation, incomplete documents, or unrealistic financial projections often result in failed banking applications.

Avyanco UK Advantage: We assist not only with RAK ICC registration but also with bank account strategy and documentation, significantly improving approval chances.

4. Ignoring Compliance and Substance Requirements

While RAK ICC offshore companies are not subject to UAE corporate tax in most cases, compliance is still mandatory.

Common compliance oversights include:

• Not maintaining proper accounting records

• Ignoring Economic Substance Regulations (ESR), where applicable

• Missing annual renewal deadlines

Non-compliance can lead to penalties, fines, or even company suspension.

Pro tip: Offshore does not mean “non-regulated.” Proper compliance is essential for long-term success.

5. Assuming RAK ICC Is a “Zero-Reporting” Company

Some investors wrongly assume that RAK ICC companies require no reporting at all.

In reality:

• Financial records must be maintained

• Information may be required by banks or authorities

• International tax reporting (such as CRS) may apply

Failure to prepare for these requirements can create serious issues, especially for UK investors with global tax obligations.

6. Not Planning the Ownership and Shareholding Structure Properly

Poor planning of ownership structure is another common mistake.

Issues arise when:

• Shareholding is not aligned with asset protection goals

• Future restructuring is not considered

• Nominee or corporate shareholders are misunderstood

A poorly structured setup can lead to legal complications and limited flexibility in the future.

Expert advice matters: Avyanco UK helps clients structure RAK ICC companies for asset protection, succession planning, and international expansion.

7. Choosing the Cheapest Service Provider

Opting for the cheapest incorporation service often results in:

• Hidden costs

• Limited post-incorporation support

• No assistance with banking or compliance

RAK ICC company formation is not just about registration—it’s about setting up a fully functional offshore structure.

Remember: A low-cost setup that fails at banking or compliance will cost more in the long run.

8. Lack of Professional Guidance for UK Investors

UK investors face additional considerations such as:

• HMRC reporting obligations

• Double taxation planning

• International compliance standards

Attempting a DIY approach or relying on inexperienced agents often leads to costly mistakes.

This is where working with a UK-focused consultant makes a difference.

Why Choose Avyanco UK for RAK ICC Company Formation?

At Avyanco UK, we specialise in helping UK entrepreneurs and investors with:

• Business setup in RAK ICC

• Strategic offshore company setup in Dubai

• Banking assistance and compliance support

• Structuring companies aligned with UK tax considerations

With years of experience and a strong presence in both the UK and UAE, we ensure your RAK ICC offshore company is set up correctly, compliantly, and efficiently.

Final Thoughts

RAK ICC offers an excellent offshore solution when used correctly—but mistakes during setup can undermine its benefits. By avoiding these common pitfalls and partnering with experienced professionals, you can enjoy a smooth, compliant, and future-ready offshore structure.

If you’re considering RAK ICC company formation from the UK, speak to Avyanco UK today for expert guidance and end-to-end support.