Understanding Offshore Company Formation
Offshore companies are established in jurisdictions unrelated to the original location or business activity of a company. They are considered separate from mainland laws and carry out their own specialised legislation within the free zones.
Jebel Ali Free Zone (JAFZA), Ras Al Khaimah International Corporate Centre (RAK ICC), and Ajman Free Zone (AFZ) are well-known jurisdictions 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
Challenges of Setting Up an Offshore Company in the UAE
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
Offshore Jurisdictions in the UAE
1. Jebel Ali Free Zone (JAFZA)
Jebel Ali Free Zone (JAFZA), established in 1985 as the first free zone in the region, currently has multiple international and local businesses set up within the zone. JAFZA is located in Jebel Ali, which is just beside the world’s largest shipping port, also known as Jebel Ali Port.
Key features of a JAFZA 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 10 years, starting from the date of preparation. An approved auditor must be appointed (from the appointed list of auditors) who examines and reports on the accounts of the company.
A physical office is not required.
How do I register an offshore company with JAFZA?
The process to set up an offshore company in JAFZA involves one or more individuals signing and delivering the application for the certificate of incorporation to the registrar. This initiates the formation of an offshore company with limited liability. Gatestone Group will assist you in the application procedure for an offshore company formation in JAFZA, which includes:
- Select the name of the company that ends with the word ‘limited.
- Registered address of the company
- Select the business activity and structure while stating that if the company intends to engage in lawful activity or act, then it would be under the regulations stated by JAFZA.
- Share capital, the number of shares, and the par value of the shares of the company
- Full name and address of each of the shareholders and directors
- Prepare a Memorandum and Articles of Association.
- Any other requirements by the registrar
Types of permitted activities for offshore companies in JAFZA
- International trade
- Formation of holding companies
- Owning real estate
- Registration of copyrights and patents
- International consulting services
2. 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)
3. Ajman Free Zone
Ajman Free Zone (AFZ), established in 1988 and regulated by the Ajman Free Zone Authority (AFZA), launched the offshore company formation service in 2014. Ajman is a strategic location that has easy access to the international market through air, land, and sea. It is also known as an economical option that requires minimum initial expenses with competitive registration and company formation fees. However, the investors need to note that an offshore company in AFZ can only be established through a registered agent.
Key features of the Ajman Free Zone Offshore Company
- Minimum requirement of one director with the restriction of not having more than five directors
- An individual can be the shareholder and director of an offshore company.
- The shareholders can invest in other UAE companies.
- Requirement of a company secretary
- Appoint a registered agent to establish the offshore company.
- Requirement to maintain a registered office address. This can be the address of the registered agent of a company like Gatestone Group.
- Restriction on carrying out any offshore business activity inside the UAE
- Easy corporate bank account opening
- Compliance with Economic Substance Regulations (ESR) obligations is mandatory.
- Ajman Freezone offshore companies cannot use certain words in their trade names, such as shipping business, holding company business, banking business, etc.
How do I register an offshore company in the Ajman Free Zone (AFZ)?
Gatestone Group will assist you in the application procedure for an offshore company formation in the Ajman Free Zone (AFZ), which includes:
- Selecting the name of the company
- Selecting the full name and address of each of the shareholders and directors
- Preparing a Memorandum and Articles of Association
- Any other requirements by the registrar
Types of permitted activities for offshore companies in the Ajman Free Zone
- Holding company
- General trading
- Professional services
- International services
- Currencies and monetary brokers
- Financial instrument bidding
- Financial investments
- Financial investment consultancies
- Commodities trading
- Investments
- Shipping and ship management
- Advisory and consulting services
- Property owning
- Brokerage
- Credit and finance bank
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.
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.