Every business person wants to work in the most supportive and profitable environment. When it comes to starting a business, Dubai, without a doubt, passes the mark of ‘that’ environment.
The ground has not only opened its arms for entrepreneurs and new business investors but also has included the offshore industry in its arena.
If you are an offshore business investor and planning to start an offshore business or invest in the same, in Dubai, then this blog is for you.
Offshore Company Establishment in Dubai
An offshore company is a legal business entity set up to operate outside its registered jurisdiction and location of its ultimate ownership.
Setting up an offshore company in the UAE is an ideal, tax-efficient, and cost-effective corporate structure for entrepreneurs who wish to conduct international trade.
An offshore company in Dubai is also called a non-resident paper company that allows foreign entrepreneurs to serve Africa and the Middle East without administrative obligations. Also, the business investors hold the flexibility to operate through an offshore bank account at an international level.
The two principle jurisdictions offering the formation of offshore companies in the UAE is 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.
These companies are also permitted to open multi-currency accounts in the UAE and carry out business internationally. They may not, however, carry on business with a person resident in the UAE nor have physical premises within the UAE.
Remember that UAE offshore companies must not be confused with UAE freezone 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.
Advantages of Forming Dubai Offshore Company
By setting up an offshore company in Dubai, you will grab the following benefits:
- An offshore company is legally exempt from corporate tax, making it an ideal international trading
- The shareholders and the directors of the offshore company are not required to register their names and details for public record
- A Dubai offshore company is exempt from all annual accounting and tax obligations
- Setting up an offshore company in Dubai is a cheap and easy way to get a corporate bank account in Dubai
- No customs duty
- Full repatriation of funds and multi-currency transactions
- 100% foreign ownership
Procedure to Start an Offshore Company in Dubai
Even if you put the UAE’s incredibly low tax regime, and ease and low cost of doing business aside, there’s yet another great reason to set up an offshore business here – it’s incredibly easy to do so. The company formation process is so simple that it can often be completed in a matter of weeks. Here are the steps that you need to follow to register your offshore company in Dubai.
1.Selection of Trade Name
The first step is to select a trading name for your business, as it shall reflect the corporate activities accordingly. When choosing a tradename, there are a few restrictions you need to follow, like the selected name must not be similar to the company name of any established entity, no usage of words like banking, insurance, reinsurance, etc.
2.Submission of the Application
The next move is to submit the company application form to the relevant business authorities with all the relevant documents. It is to note that the documentation and company formation process also depends on the total number of shareholders in the offshore company.
3.Reviewed by the Relevant Authority
The relevant documents need to be submitted to the appropriate authority who will scrutiny the same and will approve/ disapprove the application that you submit. The inspection process involves several factors that need to be considered accordingly.
4.Open an Offshore Bank Account
Once the declaration from the relevant authorities has been obtained, the next move is to proceed with an offshore bank account.
[Read more: Advantages of an Offshore Bank Account]
The offshore bank account allows business investors to transact at a global level. Here are the offshore banking facilities, which will help you know the same at an in-depth level.
Documents Required to Start an Offshore Company in Dubai
When it comes to the company formation process, documentation plays an important role. Now, incorporating an offshore company requires a different set of documents.
For individual shareholders in the company-
- Attested passport copies of the owner/shareholder
- Residential proof
- Original bank reference document
- Details of the owner/shareholder
- Preferred name of the company to be formed
- Activities of the newly formed offshore company
- The hierarchy of beneficiaries
For Corporate shareholders in the company-
- Board resolution
- Memorandum of Association
- Parent company certificate mentioning the name of shareholders/directors, and duly attested
- Hierarchy of beneficiaries
JAFZA Offshore Company Formation in Dubai
JAFZA is currently one of the fastest-growing free zones in Dubai with its own set of regulations and was created to attract investments.
JAFZA offshore company incorporation is allowed to trade internationally and is allowed to own property in the Emirate of Dubai, where corporate shareholders are permitted.
The JAFZA offshore company is also allowed to own and operate a bank account in Dubai. Here’s a guide on How to Set Up an Offshore Company in JAFZA, which is important for you to understand before you invest.
RAK Offshore Company Formation in Dubai
Similar to that of JAFZA (Dubai Offshore), the RAKIA offshore company is a part of the Ras Al Khaimah Investment Authority, which has been widely preferred by the offshore business investors.
The zone provides a comprehensive solution and a flexible regulatory framework for international business. Also, the area is much preferred due to lower setup costs than the other two locations in the country.
Here’s an Offshore Company Guide in RAK, which will help you to understand the basics at ease.
By now, you must have understood a complete picture of the relevant steps that need to be taken accordingly when it comes to offshore company formation in Dubai.
Proceeding ahead with the company setup process might be difficult if you are not well-versed with the legal proceedings. Not only it helps in solving the issues, but a certified expert can act as a guide and help you to streamline the processes accordingly.
If you are still confused or skeptical about the process, we at Business Setup Worldwide can help you with it. Our certified business advisors hold industry experience and can help you to start your business by providing tailored solutions accordingly.
Contact us today- we’d be happy to assist you.