For foreign investors looking to form entities for the purposes of holding capital or assets, both inside and outside the UAE, or conducting business outside the UAE, offshore companies are an attractive structure that is relatively inexpensive (in comparison to the other types of legal entities available in the UAE).
In terms of how it conducts business, an offshore company differs significantly from a free zone corporation. An offshore corporation is a legitimate corporate entity that has been established with the goal of conducting business outside of the country in which it is registered and/or the location of its ultimate ownership.
The major benefits of establishing an offshore company in the UAE are as follows, but they may vary to some extent depending on the corporate law of the relevant jurisdiction
In general, offshore businesses in the United Arab Emirates are subject to exemptions from corporate tax, on fulfilling certain terms and conditions.
Jebel Ali Free Zone (JAFZA) and Ras Al Khaimah are the two main jurisdictions in the United Arab Emirates that provide offshore companies (RAK).
Both jurisdictions are “Tax Free” jurisdictions, meaning there is no UAE corporate tax or income tax levied on enterprises operating there. They also permit 100% foreign ownership and allow registered businesses to create several currency accounts in the UAE and conduct business there.
Jafza Offshore
Only a certificate of incorporation is given to a Jafza offshore company; no business licence is issued. This means that the offshore corporation is unable to engage in any kind of business with anyone living in the United Arab Emirates.
Now that you know this, choosing a registered agent like KGRN is where you should start when setting up an offshore business in Jafza. All administrative procedures pertaining to interactions with Jafza as the registered agent will be handled by KGRN Chartered Accountants.
The registered agent will handle all correspondence on the company’s behalf after you’ve registered your interest and chosen a registered agent.
Principal advantages of offshore company registration in JAFZA:
- The JAFZA Offshore Companies Regulations do not require any local shares for 100% foreign ownership;
- Ownership of Local Real Estate: The JAFZA Offshore Company is allowed to directly own local Dubai real estate. JAFZA offshore corporations are able to own most properties in Dubai, although both the Free Zone and Developer must first approve;
- Despite a general ban on offshore companies doing business with UAE citizens, the authorities do permit offshore companies to own shares in both onshore (LLC) and free zone companies.
- Having a local bank account in the UAE allows offshore businesses to do frequent transactions with other countries;
- Information about shareholders and directors – Names of shareholders and directors do not required to be listed on a public registry;
- Inspection – The registrar has the authority to conduct inspections of offshore companies or to designate inspectors to do so.
RAK Offshore
The Ras Al Khaimah Investment Authority (RAKIA) established RAK Offshore as a different offshore location in the Middle East. Within just 14 months of operation, RAK Offshore has grown its client portfolio to over 1,900 Companies offering specialised services like asset protection plans and real estate holding.
Several foreign companies registered with RAK Offshore have real estate and property investments as one of their main activities. The fact that RAK Offshore guarantees complete privacy and confidentiality—and that owners of firms must maintain their secrecy in accordance with the law—ensures a highly favourable business climate for both individual and corporate investors. Numerous financial and non-financial services are offered by RAK Offshore in its service offering. RAK Offshore makes possible the following within its non-financial portfolio:
Contact us at +97145570204 or [email protected] to learn more about Kgrn Chartered Accountants, 15 years of experience in offshore company formation in UAE.
Image by diana.grytsku on Freepik
