Dubai offshore company formation guide for 2024
Forming an offshore company in Dubai is an ideal, tax efficient and cost-effective corporate structure for entrepreneurs & businesses who wish to conduct international trade from the Middle East.
What is an offshore company in Dubai?
A Dubai offshore company is simply a wholly owned Dubai LLC which is legally tax exempt and has no annual accounting and tax filing obligations. An offshore company in Dubai can also be referred to as a non-resident “paper” company that allows foreign entrepreneurs & businesses to serve Africa and the Middle East without administrative obligations.
Interested in forming a Dubai offshore company? We will help you with your business setup.
What is special about Dubai offshore companies?
- Location: An offshore company in Dubai is set up outside the mainland of the UAE, usually in a free zone known as the Dubai Offshore Zone. The three principal jurisdictions offering offshore companies in the UAE are Ras Al Khaimah (RAK), Ajman Free Zone and the Jebel Ali Free Zone (JAFZA)
- Business activities: Dubai offshore companies are used for i) forming an international trading company in Dubai for international businessii) setting up a Dubai holding company for holding assets iii) setting up a Dubai shipping company iv) setting up a Dubai IP holding company for managing copyright and patents and v) setting up international consulting services in Dubai. Dubai offshore companies are not allowed to conduct business within the UAE.
- Ownership: Dubai offshore companies usually have a minimum requirement for the number of company directors and company shareholders, and these individuals can be of any nationality.
- Offshore privacy: Offshore companies in Dubai are designed to provide a robust privacy shield. They ensure that the identities of directors and shareholders remain undisclosed. This feature makes them an attractive option for those seeking confidentiality.
- Regulations: An offshore Dubai company is ruled by one of these registries i) JAFZA Offshore Companies Regulations, ii) RAK ICC Business Companies Regulations 2018 iii) AJMAN Free Zone
- Taxation and exemptions: Offshore companies in Dubai are exempt from local taxes, including income taxes and corporate taxes.
- Corporate banking: Dubai Offshore companies can open corporate bank accounts in Dubai for their international transactions. However, they may face restrictions on local banking.
Advantages of forming a Dubai offshore company
- An offshore company is quick and simple to set up in Dubai, particularly when compared to setting up other business types in the UAE;
- An offshore company in Dubai portrays a good image to Clients, suppliers, and even potential venture capitalists. Dubai is a globally-recognised jurisdiction which does not carry a ‘tax neutral jurisdiction’ stigma;
- If properly structured, an offshore company in Dubai is legally exempt from Dubai corporate tax, making it an ideal international trading vehicle;
- The shareholders and directors in the Dubai offshore company will not be required to register their names and details for public record;
- In Dubai, an offshore company is exempt from all annual accounting and tax obligations;
- Compared to other tax neutral entities, setting up an offshore company is a cheap and easy way to get a corporate bank account in Dubai;
- Dubai company documents are bilingual (English and Arabic), thus recognizable globally by the banks, Governments, suppliers and investors.
Disadvantages of an offshore company in Dubai
- A Dubai offshore company is not allowed to trade within Dubai and in any other Emirate in the UAE;
- The Dubai offshore company can neither i) rent local premises in the UAE ii) nor employ staff in the UAE iii) nor secure residence or work visa for the employees;
- Compared to other tax neutral entities, forming an offshore company in Dubai can be expensive;
- Dubai banks may not provide the required customer service for the offshore companies;
- The offshore company in Dubai cannot use UAE’s double taxation agreements to reduce global withholding tax in the UAE;
- A Dubai offshore company cannot invest in the UAE real estate.
What are the required steps to form an offshore company in Dubai?
The following are the required steps for setting up a Dubai offshore company in JAFZA or RAKICC or AFZ with professional assistance from Healy Consultants Group.
- Step 1: Start by discussing your business needs with Healy Consultants Group. We will help you choose the right location for your offshore company in Dubai.
- Step 2: We will guide you through the shareholder requirements. The Dubai offshore company can be formed with at least one shareholder, who can be either an individual or a company.
- Step 3: We will guide you through the process of understanding the company director requirements. An offshore company in Dubai requires a minimum of one director.
- Step 4: With our assistance, prepare your company’s Memorandum and Articles of Association.
- Step 5: We will explain the requirements for a registered office. A Dubai offshore company may not need a physical presence in the UAE but requires a registered office address and a registered agent.
- Step 6: We will provide advice on the capital requirements for your offshore company.
- Step 7: As part of the company formation, we will collect the required personal ID documents to complete our due diligence and application submission to Dubai Government.
- Step 8: Finally, we will guide you through the procedure of opening a corporate bank account for your Dubai offshore company.
Remember, these are just the basic steps. We at Healy Consultants Group will guide you through the entire Dubai offshore company set up process, ensuring that all requirements are met and that the process goes smoothly. Ready to start? Reach out to us today! We’re here to help.
How much does it cost to form an offshore company in Dubai?
US$ 22,393 (~AED 82,235) is the total cost for forming a Dubai offshore company in Jebel Ali (JAFZA) by Healy Consultants Group. This cost includes offshore company formation fees, project management fees, company secretary and registered office fees, Government registration fees, Dubai corporate bank account opening fees, economic substance & UBO declaration fees and corporate tax registration fees.
