In the UAE, you have the opportunity to open your own company in any jurisdiction. In this country, you’ll be able to choose between free zones, mainland, and offshore jurisdiction. If you choose the offshore option, you’ll enjoy its many benefits, which we’ll see below. However, you must learn about the offshore business in the UAE before getting started.
In this article, you’ll learn everything you need to know about the offshore business in this country. Firstly, we’ll explain the benefits it offers to investors like you. Secondly, you’ll learn how to establish an offshore company and the documents it requires. Also, you can find other relevant information about it. Let’s observe:
- What is the offshore business about?
- Where can you set up an offshore company in the UAE?
- Reasons to start an offshore company in the UAE.
- How can you set up your own offshore company in the UAE?
- What documents will you need to establish your offshore business?
- How much can cost to set up an offshore company in the UAE?
- How can Connectfz help you set up an offshore company in the UAE?
1. What is the offshore business about?
First, it is fundamental to know the basic concept of an offshore company. This type of business is a company incorporated in a country overseas in a foreign jurisdiction. In other words, the jurisdiction is other than where the beneficial owner resides. Setting up an offshore business in the UAE can be a good choice for you.
However, some people tend to confuse it with onshore companies, which are completely different. While offshore companies conduct their transactions outside the borders where they are settled, onshore companies conduct them within the borders. Besides, offshore companies can trade, hold assets, and run normal business activities legally outside the jurisdiction.
Also, this type of entity provides additional protection if it’s incorporated in a separate legal entity. Therefore, an offshore company is known as a separate legal entity that provides certain benefits. Besides, this type of company can operate as a separate person different from its owners or directors.
In some cases, offshore companies are also called IBCs (International Business Companies). That is what generally demarcates them from those traditional domestic companies. Although an offshore company’s purpose is similar to a domestic company’s, it provides several advantages. If you want to learn how to establish an offshore business in the UAE, keep reading this article.
Here you can learn about the main differences between free zone companies and mainland companies.
1.1. Offshore business regulations and requirements.
First of all, you must know about some features that an offshore business in the UAE has. Similarly, some requirements are necessary to operate a company of this type. For instance, these are some features, rules, and requirements you must know about:
- The offshore domicile’s location is in the UAE Free Zone.
- In some cases, the capital of the company can be any amount. Besides, the investor can divide it into any denomination.
- The investor can open a corporate bank account in a bank in Dubai if it is necessary.
- It’s a requirement to appoint a registered agent (consultants, auditors, legal firms). The company from the approved list of registered agents maintained by UAE Free Zone must do this.
- There’s a minimum number of shareholders and directors, which is one.
- The investor does not need to visit the authority in order to incorporate the company. Nonetheless, it is necessary to sign the documents at the registered agent’s office.
- Only in case of suspicion, some audited financials may be a requirement.
- It’s necessary to fully pay all shares when allocated. No bearer shares or differential classes of shares are permitted. However, it’s not a requirement to deposit the capital in a bank.
In any case, some additional documents could be necessary to set up an offshore company. And if you are not aware of the regulations and requirements, you can ask for professional guidance. Having a business setup partner with certified knowledge regarding the company incorporation process is useful for new investors.
2. Where can you set up an offshore company in the UAE?
In the UAE, you’ll be able to find three main locations in which you can open an offshore company. In the emirate of Dubai, you can set up an offshore company in JAFZA (Jebel Ali Free Zone). Other excellent choices can be found in RAK (Ras Al Khaimah) and Ajman. Let’s take a look at these options carefully.
2.1. JAFZA (Jebel Ali Free Zone Authority).
It’s the most popular and suitable place for setting up an offshore company. Since this location has one of the world’s biggest shipping ports, international companies can enjoy many benefits. For example, there’s a 15-year tax exemption from corporate tax. Besides, there are no import or export duties.
2.2. RAK (Ras Al Khaimah).
On the other hand, opening an offshore company in RAK can also benefit investors like you. This location is approximately an hour’s drive from Dubai. RAK possesses the highest level of industrialization in the country, which gave it a good reputation. Here you can find a business-friendly environment and very competitive costs.
2.3. Ajman Free Zone.
Although this option is not as popular as the previous ones, Ajman Free Zone is also a good choice. In 2014, this location authorized the offshore company formation for international businesses. Since then, Ajman has been offering favorable tax incentives and support services for investors and entrepreneurs. There are zero taxes and full confidentiality to the company.
Here you can learn about the company formation types available in Ajman Media City Free Zone (AMCFZ).
3. Reasons to start an offshore company in the UAE.
Setting up an offshore company in Dubai or any location in the UAE can bring you several advantages. Each of the available locations is attractive to many foreign investors who want to establish this kind of business. The main reason is related to the tax exemption they enjoy when operating an offshore business in the UAE.
