From the top of the RAK International Corporate Centre, foreign tycoons can catch a glimpse of a city transforming.
A long stretch of desert lies toward the north. Luxury villas dot the Persian Gulf coast to the west. A few miles away, Las Vegas-based Wynn Resorts Ltd. is planning a project that it says is intended to be a $3.9 billion gaming resort.
This is Ras Al Khaimah, a northern territory of the United Arab Emirates about 45 minutes from Dubai’s international airport. Best known for its mountain peaks and ceramics company, the emirate is now pitching itself as a haven for high net worth individuals.
Under the leadership of its Michigan-educated sheikh, Ras Al Khaimah — RAK for short — is pursuing an ambitious foreign direct investment strategy that’s luring five-star hotels, industrialists and adventure-seeking tourists from countries ranging from Russia to the Czech Republic. While a Wynn Resort could give a particularly big boost, other efforts are also attracting wealthy executives.
Immigration consultants and advisers say RAK is also likely to benefit from efforts to bring in more wealthy individuals to the emirate via the United Arab Emirates’s citizenship-by-investment program. At the same time, the emirate is developing a new free zone for digital and virtual asset companies. RAK ICC already registers and incorporates tens of thousands of foreign firms.
There are also plans for a super-yacht storage facility and attempts to make Ras Al Khaimah a yacht manufacturing hub, people familiar with the matter said. One Polish yacht maker, which counts tennis star Rafael Nadal and Formula One champion Fernando Alonso among its customers, has said it plans to make luxury catamarans in RAK with a 30 million euro ($33 million) investment.
“Some now like to call it the Las Vegas of the Gulf, but ultimately RAK should be RAK as it has plenty to shape its direction,” said Izzat Dajani, a former senior Goldman Sachs Group Inc. banker and founding chief executive of the Ras Al Khaimah Investment and Development Office, the emirate’s sovereign wealth fund. “The government will be looking at the return on capital in multiple ways – the financial return, the social return and the cultural return.”
RAK is among the smaller of the UAE’s seven emirates and its outsized plans face plenty of hurdles. It’s smaller than Rhode Island, and large swathes of the desert city still have the feel of a ghost town. Some of its big plans have fallen through in the past. In 2013, Spanish club Real Madrid canceled a $1 billion soccer-themed resort that had been planned in RAK after the project’s Luxembourg-based organizer defaulted on payments.
Still, as the swankier emirate of Dubai gets more crowded and expensive, RAK’s star is starting to rise.
Last year, the emirate set a record for annual visitors with more than 1.1 million overnight arrivals, a 16% increase from the prior year, including a 40% gain in foreign tourists. Russia ranks among the top markets for the sheikhdom, buoyed by ongoing direct flights to and from the UAE since the Kremlin sent troops into Ukraine. But the emirate has also lured significant traffic from Kazakhstan and the UK.
Now, the government is turning its sights toward rich Chinese as the world’s No. 2 economy loosens its Covid travel restrictions. A Wynn project would be positioned between the top two global gambling destinations of Macau and Las Vegas, helping the emirate to lure wealthy visitors from the Middle East, Europe and Africa.
The emirate is hoping that many of the wealthy arrivals from around the world will stay permanently. RAK is now pushing to translate this tourist surge into longer-term economic benefits.
The UAE says its citizenship program allows select foreign investors and specialists from other categories to be nominated for citizenship, a program that is benefiting the country as some Caribbean and European nations curb their own schemes.
Ras Al Khaimah’s government didn’t respond to requests for comment via phone and email as well as efforts to reach them at the RAK Media Office.
One government-commissioned study by Ernst & Young looking into a gaming resort’s potential impact found RAK could potentially quadruple its annual tourists by 2030 while the population climbs by a quarter million to 650,000 from 400,000 today, some of the people familiar with the matter said.
That’s still just a small fraction of the UAE’s total population of more than 9 million.
At the center of these plans is the emirate’s ruler, Sheikh Saud, who has a knack for testing the waters with new policies.
He’s delegated much of the emirate’s financial strategy to his daughter Sheikha Amneh Al Qasimi, a Stanford Business School alum who chairs the RAK Investment and Development Office.
RAK has ambitious plans that seek to position it as an alternative getaway to Dubai, Knight Frank wrote in a report focused on high net worth individuals.
The planned Wynn resort “is certainly giving the UAE’s northern most emirate a certain je ne sais quoi, particularly amongst the uber-wealthy,” said Faisal Durrani, head of Middle East research at Knight Frank.
Still, questions remain about how a Wynn Resort would ultimately be operated, given that gambling is prohibited under Sharia law, people familiar with the matter said. Casinos aren’t legal in the UAE as yet. It remains unclear when and if there might be changes to that policy. In May, senior government officials said there were no imminent plans to allow gambling, but casino operators, consultants and lawyers familiar with the matter said at the time that there had been early discussions and a change was being considered.
Still, five-star hotels are already investing heavily in RAK. The InterContinental Hotels Group, Mövenpick and Radisson each opened new facilities last year, increasing the emirate’s inventory by 17% to more than 8,000 rooms. Another 19 properties are in the works, including global brands like the Westin and Nobu, which will be built by a Russian developer.
Nearly 6,000 additional rooms will be added over the next few years. Many are along the beach, fitting the emirate’s pitch of sea, sun and sand.
RAK may be on the way to slowly emerging “as the UAE’s next hospitality hotspot,” Knight Frank’s Durrani said.