|Offshore companies (often called International Business Companies – IBC) are the long-time applied and praxis-proven option which can be effectively used for assets protection, business and transaction structuring.|
Main characteristics of offshore companies in UAE
Offshore company, as according to the legal framework, must have a registered agent which provides incorporation and administration to this company in the country of its incorporation. The offshore company does not need to have a physical office space.
These Offshore companies are only permitted to carryout business outside of the UAE (with exception of some of the cases specified below). Such limitation, in most of the cases, is not an essential obstacle for doing the international business over offshore companies as the company’s country of registration can be chosen such a way that this requirement would be fulfilled. Apart from the above, the offshore companies are not considered tax resident in the UAE and thus not eligible for the Double Tax Treaties (DTT) agreements between countries.
There are three Free Trade Zones in UAE (FTZ) which provide the possibility to open offshore (IBC) companies in UAE:
- International Business Company in Jebel Ali Free Zone Authority (JAFZA, Dubai). Such companies are called JAFZA IBC, UAE.
- Offshore company in Ras Al Khaimah Investment Authority (RAKIA FTZ). Such offshore companies are called RAKIA offshore companies, UAE.
- International Business Company in Ras Al Khaimah Free Trade Zone (RAK FTZ,). Such offshore companies are called RAK IBC, UAE.
- Ajman free zone offshore companies, UAE
JAFZA offshore which is Dubai based, has historically been the only offshore investment license permitted to acquire Dubai real estate. Ajman offshore companies now permit the acquisition of Dubai based real estate. However, for the preparation of a ‘Will’ as part of estate planning, the JAFZA offshore company will only be considered in case the same needs to be registered with DIFC courts that adopt Common law principles.
If such an advantage is not of priority, one shall pay attention to the other types of offshore incorporations available in the UAE which can be incorporated in RAK or Ajman and which perfectly fulfils the requirements for the IBC companies.
UAE Offshore companies have the following characteristics:
- Tax exemption both individually and corporation
- No requirements to pay the share capital.
- No public registry of shareholders and directors
- Absence of any currency control.
- No requirement for submission of accounting and audited statements.
- Number of directors of the offshore company – from one to six (physical persons as well as legal entities) permitted.
- Number of shareholder of the offshore company – from one to fifty (physical persons and legal entities) permitted.
- No limitations on the citizenship /nationality of company directors and shareholders.
- No limitations on the capital expatriation.
- Possibility to open and manage bank accounts in Dubai, UAE and abroad.
- Companies can do business outside of UAE.
- Holding activities: holding of shares and investments in UAE and abroad both permitted.
Activities permitted under UAE offshore companies
- International consulting.
- International trading.
- Holding activities (with the right to purchase shares of the companies in UAE and abroad).
- Professional services.
- Holding of real estate (typically outside of UAE and in some designated areas of Dubai, UAE).
- Opening and managing bank accounts (in UAE and abroad).
- Activities disallowed include:
- Insurance and financing activities.
- Any activity related to media.
- Any activity related to aviation.
- Real estate brokerage
- Legal advisory and consultancy
Our Advisors will advise and assist you incorporate your chosen offshore company in the best and efficient manner as well as assist with the open of company bank account in the UAE for such company.
To receive additional info and advice on the incorporation of the offshore company in Dubai, UAE please send us your request.