However, offshore companies can also obtain support services and assistance to boost their businesses and be more profitable. Dubai is the most attractive of them all due to its international reputation. Therefore, it is the most popular among foreign entrepreneurs and investors. Let’s see other benefits you can enjoy with this company formation.
3.1. What benefits can you obtain with an offshore business in this country?
Among the most outstanding advantages that investors like you can obtain are the following ones:
- This company formation in the UAE permits 100 percent of foreign ownership.
- Also, it offers full tax and duty exemption (no corporate, income, VAT, inheritance, or property tax).
- Full repatriation of profits.
- There is no currency restriction, which means the company can use any currency as capital.
- Investors have better access to global funding.
- It is not a requirement to deposit the money in the offshore bank account.
- There’s the available option of purchasing real estate in approved areas.
- The capital requirement is minimal and the setup costs are low.
- Investors have access to a stable and business-friendly legal system.
- Offshore business is a gateway for international market expansion.
- Offshore companies enjoy the benefits of the DTAA (Double Taxation Avoidance Agreement) with 115 countries, including the UK.
- This company formation also provides a vehicle to protect or separate assets from operating entities, like Intellectual Property.
3.2. Information about the tax exemption system.
In many countries, taxes are the most unfavorable elements for almost all investors. In most cases, the tax system is basically “the better you do, the more you get taxed”. However, the UAE is one of those few countries in which you can operate a company without taxes. In other words, this country levies neither corporate taxes nor sales or inheritance taxes.
There are no personal taxes or property taxation, which is also an advantage for entrepreneurs. Nonetheless, some specific sectors are subject to taxation, which are banks and oil and gas producing companies. To summarize, having an offshore business in the UAE is a profitable idea.
Here you can learn about the webinar for free zones companies in the United Arab Emirates.
4. How can you set up your own offshore company in the UAE?
Like many other processes, the offshore company registration in UAE is a process that involves several steps. If you want to start operating this type of company, you’ll need to complete the following steps:
- Firstly, you must choose a suitable name for your company and verify it with the Registrar. However, there’s a list of words that it must not include, like insurance, fund, finance, bank, etc.
- Secondly, you have to fill your application form and submit some relevant documents, which we’ll see below.
- Thirdly, obtain the necessary approvals from the authorities. It’s necessary to draft in English the MOA and AOA (Memorandum of Association and Articles of Association).
- And lastly, you need to open an offshore bank account for your company. After this, you can start operating your business.
Here you can learn about the most common mistakes that you should avoid when starting a company in Dubai.
5. What documents will you need to establish your offshore business?
Since offshore companies can have an individual shareholder only or corporate shareholders, different documents are necessary for each case. For example, in the case of being an individual shareholder, these will be the required documents:
- Residential proof.
- An attested passport copy of the shareholder/owner.
- Details of the shareholder/owner.
- The original bank reference document.
- The activities of the new offshore company.
- Preferred name for the new company.
- The hierarchy of beneficiaries.
On the other hand, corporate shareholders will have to gather and submit the following documents:
- The Memorandum of Association.
- The hierarchy of beneficiaries.
- The Board Resolution.
- The parent company certificate, which has to mention the names of the shareholders/directors. Also, it needs to be duly attested.
Here you can learn about the Trading License and the General Trading License available in the UAE.
6. How much can cost to set up an offshore company in the UAE?
The process to register a new offshore company is simple and straightforward. Besides, it offers several advantages to all investors. Among those advantages, the cost for setting up a company is very low. For example, the Dubai offshore company cost is approximately USD 3,300, if it is the basic package. Other packages in Dubai cost around USD 4,000 and USD 5,000.
On the other hand, the offshore company formation in RAK costs approximately USD 1,600. This cost includes the formation process and annual fees. However, these numbers could vary depending on many elements. If you need more information, you can consult it with your setup business partner or the pertinent authorities.
Here you can learn about the UAE free zone labor regulations update regarding the COVID-19 pandemic.
7. How can Connectfz help you set up an offshore company in the UAE?
If you want to open an offshore business in the UAE, you can count on Connectfz to get started. With our services, you’ll be able to register your company in a matter of time without complications. Besides, you can request the different packages we offer to help you obtain a business license and visas.
On the other hand, if you already own a company in the UAE, we can help you upgrade it. You can request our many services to make different improvements. For example, with our HR consultancy services, you can make your HR department more efficient. In case you need more employees, you can request our recruitment or staff outsourcing services.
Would you like to contact Connectfz to obtain more information regarding the offshore company formation in the UAE? If you have any questions, call us on +97143316688. You can email us at firstname.lastname@example.org, and you will talk to one of our representatives who will answer your questions.