Understanding Offshore Company Formation
Offshore companies are established in jurisdictions unrelated to the original location or business activity of a company. In the United Arab Emirates (UAE), a designated free zone with separate laws and regulations that has a registered business activity is known as an offshore company. They are considered separate from mainland laws and carry out their own specialised legislation within the free zones.
Ras Al Khaimah International Corporate Centre (RAK ICC is a well-known jurisdiction for establishing an offshore company.
Offshore companies are established to target international business activities, and such a company cannot conduct business or carry out business operations in the UAE. Offshore companies have a set of compliances and regulations of their own that need to be followed to avoid any challenges or fines.
Benefits of Offshore Companies in the UAE
- Tax optimisation including exemptions from Corporate Tax (CT) and Value-Added Tax (VAT)
- 100% foreign ownership allowing the exemption of needing a local sponsor to set up your business
- Easier company formation processes
- Multiple company structures are available
- Asset protection and privacy
- Enabling international market expansion possibilities and utilising the offshore company to reach greater opportunities
- Hold multi-currency bank accounts in the UAE for international transactions
- Transparency and compliance to the global standards regulations
- Common law regulations with independent judicial system
Business Activities Available in RAK ICC Companies
- Worldwide investments and global trade
- Corporate restructuring and redomiciliations
- Wealth management and succession planning
- International tax planning
- Structured finance transactions
- Securitizations and ring-fencing assets
- Ownership of real estate properties and assets
- Holding structures and special
- Purpose vehicles
- Estate planning and asset protection
Challenges of Setting Up an Offshore Company in the UAE
- Not suitable for all businesses
- Different regulations and reporting requirements of the selected offshore free zone need to be understood and practiced
- Not all businesses are eligible to set up an offshore company
- Having a physical presence in the chosen offshore zone is a requirement
- It is essential to adhere to compliance and reporting regulations and requirements
- Offshore companies are not allowed to conduct business inside the UAE. Thus, requiring a separate mainland company for operations within the UAE
- Challenging bank account opening procedures as the banks are doing extra due diligence
- Anti-money laundering and record-keeping are usually done excessively for offshore companies
With these challenges, it is vital to have experts like Gatestone Group on board to assist you in dissolving the complexities of setting up an offshore company.
Uses of Offshore Companies in the UAE
- International trade
- Formation of holding companies
- Owning real estate
- Registration of copyrights and patents
- International consulting services
Offshore Jurisdictions in the UAE
RAK International Corporate Center (RAK ICC) is known to be one of the most cost-effective options, with specialised activities including maritime and technology. With Ras Al Khaimah having the largest percentage of industrialisation in the UAE, RAK ICC has become an evident choice for numerous investors to set up a company. The RAK government launched the RAK offshore company structure under the regulation of the Ras Al Khaimah Free Trade Zone Authority International Companies Regulations 2006.
Key features of a RAK ICC offshore company
- Minimum requirement of one shareholder with the eligibility of having corporate shareholders
- Minimum requirement of two directors with the restriction of not having corporate directors,
- Directors are not listed on the public register.
- Requirement of a company secretary
- A minimum paid-up share capital is not required.
- Requirement of keeping accounting records for the last 7 years, starting from the date of preparation
- RAK ICC offshore companies are not allowed to use words such as imperial, insurance, municipal, Chamber of Commerce, chartered, co-operative, assurance, bank, building society, fund, mutual fund, royal, and trust.
- Office address is required
- Ultimate Beneficial Owners (UBO) of the offshore company is required
- It is mandatory to comply with the Economic Substance Regulations (ESR) obligations
- Provides a variety of legal structure options
RAK International Corporate Center (RAK ICC)
RAK International Corporate Center (RAK ICC) is known to be one of the most cost-effective options, with specialised activities including maritime and technology. With Ras Al Khaimah having the largest percentage of industrialisation in the UAE, RAK ICC has become an evident choice for numerous investors to set up a company. The RAK government launched the RAK offshore company structure under the regulation of the Ras Al Khaimah Free Trade Zone Authority International Companies Regulations 2006.
Key features of a RAK ICC offshore company
- Minimum requirement of one shareholder with the eligibility of having corporate shareholders
- Minimum requirement of two directors with the restriction of not having corporate directors,
- Directors are not listed on the public register.
- Requirement of a company secretary
- A minimum paid-up share capital is not required.
- Requirement of keeping accounting records for the last 7 years, starting from the date of preparation
- RAK ICC offshore companies are not allowed to use words such as imperial, insurance, municipal, Chamber of Commerce, chartered, co-operative, assurance, bank, building society, fund, mutual fund, royal, and trust.
- An office address is required.
- Ultimate Beneficial Owners (UBO) of the offshore company are required.
- It is mandatory to comply with the Economic Substance Regulations (ESR) obligations.
- Provides a variety of legal structure options.
How do I register an offshore company with RAK ICC?
Gatestone Group will assist you in the application procedure for offshore company formation in RAK ICC, which includes:
- Select the name of the company that ends with the words ‘limited’ or ‘incorporated’.
- Registered address of the company. This can be the address of the registered agent of a company like Gatestone Group.
- Select the business activity and structure.
- Share capital, the number of shares, and the par value of the shares of the company
Types of offshore company structures in the RAK ICC
- Company Limited by Shares (CLS): This includes holding companies, special purpose vehicles (SPVs), joint ventures (JVs), international business companies, project companies, and family offices.
- Segregated Portfolio Company (SPC)
- Company Limited by Guarantee (CLG)
- Unlimited Company (UC)
RAK ICC Foundation
RAK ICC Foundation, governed by the RAK ICC Foundations Regulations 2019, is a corporate body that is legally different that its Founder(s) registered at RAK ICC. It is provisioned that a Foundation established by a Founder dedicates certain assets towards specified charitable or non-charitable purposes.
RAK ICC Foundation Advantages
- Governance
- Perpetual concept
- Flexibility with a beneficial class
What is the Foundation used for?
- Enhanced succession planning and asset protection
- Provide a robust governance structure
- Guardian oversight
- A unique legal personality that outlive the Founder’s lifetime and separates liability while retaining control over assets
Choosing the Right Partner for Offshore Company Formation
Unlock the possibilities of a strategic business presence in the United Arab Emirates (UAE) through Gatestone Group’s Offshore Company Formation services. Discover the many advantages of business incorporation in Offshore jurisdiction.
Our expert team will assist and guide you and familiarise you with the specific UAE offshore regulations to start smooth and efficient company formation procedures.
Elevate Your Global Business Presence with Gatestone Group's Offshore Company Formation Services
The offshore company formation experts at Gatestone Group are ready to assist you in guiding you through a seamless and efficient offshore company formation process, while ensuring compliance with the regulatory standards. Trust Gatestone Group to be your gateway to a robust offshore business presence. Begin your offshore journey with us today!
FAQs
Companies with international trade, holding assets, attracting foreign investment, or seeking tax optimisation often find significant advantages in the offshore framework.
No, it is not permitted to conduct your business in the UAE with an offshore company. Offshore companies are primarily intended for international activities and trade. Domestic business within the UAE requires a mainland company license.
The permitted company structures for offshore companies are:
- Limited liability companies (LLCs)
- Limited companies
- Limited partnerships
No. UAE resident visas are only offered to free zone and onshore companies.
Required documents typically include passports, proof of address, business activity details, and bank references. Specific requirements may vary depending on the chosen jurisdiction.
The minimum capital requirement in RAK ICC is USD 100 (or equivalent in any currency).
The RAK ICC Foundation Council must have a minimum of two members.