Offshore companies in Dubai are companies that are incorporated in a jurisdiction different from the one where it carries out its business activities or companies incorporated in offshore financial centers. Offshore companies what some call a tax haven, refer to this term in a country that exempts from tax foreign investors who have bank accounts or set up companies in its territory. At that make no economic or commercial activity and are termed non-resident companies. These companies are controlled by foreign enterprises or individuals that conduct their business in other parts of the world and use the tax haven only as a legal address of the company.
Offshore companies often fulfill the following purposes:
- International trading
- Holding company
- Shipping company
- Owning real estate
- Registering copyrights & patents
- International consulting services
Jurisdiction in UAE for an Offshore Company
The UAE has three principal jurisdictions that allow offshore company formation: https://highplanservices.com/offshore-company-setup/
- Jebel Ali Free Zone Authorities (JAFZA)
- Ras Al Khaimah (RAK)
- Ajman Free Zone
JAFZA Offshore Company Formation:
The creation of an offshore company in JAFZA needs to begin with the choice of a registered agent. This registered agent will be responsible for all administrative actions related to dealings with JAFZA.
Once you have registered your interest and selected a registered agent, it is the responsibility of the registered agent to conduct all communication on behalf of the company.
Please note, that JAFZA reserves the right to request any additional documentation that is deemed necessary. This will be communicated by the sales and registration team in person or via email.
RAK Offshore Company Formation:
In 2006, the Ras al Khaimah government introduced the International Company Structure, commonly referred to as the RAK Offshore Company. These entities operate by the regulatory oversight outlined in the Ras Al Khaimah Free Trade Zone Authority International Companies Regulations of 2006.
RAK Offshore companies necessitate a minimum of one shareholder, with the provision for corporate shareholders. In the case of international corporate shareholders, attested company documents are required. A minimum of one director is mandatory, and while corporate directors are not allowed, the details of directors are not publicly registered.
Every RAK offshore company must appoint a secretary, and the role can be fulfilled by a company director. There are no stipulated minimum share capital requirements in RAK.
For compliance, RAK offshore companies must maintain accounting records for up to seven years from their preparation. Notably, these accounts are not required to be filed with RAK authorities.
AJMAN Offshore Company Formation:
Founded in 1988, the Ajman Free Zone attained autonomous status through Emiri Decree No. 3 of 1996, courtesy of Humaid Bin Rashid Al Nuami, the Ruler of Ajman. Over recent years, there has been a notable upswing in company formations within the Ajman Free Zone. The initiation of offshore company establishment in Ajman, however, is a relatively recent development, commencing in 2014. Governed by the Ajman Free Zone Authority, the Ajman Offshore Company has swiftly emerged as a preferred choice for offshore business setups. Similar to other offshore jurisdictions, Ajman Offshore provides a zero-tax structure, ensuring confidentiality and privacy. Furthermore, it offers a variety of unique advantages to attract investors and entrepreneurs.
Regulations for the offshore company in UAE
- Offshore companies are typically established for specific business activities, and the nature of these activities is defined during the registration process. Companies must ensure that their operations align with the approved business activities.
- Offshore companies in Dubai can take various legal structures, including a Free Zone Company (FZC), a Free Zone Establishment (FZE), or a Branch Office, depending on the specific requirements of the business.
- The regulations allow for 100% foreign ownership of offshore companies, providing an attractive option for international investors.
- Minimum and maximum share capital requirements may vary depending on the chosen free zone.
- Offshore companies are required to have a registered office within the chosen free zone. This serves as the official address for correspondence.
- Offshore companies must comply with the regulations and laws of the UAE, including anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.
- Regular reporting and compliance with financial regulations are typically required.
- Offshore companies are often required to maintain bank accounts in the UAE to facilitate business transactions.
- Adherence to financial regulations and transparency in financial reporting are essential.
- While offshore companies are not generally eligible for UAE residency visas, the option may be available for key personnel or investors, subject to specific regulations.
- Offshore companies are required to renew their licenses annually by paying renewal fees. It is important to stay compliant with all regulatory requirements to avoid penalties.
- Protecting intellectual property rights is crucial. Companies should be aware of and comply with regulations related to trademarks, copyrights, and patents.
- Depending on the free zone, the legal jurisdiction governing offshore companies may differ.
Benefits of an Offshore Company in UAE
Registering an offshore company in Dubai offers a myriad of advantages for foreign entities. Some key benefits of opting for an offshore corporate structure include:
- Offshore companies provide foreign entities with a strategic entry point for expanding into international markets, leveraging Dubai’s global connectivity.
- Dubai offers a stable business environment and access to an economically friendly legal system, providing a secure foundation for offshore operations.
- Offshore companies in Dubai benefit from a regulatory framework that is adaptable to diverse business needs, allowing for flexibility in operations.
- Enjoying tax neutrality on international earnings is a significant advantage. This includes exemptions from personal or company income taxes, capital gains taxes, and inheritance taxes (depending on the chosen jurisdiction).
- Registering an offshore company in Dubai enhances access to global funding sources, facilitating financial support for business expansion and development.
- Offshore structures enable the separation and protection of assets, including intellectual property, from the operational entities. This safeguards valuable assets from potential risks.