Opening a UAE offshore company is a highly popular option for investors looking into foreign trade expansion. A Dubai offshore company setup is ideal, tax efficient, and cost effective. Offshore companies are also known as non-resident “paper” companies. They let entrepreneurs operating in MENA (Middle East & North Africa) regions that have no administrative obligations. Additionally, offshore businesses are full ownership Limited Liability Companies that are exempt from taxes and have zero annual accounting & tax obligations.
Offshore companies often fulfill the following purposes:
- International trading
- Holding company
- Shipping company
- Owning real estate
- Registering copyrights & patents
- International consulting services
Regulations for international company registration
Even though the UAE offshore company incorporation process is straight-forward, corporate entities need to keep certain aspects in mind:
- First, there is no minimum share capital requirement.
- You will need at least one shareholder and director.
- At the time of allocation, all shares must be fully paid. UAE does not allow bearer shares or differential classes of shares. However, investors do not need to deposit their capital in banks.
- UAE allows for 100% foreign ownership of your offshore company incorporation along with 100% tax and duty exemption costs.
- You will be eligible to open a corporate bank account in Dubai, UAE
- A Dubai offshore company must appoint a registered agent in the form of legal firms, auditors, consultants etc., from a pre-approved list maintained by UAE free zones.
- A UAE offshore company falls under the domicile of UAE free zones.
- Dubai offshore company incorporation can be done remotely without the physical presence of the investors. However, documents will have to be signed in the registered agent’s office only.
- In case of suspicions arising, the authorities concerned can request audited financial statements.
Difference between offshore and free zone company setup
UAE offshore companies are not the same as UAE free zone companies. Offshore companies are legal business entities set up with the primary intention of operating outside its registered jurisdiction and/or the location of its ultimate ownership. On the other hand, free zones are onshore structures that can legally carry out business within the UAE, and permit UAE residency for shareholders & employees.
Benefits of registering an offshore company in Dubai
Foreign entities may have several reasons to register their UAE offshore company. Some of the chief benefits of an offshore corporate structure are:
- They allow entities a foot into international market expansion
- Stability and access to an economically friendly legal system
- Flexible regulatory structure
- Tax neutrality in international earnings in terms of personal or company income, capital gains, inheritance taxes etc. (dependent on jurisdiction)
- Increased access to global funding
- Separation and protection of assets (like intellectual property) from operating entities
The UAE has three principal jurisdictions that allow offshore company formation:
- Jebel Ali Free Zone Authorities (JAFZA)
- Ras Al Khaimah (RAK)
- Ajman Free Zone
Of these, RAK and JAFZA are the most popular. Both are “tax free” jurisdictions and permit 100% foreign ownership. Additionally, the UAE has Double Tax Treaty agreements with over 90 countries. Offshore companies can also open multi-currency accounts in the UAE while doing business internationally. However, they may not be able to perform business activities with UAE residents or have physical premises within the UAE.
While both these zones have their specific benefits, Ras al Khaimah is more cost-effective. However, JAFZA is the only offshore entity that allows stakeholders to legally own property in Dubai. Both RAK international companies & JAFZA offshore companies need to appoint an approved registered agent.
JAFZA international company incorporation: Features & benefits
The Jebel Ali Free Zone Authority (JAFZA), in accordance with the Dubai government, initiated Offshore Company incorporation in 2003 under Jebel Ali Free Zone Offshore Companies Regulations 2003.
JAFZA offshore company formation: Key features
- Offshore companies require a minimum of 1 shareholder and also permit corporate shareholders. In case there are international corporate shareholders, they need to have attested company documents.
- You need to have at least two directors and corporate directors are not allowed. The details for directors are not present on public registers.
- All offshore companies must have a secretary. A company director can also act as a company secretary.
- JAFZA does not have any minimum share capital requirements.
- All JAFZA offshore companies need to maintain accounting records dating back up to 10 years from preparation. Additionally, a company auditor from an approved list must examine and report these accounts.
JAFZA offshore company formation: Benefits
- 100% foreign ownership of your offshore business
- Full permission to own real estate in Dubai (free zone and developer permission required)
- Permission to own shares in free zone and onshore LLC companies
- Hold multi-currency bank account for international transactions also
- Shareholders and directors can choose not to disclose themselves on a public register
RAK international company incorporation: Features & benefits
The Ras al Khaimah government launched the International Company Structure in 2006. Also known as the RAK Offshore Company, they fall under the regulatory authority of Ras Al Khaimah Free Trade Zone Authority International Companies Regulations 2006.
RAK offshore company formation: Key features
- RAK Offshore companies require at least 1 shareholder and corporate shareholders are also permitted. In case there are international corporate shareholders, they need to have attested company documents
- You need to have at least one director but does not allow corporate directors. The details for directors are not present on public registers
- All RAK offshore companies must have a secretary. A company director can also act as a company secretary
- RAK does not have any minimum share capital requirements
- All RAK offshore companies need to maintain accounting records dating back up to 7 years from preparation. However, these accounts do not need to be filed with RAK authorities
RAK offshore company formation: Benefits
- 100% foreign ownership of your offshore business
- Permission to own shares in free zone and onshore LLC companies also
- Among fastest company incorporation; typically, up to 1 week
- Hold multi-currency bank account for international transactions
- Shareholders and directors can choose not to disclose themselves on a public register
Start your UAE offshore company today!
Forming your international company in the heart of the world’s business capital is now a reality. With the help of trusted business consultants like Shuraa Business Setup, get answers to even the most difficult questions on establishing your offshore company in Dubai. Tap into a world of endless opportunities when you set up your business in the UAE.
Shuraa experts are always available to guide you throughout the offshore company incorporation process and provide a hassle-free, seamless transition. We are available to call on +971 44081900, WhatsApp us on +971 507775554 or email us at [email protected].
