About Offshore Company Formation
Offshore Companies in UAE should not be confused with UAE Free Zone companies. An Offshore Company is a legal business entity that is set up with the intention of operating outside its registered jurisdiction and/or the location of its ultimate ownership.
There may be many reasons to register an Offshore Company, but the general benefits of utilising an offshore corporate structure include:
The two principal jurisdictions offering Offshore Companies in the UAE are Ras Al Khaimah (RAK) and the Jebel Ali Free Zone (JAFZA). Both are “tax free” jurisdictions that levy no income tax or corporate tax and permit 100% foreign ownership. The UAE has Double Tax Treaty agreements with over 40 other countries.
Offshore Companies are permitted to open multi-currency accounts in the UAE and carry out business internationally. They may not, however, carry on business with persons resident in the UAE or have physical premises within the UAE.
Both RAK and JAFZA have their own specific benefits. RAK is the more cost effective of the two, but JAFZA is the only Offshore Company that is legally permitted to own property situated in Dubai.
UAE Offshore Companies should not be confused with UAE Free Zone Companies. Free Zone Companies are onshore entities permitted to carry out business in Dubai with certain restrictions. They are similarly subject to the 0% rate of corporate tax but they enable their shareholders, directors and employees to obtain residency in the UAE.
As a matter of local company law, both RAK International Companies (RAK ICs) and JAFZA Offshore Companies MUST appoint an approved registered agent (Sovereign Corporate Services is approved for this purpose).
JAFZA Offshore Company Incorporation
The JAFZA was created in 1985. It is an industrial area surrounding the Jebel Ali Port, one of the world’s biggest shipping ports, which allows the international companies based there to enjoy the special privileges of the free zone. These include exemption from corporate tax for 15 years, no personal income tax, no import or export duties, no restriction on currency, and easy labour recruitment.
Jebel Ali is located just outside Dubai and is about an hour’s drive from Abu Dhabi, the UAE’s capital city. Al Maktoum International Airport, which is planned to be the largest airport in the world in both freight and passenger volume, is constructed just outside the port area.
The Jebel Ali Free Zone Authority (JAFZA), in conjunction with the Dubai Government, introduced the Offshore Company in 2003 under the Jebel Ali Free Zone Offshore Companies Regulations 2003.
Key features of a JAFZA Offshore Company
Key benefits of an offshore company registration in JAFZA
RAK Offshore Company Formation
Ras al Khaimah, situated approximately an hour’s drive from Dubai, is one of the fastest growing of the seven Emirates that form the UAE. RAK has the highest level of industrialisation in the UAE, with manufacturing at 26% of the GDP. It has built its reputation on a business-friendly investment environment and competitive costs. The cost of doing business in RAK is 25 to 50% lower than the UAE average, allowing companies to maximise their return on investment.
In September 2006, the Ras al Khaimah government launched the International Company structure, also known as the RAK Offshore Company. These are regulated under the Ras Al Khaimah Free Trade Zone Authority International Companies Regulations 2006.
Key features of a RAK Offshore Company
Key benefits of opening a RAK offshore company
Documents required for Offshore Company set-up in UAE from all shareholders and directors
Offshore Company Formation - FAQs
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