UAE offshore: The cheaper option
There are three offshore options in the UAE: incorporating a i) Dubai offshore company in Jebel Ali ii) RAK offshore company and most recently iii) the Ajman offshore company. An offshore company in UAE is an ideal, tax efficient and cost effective corporate structure for entrepreneurs who wish to conduct international trade..
Advantages of a UAE offshore entity
- An offshore company is quick and simple way to set up in the UAE, particularly when compared with other business entities. Offshore companies in UAE i) can be fully incorporated within 1 week ii) can be 100% foreign-owned and iii) will not require our Client to travel to complete the incorporation procedures;
- An offshore company in UAE portrays a good image to Clients, suppliers and even potential venture capitalists. UAE is a globally-recognised jurisdiction which does not carry any ‘tax haven’ stigma as other jurisdictions do;
- If properly structured, an offshore business setup in UAE is legally exempt from corporate tax, making it an ideal international trading vehicle;
- A UAE offshore business set up is confidential. There is no public register of shareholders and directors;
- UAE offshore companies can have a corporate bank account within the UAE;
- UAE offshore companies can hold shares in other UAE offshore or Free Zone Companies. UAE offshore companies will also be able to trade with other UAE offshore companies, but not with free zones;
- UAE documents are bilingual (English and Arabic), thus recognizable globally by banks, Governments, suppliers and investors.
Disadvantages of a UAE offshore entity
- A UAE offshore entity is not allowed to trade within UAE, enjoy UAE tax treaty benefits or buy real estate;
- A UAE offshore entity cannot i) rent local premises in the UAE ii) employ staff under the company’s name or iii) apply for any visa;
- UAE local banks provide poor customer service support.
Best uses of each UAE offshore company
- A UAE offshore entity is a non-resident “paper” company that allows foreign entrepreneurs to serve Africa and the Middle East without any administrative obligations;
- It is the ideal vehicle to use for investment holding, asset protection and international estate planning;
- The following is an overview of the 3 different offshore options, which can help you decide which is the best corporate structure to fulfil your international business objectives.
The Jebel Ali offshore company in Dubai
- An offshore Dubai company formation is ruled by the Jebel Ali Free Zone Offshore Companies Regulations 2003;
- A Jebel Ali offshore company can be 100% foreign owned;
- Compared to other tax haven entities, incorporating an offshore setup in Dubai can be expensive. Before a Jebel Ali offshore company is incorporated, legal documents must be legalized by the Client. After being formally engaged by our Client, Healy Consultants will provide with a detailed list of documents that needs to be legalized;
- Jebel Ali Offshore companies have business activity restrictions. A Jebel Ali offshore company cannot conduct activities related to i) insurance ii) movie production iii) banking iv) management v) financial vi) gambling vii) professional Services viii) casino ix) consulting x) property development xi) intellectual property xii) education xiii) media xiv) advisory xv) security xvi) real estate xvii) publishing xviii) military and xix) advertising. Jebel Ali Authority has the right to add any other activity under this list. The registrar is the final authority to accept or reject a company registration;
- A Jebel Ali offshore company needs to appoint a minimum of two directors, one shareholder and one company secretary. The director can also act as the company secretary.
RAK offshore company
- RAK offshore is a part of the RAK Investment Authority, which to date has successfully formed more than 2,000 offshore companies. Companies located in this region will enjoy a tax-free environment;
- RAK company registration is an excellent and cheaper alternative to the Dubai offshore company. A RAK offshore company i) does not face restrictions on business activities and ii) does not need legalization of documents;
- A RAK offshore company can be i) 100% foreign owned ii) incorporated within 1 week with only one director and one shareholder. Also, there are no public registers of directors or shareholders.
Ajman offshore company
- The Ajman offshore entity or recently renamed the Ajman International Business Company is regulated by the Ajman Free Zone Authority. Similar to other IBCs globally, the Ajman IBCs also enjoys exemption on corporate income tax for business conducted internationally;
- The Ajman IBC can be i) 100% foreign owned ii) incorporated within 1 week with only one director and one shareholder and iii) is not required to submit financial statements nor audit its accounts.
UAE offshore comparison table
If your company is planning to conduct business within the UAE , there are other options you may want to consider such as
Free zone companies
Frequently asked questions
How can I register a tax free UAE offshore business?In order to incorporate a UAE offshore business setup, our Clients will be required to i) reserve the business name ii) prepare the incorporation documents iii) submit the minimum initial share capital iv) appoint a resident director v) register a UAE offshore business address vi) notarize the documents and vii) register for tax and business license.
How many shareholders are required for an offshore company in UAE?Only 1 shareholder is required for starting an offshore company in UAE.