Over the years, tax benefits have become some of the most popular reasons for investors to register offshore companies. Thus, most countries have taken measures to transform themselves into popular offshore jurisdictions. The United Arab Emirates is no different, as it is one of the most sought-after places for people to set up their offshore business. This guide focuses on the points you need to consider before starting an offshore company in the UAE.
The United Arab Emirates: A Popular Offshore Jurisdiction
Business owners and entrepreneurs have been enthusiastically opting for company formation in the UAE. The UAE as a jurisdiction is a favorable ground for all types of businesses, from food trucks to accountancy firms that use digital banking.
Now, the next question is: What is an offshore company in the UAE?
The answer lies just below.
The United Arab Emirates has a long-standing reputation as a stable tax-haven jurisdiction. Due to compliance with all international requirements on anti-money laundering, the UAE has never been black-listed and has an impeccable reputation.
However, the country has chosen not to sign the directive and the agreement with the OECD (Organization for Economic Co-operation and Development). It ensures that investors enjoy adequate confidentiality protection and rights. In addition to this, the United Arab Emirates has a reliable and stable banking system for businesses.
Jebel Ali Free Zone Authority (JAFZA), Ras-Al-Khaimah Free Trade Zone (RAK), and Ajman Free Zone are hot zones for offshore company registration in the UAE.
Benefits of Offshore Company Registration in the UAE
Setting up an offshore company in the UAE has various advantages. Here’s a quick overview of the benefits:
No Tax or Customs Duty
Offshore companies in the UAE freezones are allowed to import foreign goods without the payment of customs duties. However, customs duties are applicable if your company chooses to move goods from freezones to the mainland.
Full Repatriation of Profits
An offshore company registration in the UAE allows full repatriation of profits. The UAE is known for its free economy model, which levies no income or corporate tax- whether you trade internationally via offshore brokerage account or serve vendors worldwide.
100% Foreign Ownership
Offshore company setup in UAE freezones allows 100% foreign ownership. Meaning, there is no requirement for a local sponsor to start your business. This makes the UAE an attractive hub for UAE Foreign Direct Investment.
Minimal Requirements
An offshore company set up in the UAE requires only one director and shareholder. Also, the appointment and replacement of a director in an offshore company in JAFZA require adherence to the minimum legal requirements.
Banking Flexibility
An offshore bank account allows for multi-currency transactions, thus ensuring freedom of global trade. The initial deposit threshold is also low for an offshore account in the UAE.
Utmost Confidentiality
Offshore companies in the UAE are legally structured to protect the privacy of shareholders and directors. The robust regulatory framework does not allow disclosure of personal information.
Steps to Offshore Company Setup in the UAE
Follow the steps mentioned below for offshore company registration in the UAE:
Sign Up with a Business Consultant
It is advisable to seek help from a business consultant for your offshore company setup in the UAE. A consultant will also help you overcome UAE e-commerce business challenges effectively.
Select a Company Name
Naming an offshore company in the UAE requires compliance with the conventions prescribed by the law. The registrar will verify your company’s name to ensure that it does not include certain prohibited words. Seek a business consultant’s guidance to ensure hassle-free approval.
Fill Out an Application Form
After selecting the respective company name, you need to fill out the application form and submit it with the following documents:
- Identity proof of the shareholders and directors
- Address proof of the shareholders and directors
- CV of the shareholders and directors
- Well-drafted business plan
Your business advisor will help you compile the required documents and submit them to the relevant authorities.
MOA, AOA Approval
You must also draft the Memorandum of Association (MOA) and Articles of Association (AOA) and submit them for approval. The concerned authorities will review your documents and grant you approval.
The approval time may vary depending on the requirements of your offshore company in the UAE. However, you will be able to conduct business operations only after you receive approval from the authorities.
Open a Bank Account
Once all the formalities for your offshore company setup in the UAE are complete, open an offshore bank account. It allows you to carry out business transactions easily.
Read more: Offshore company setup in Dubai.
Documents Required for Offshore Company Registration in the UAE
Here are the documents required for offshore company setup in the UAE:
For Individual Shareholders:
- An attested passport copy of the owner/shareholder
- Residential proof
- Original bank reference document
- Details of the owner/shareholder
- Preferred name of the company
- Activities of the newly formed offshore company
- The hierarchy of beneficiaries.
For Corporate Shareholders:
- Board resolution
- Memorandum of Association
- Duly attested parent company certificate mentioning the names of shareholders/directors
- Hierarchy of beneficiaries
Let Us Help You!
Setting up your offshore company in the UAE with an accredited expert helps ensure error-free completion of the process. We at Business Setup Worldwide assist in all procedures for your company and bank account. Our business advisors are well-versed in offshore formation. If you are looking forward to offshore company setup in the UAE, please contact us today- we’d be happy to help you.
