Over the last decades, the UAE has emerged as a jurisdiction of choice for firms willing to expand their business offshore. Being the most dynamic and fastest-growing international financial centre worldwide and the business hub of choice in the Middle East region, the UAE is the ideal place for offshore expansion whether it is for restructuring, asset protection or to establish a global presence. Ranked at the 11th position in the World Bank’s Ease of Doing Business Index, the UAE has commanded growing attention from firms willing to expand their business offshore basically due to its favourable tax regime and lack of complex bureaucracy.
UAE Offshore Company
In a nutshell, an offshore company (or an International Business Company) is a legal business entity formed under the laws of some jurisdictions as a tax-free company which is not permitted to engage in business within the jurisdiction in which it is incorporated. Offshore companies are most commonly used to facilitate international trade and investment activities as well as offshore banking and ownership of real property, intellectual property, licensing and franchising.
The principal jurisdictions offering offshore companies in the UAE are Ras Al Khaimah International Corporate Centre (RAKICC), Jebel Ali Free Zone (JAFZA) and Ajman Free Zone.
But, does offshore company formation in the UAE really come with attractive benefits as told? Let us take a look at some of the characteristics of an offshore company.
Attributes of UAE offshore companies
- Tax Efficiency – UAE offshore companies benefit from 100% tax exemption, making them ideal for asset protection planning and international trade. The only significant tax to be aware of in the UAE is VAT which is at a flat rate of 5%.
- 100% foreign ownership – There is no requirement for local shareholding
- Fast Incorporation – A minimum of 3 days and a maximum of 7 days required for incorporation
- Confidentiality – Great discretion and confidentiality by the Registries and complete privacy, confidentiality and protection of assets and information. There is also no public register of shareholders and directors
- Full repatriation of capital is permitted
- No audit/annual report is to be submitted to the authorities
- Ability to maintain multiple currency corporate bank accounts worldwide
- Ownership of shares in foreign or UAE companies possible
- Real Estate Ownership – A JAFZA offshore company is the only offshore firm that is permitted to own real estate in Dubai
- Cost effective – Setting up an offshore company is one of the most cost-effective corporate solutions in the UAE as there is no office requirement
- The UAE has a stable and business-friendly legal system as well as a flexible regulatory regime
- UAE offshore companies can take advantage of more than 40 UAE double tax treaties
- An offshore company can be registered by a sole shareholder and director.
Starting your offshore company in the UAE
An offshore company formation in the UAE is likely to provide a number of advantages to foreign companies, especially with the coming Expo 2020. The consultancy firm EY has predicted that AED 122.6 billion will be contributed to the UAE’s economy by 2031.
Europe Emirates Group can assist you with your offshore company formation in the UAE and make the process as easy as possible. We can register an offshore company remotely and following which our experts will handle your company set up from A-Z. Our consultants will guide you through the whole application process, starting from choosing your business activity, registering with the relevant authorities to opening a bank account as well as the annual upkeep of the offshore company.
Anne–Lise Aurore Pyday
Associate Consultant, EEG