Cost for forming a Dubai offshore company in Jebel Ali (JAFZA) by Healy Consultants Group in a table format:
| Cost of Dubai offshore company formation in JAFZA | Cost in USD (~AED) |
|---|---|
| Dubai offshore company formation fees | US$ 6,750 (~AED 24,788) |
| Dubai company secretary and legal registered office fees | US$ 1,200 (~AED 4,407) |
| Estimated Dubai Government registration fees | US$ 1,550 (~AED 5,692) |
| Dubai corporate bank account opening fees | US$ 6,950 (~AED 25,523) |
| Annual UAE Economic Substance and UBO declaration filing | US$ 750 (~AED 2,755) |
| UAE corporate tax registration fees | US$ 1,250 (~AED 4,590) |
| Project management fees | US$ 2,950 (~AED 10,833) |
| UAE VAT (5%) | US$ 993 (~AED 3,647) |
| Total cost of Dubai offshore company formation in JAFZA | US$ 22,393 (~AED 82,235) |
The cost of forming offshore companies in RAK and Ajman will be US$ 16,714 (~AED 61,379) and US$12,670 (~ AED 46,600) respectively.
The table below contains the total costs and draft invoices of different types of offshore companies that can be formed in Dubai.
| Different types of UAE offshore companies | Offshore company setup cost in US$ | Draft Invoice |
|---|---|---|
| Jebel Ali - Dubai offshore company formation | US$22,393 | View invoice PDF |
| RAK offshore company formation | US$16,714 | View invoice PDF |
| Ajman offshore company formation | US$12,670 | View invoice PDF |
A comparison between different UAE offshore companies
There are three different options for forming an offshore company in the UAE: Jebel Ali offshore company set up in Dubai, Ajman offshore company setup and Ras Al Khaimah (RAK) offshore company setup.
Both Ajman and RAK offshore companies can be used for conducting international trading outside of the UAE, holding companies, estate planning and asset protection vehicles. Ajman and RAK are also low-cost options to setup international business companies when compared to costs to forming a Jebel Ali offshore company.
While the incorporation process, timeframe and requirements to register an Ajman offshore company is much easier, generally our preferred option is the RAK offshore company as the free trade zone is much more established and well known to international entrepreneurs. Furthermore, an added advantage is that a RAK offshore company also allows to maintain a registered office in Dubai. Refer to the below table to view a detailed comparison.
| Dubai offshore company formation options | Jebel Ali offshore company | RAK offshore company | Ajman offshore company |
|---|---|---|---|
| Total company set up costs | US$22,393 | US$16,714 | US$12,670 |
| Subsequent annual costs | US$10,143 | US$5,551 | US$3,200 |
| Type of company | LLC | LLC | LLC |
| How long to set the company up? | 2 weeks | 2 weeks | 2 weeks |
| How long to open company bank account? | 5 weeks | 5 weeks | 5 weeks |
| Issued share capital required | US$1 | US$1 | US$1 |
| Any restriction on activities? | Yes | No | No |
| Corporate bank account in the UAE? | Yes | Yes | Yes |
| Tenancy agreement required before incorporation? | No | No | No |
| Do you visit the country for company incorporation? | No | No | No |
| 100% foreign ownership allowed | Yes | Yes | Yes |
| Resident director or shareholder required? | No | No | No |
| Can conduct business within the UAE? | No | No | No |
| Legal registered office needed? | Yes | Yes | Yes |
| Can rent office premises | No | No | No |
| Can the entity hire expatriate staff? | No | No | No |
| Bearer shares allowed? | No | Yes | No |
| Documents to be legalized by Client | Yes | No | Yes |
| Can invest in UAE real estate | No | No | Yes |
| Legal considerations | |||
| Minimum number of directors | 2 | 1 | 1 |
| Corporate director allowed? | No | Yes | Yes |
| Minimum number of shareholders | 1 | 1 | 1 |
| Company secretary needed? | Yes | No | Yes |
| Resident company secretary? | No | No | Yes |
| Corporate company secretary allowed? | No | Yes | Yes |
| Individual shareholders allowed | Yes | Yes | Yes |
| Corporate shareholders allowed | Yes | Yes | Yes |
| Public register of shareholders and directors | No | No | No |
| Tax and accounting considerations | |||
| Annual accounting and tax obligations | No | No | No |
| Corporate tax payable (if non-resident) | No | No | No |
| Accounting records to be kept? | Yes | Yes | Yes |
| Statutory audit required | Yes | No | Yes |
| Annual tax return to be submitted | No | No | Yes |
| Can access double tax treaties | No | No | No |
| Can apply for immigration visas | No | No | No |
| Estimated of total engagement costs in Year 1 | US$22,393 | US$16,714 | US$12,670 |
| Draft Invoice | View invoice PDF | View invoice PDF | View invoice PDF |
Other options for forming a company in Dubai
Apart from forming an offshore company in Dubai, business owners have the following options for operating their companies in the Middle East:
Check out offshore company formation for other offshore jurisdictions
