In answer to the question, should you consider incorporating in Ras Al Khaimah, knowing full well that it has a legal system based on Sharia law, we say YES!, by all means incorporate in RAK- Ras Al Khaimah.
Generally speaking, Sharia Law prohibits usury, or in other words, financing with interest. A Muslim living in a manner consistent with this law, theoretically cannot seek a bank loan, or even lend money and charge interest.
Capitalism in the United Arab Emirates, Dubai, Abu Dhabi and Ras Al Khaimah
In view of the foregoing, and given that Sharia law prohibits usury, one might wonder about these cities, fully geared towards capitalism, with their pharaonic constructions, skyscrapers sprouting up out of the soil like mushrooms, aspiring to be among the highest in the world, just behind the towers of Singapore, Hong Kong, New York and Kuala Lumpur. How can these cities flourish under capitalism and offshore banking without having recourse to financing with interest?
The clichés of Dubai and Abu Dhabi show that capitalism is king in the Emirates and that opulence is omnipresent, as much in the magnificence of the buildings, hotels and apartments as in the flashy vehicles, covered in gold. In these cities the party is in full swing; leaving the conventional image of the submissive woman hidden behind her veil very, very far behind. Where is the place of Sharia law in this transformation?
Islamic finance handles around $700 billion in annual investments yet it is fully profitable, paying and receiving interest. How can this be?
Five Reasons to incorporate in Ras Al Khaimah without fear of Sharia law
- In order to allow the banking system to exist and prosper, the Muslim capitalist system has put in place a legal instrument to bypass the problematic of Sharia law called the “Sukuk” (for English see Wikipedia ) which is a mechanism used to buy and resell a good or service immediately, with interest already included in the price. The banks can therefore indirectly lend and achieve their margin by bypassing the interest .
- Dubai, Abu Dhabi and Ras Al Khaimah have understood that to attract foreign investors it is best to apply a moderate Islam that would appeal not only the Muslims of the whole world, but especially the non-Muslims. The Emirates are absolutely liberal and impose no requirements to wear the veil or to practice any other ancestral Muslim tradition.
- Following the examples set in London, the United States and other major countries, France, through Hervé de Charrette, a former Minister created the French Institute of Islamic Finance to allow the Muslim investor to invest in accordance with their beliefs.
- The law of the United Arab Emirates guarantees all assets deposited locally, engaging the fortune of the emirs to this effect.
- A company at RAK (Ras Al Khaimah) can freely have a bank account outside Ras Al Khaimah.