The United Arab Emirates (UAE) has grown at a rapid speed to become the global business hub. It is one of the main commercial centres in the Middle East, allowing access to international markets stretching across Asia, Europe, and Africa. It is known for its diverse economy, robust and strong legal system, and the available variety of activities that make it a great place for any business.
An offshore company is a legally registered business, but it is not allowed to conduct any sort of business within the country it was incorporated in. Such types of companies are increasingly becoming popular because they offer tax breaks, privacy, and asset protection, among other benefits.
What is an offshore company in Dubai, UAE?
A Dubai offshore company is an entity owned by individuals or corporate entities that does not undertake any business activities in the country of registration. Also known as a non-resident company, it is not eligible to open a physical office in the UAE.
These companies are registered under low tax jurisdiction laws to facilitate better wealth management and minimise tax liabilities legally. The question then arises: why do offshore companies choose to register in the UAE? Some of the main reasons include complete confidentiality regarding financial matters, an opportunity to gain revenue with no external interference, and tax optimisation.
Benefits of Setting Up an Offshore Company in the UAE
- Privacy and confidentiality: An offshore company in the UAE offers privacy and confidentiality. This makes offshore companies exceptionally desirable to investors who wish to be anonymous. It also provides maximum asset protection, and this is so because a UAE offshore company offers an opportunity to conduct business and protect one’s assets outside their local country from possible legal actions and creditors.
- Tax optimisation: One of the primary reasons for establishing an offshore company in the UAE is due to its extremely favourable tax environment. An offshore company is exempt from any personal or corporate tax if it meets the specified criteria.
Easy company registration: It offers minimum paperwork, ensuring the registration and incorporation of the business entity to be smooth and hassle-free. - Flexibility of management: It provides flexible management wherein one can adapt the operation and governance of the company according to the requirements and preferences of a business.
- Global market access: Offshore companies in the UAE are permitted to operate at an international level. It grants access to new markets and the capability to grow the business reach all over the world.
Which jurisdictions establish an offshore company in the UAE?
Offshore companies in the UAE are established in various approved free zones, including:
1. RAK International Corporate Centre (RAK ICC)
It is located in Ras Al Khaimah and appears to be one of the more prominent destinations for investors trying to set up an offshore company in the UAE. The business services include company registration, registered office services, and corporate administration.
2. Jebel Ali Free Zone Authority (JAFZA)
JAFZA is known as an integrated business hub. It is the flagship free zone for a vast number of sectors such as electronics, logistics, e-commerce, food and agriculture, etc.
3. Ajman Free Zone (AFZ)
Established in 1988 in Ajman, AFZ has turned into a dynamic and autonomous ecosystem imparting sustainability to entrepreneurs and companies to grow and develop their businesses at a faster pace.
Documents Required to Start an Offshore Company in the UAE
The documents required to secure the successful registration of your offshore company in the UAE include, but are not limited to:
- A comprehensive business plan
- Proof of address
- Bank statement as proof of financial solvency
- Passport copies of all shareholders
Challenges Associated with Setting Up an Offshore Company in the UAE
- Extra due diligence is required for opening a corporate bank account and is usually a challenging process.
- Restricted access to conventional funding sources
- Offshore companies cannot conduct business within the UAE or its free zones.
- Among the activities that an offshore company cannot engage in include banking, insurance, and financial activities.
- An offshore company can acquire and invest in real estate in the UAE, but only in the areas allowed by the government.
Conclusion
There are a number of key advantages to forming an offshore company in the UAE if you are looking to grow your business worldwide. Carefully considering the various factors discussed in this blog and taking expert advice will help you through the setup process and will allow you to gain the maximum benefit from operating in this dynamic business hub. At Gatestone Group, our commitment is toward assisting businesses on their offshore business journey. Contact us today to find out more via email at [email protected] or call +971 52 410 0849 or +971 4 450 1023.
