Dubai offshore company in 2023
Opening a Dubai offshore business is an ideal, tax efficient and cost effective corporate structure for entrepreneurs who wish to conduct international trade.
An offshore entity can also be referred to as a non-resident “paper” company that allows foreign entrepreneurs to serve Africa and the Middle East without administrative obligations. Consequently, an offshore business is simply a wholly owned LLC which is legally tax exempt and has no annual accounting and tax obligations.
- Offshore companies are used for i) international trading ii) holding company iii) shipping company iv) owning real estate v) registering copyright and patents and vi) international consulting services;
- An offshore Dubai company formation is ruled by the Jebel Ali Free Zone Offshore Companies Regulations 2003.
Advantages of a Dubai offshore entity
- An offshore company is quick and simple to set up in Dubai, particularly when compared to 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 business setup in Dubai is legally exempt from corporate tax, making it an ideal international trading vehicle;
- The shareholders and directors in the off-shore 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 business 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 banks, Governments, suppliers and investors.
Disadvantages of a Dubai offshore entity
- A Dubai offshore entity is not allowed to trade in Dubai and the UAE;
- The offshore entity can neither i) rent local premises in the UAE ii) nor employ staff in the UAE iii) nor secure residence or work visa for staff;
- Compared to other tax neutral entities, incorporating an offshore company in Dubai can be expensive;
- Dubai banks provide poor customer service support;
- The offshore business cannot use UAE’s double taxation treaties to reduce global withholding tax;
- A Dubai offshore business cannot invest in UAE real estate.
Other options for Dubai
Apart from incorporating an offshore company in Dubai, entrepreneurs have the following options for operating their business in the Middle East:
A comparison between UAE offshore companies
There are three different options when registering an offshore company in the UAE: Jebel Ali in Dubai, Ajman and Ras Al Khaimah (RAK).
Both Ajman and RAK offshore companies can be used to conduct international trading outside of the UAE, holding companies and estate planning and asset protection vehicles. Both are also low cost options to setup an international business companies when compared to costs to register 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 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.
| Jebel Ali offshore company | RAK offshore company | Ajman offshore company |
|
|---|---|---|---|
| Summary at a Glance | US$ | US$ | US$ |
| Total company set up costs | US$17,400 | US$15,401 | US$12,670 |
| Subsequent annual costs | US$7,550 | 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$17,400 | US$26,750 | US$12,670 |
| Draft Invoice | View invoice PDF | View invoice PDF | View invoice PDF |
Check out offshore company formation for other offshore jurisdictions
