Everything You Need to Know About Offshore Company Formation in the UAE
Overseas investors opt for offshore company formation in the UAE to have the benefits of international trading, investment protection via holding cost, tax planning, and holding real estate properties with absolute confidentiality. The law allows protecting the identity of the owners and the 100% repatriation of profits is allowed.
Offshore company formation in the UAE has been a preferred form of business setup for investors seeking tax benefits by capitalizing on global markets and for the investor who wishes to conduct its business activities outside the UAE. Entrepreneurs or big corporate entities set up offshore companies in the UAE with the sole aim of bolstering the investors’ wealth management and asset protection. Offshore companies in the UAE are not provided with a business license, but they are issued with a certificate of incorporation.
Salient Features of Offshore Company Formation in the UAE
- Offshore companies can have a non-UAE or UAE resident, as its director or shareholder
- Investors can have UAE or worldwide deposits and bank accounts
- A special license is required to perform banking and insurance activities
- No need to set up a physical office in the UAE
- Offshore companies are not required to conduct business within the UAE
- UAE residency visa not required
Offshore Company Formation in 3 Different Jurisdictions in the UAE
Foreign investors who are seeking offshore company formation in the UAE can set up their businesses in three jurisdictions i.e JAFZA, RAKICC and Ajman Offshore. The investors can avail of the benefits of each jurisdiction but business setup consultants in the UAE recommend to analyse each of them before starting an offshore company.
a) Offshore Company Formation in Dubai
The Jebel Ali Free Zone is the only free zone in Dubai that offers offshore company formation in Dubai. The offshore company formation is regulated by the Jebel Ali Free Zone Authority (JAFZA). Foreign investors seeking offshore company formation in Dubai choose the Jebel Ali Free Zone to conduct business outside the UAE or purchase freehold real estate properties in Dubai.
A minimum of one shareholder is required to open a company in JAFZA. Corporate shareholders are permitted and the shareholders will decide the capital structure of the Company. No fiscal minimum capital requirements have been stipulated, but bearer shares are not permitted. Different classes of shares are not permitted and shares have to be fully paid when allotted.
b) Offshore Company Formation in Ras Al Khaimah
The offshore company setup was launched in Ras Al Khaimah in 2007 by the RAK Investment Authority. The RAK offshore company formation is comparatively more flexible and cost-effective.
The RAK Offshore company formation requires a minimum of one shareholder and corporate shareholders are allowed. Shareholders will decide the capital structure of the Company. Whilst there is no minimum share capital requirements but, the value of each share must be AED 1,000. Bearer shares are not permitted. Different classes of shares are permitted and shares have to be fully paid when allotted.
c) Offshore Company Formation in Ajman
The Ajman Free Zone Authority (AFZA) launched the offshore company formation in 2014 aiming at both international and local investors who are planning to purchase freehold real estate properties in Ajman. The investors seeking to conduct businesses outside the UAE can also opt for Ajman offshore company formation with the benefits of asset protection, zero tax structure, and business confidentiality. Ajman is the smallest emirate in the UAE and the offshore company formation here can be done at lower costs.
Entrepreneurs seeking to form a company in Ajman offshore are required to have at least one shareholder. The corporate shareholding is permitted. Shareholders will decide the capital structure of the Company. The Bearer shares are not permitted. Different classes of shares are permitted and shares have to be fully paid when allotted.
Benefits of Offshore Company Formation in the UAE
a) Exemption from Corporate Taxes
Offshore company formation in the UAE is beneficial for the investors as there is no corporate tax at the Emirate of Federal level. At present, oil and foreign banks are subjected to corporate tax in the UAE.
b) 100% Foreign Ownership
Investors can enjoy 100% ownership by setting up an offshore company as per the International Companies Regulations. This is in contrast to the mainland business setup in the UAE where a local sponsor is required to hold at least 51% of the shares.
c) Complete Confidentiality
Foreign investors can who are seeking to protect the confidentiality of their business activities must opt for the UAE offshore company set up. The details of the names of directors or shareholders are not disclosed in any public domain or online company registry.
d) Benefits of Double Taxation Avoidance Agreement
The UAE has signed the Double Taxation Avoidance Agreement with over 116 countries that help the foreign investor avoid being taxed in two countries at the same time. The Agreement offers protection to investments in the UAE. Offshore company formation is the best way to avail the benefits of the Double Taxation Avoidance Agreement.
e) Low Operational Costs
Unlike the mainland companies, the offshore company formation doesn’t require to lease premises. The foreign investors need not bother about employing staff or the provision of guarantees. The overseas investors can operate the business through legal firms and accountants approved by the registrar.
f) Corporate Bank Account
Foreign investors who form an offshore company in Dubai, Ajman or Ras Al Khaimah can open a corporate bank account. They can deal with multiple currencies through this corporate bank account. They can also repatriate 100% of the profit to the countries of their preference.
Offshore Company Formation Agents in UAE
Jitendra Business Consultant (JBC) is one of the most reputed business setup consultants in Dubai, UAE. JBC’s highly efficient business setup consultants have helped thousands of clients to set up an offshore company in Dubai, Ras Al Khaimah and Ajman. The company formation in each of these jurisdictions differs from each other and foreign investors should pick the right jurisdiction that caters to their needs. The process of deciding the right jurisdiction is not an easy process and here is why the investors need the assistance of an experienced team of business setup consultants like the JBC. JBC will guide the investors through every process of offshore company formation right from registration to company incorporation. Last but not the least, Jitendra Chartered Accountants, a group entity of Jitendra Consulting Groups is a registered agent with Jafza, Rak and Ajman offshore jurisdictions.