Whether you're aiming to expand internationally, manage intellectual properties, or cut costs, establishing an offshore company in Dubai, particularly in free zones such as JAFZA, RAK, and AJMAN, is a great option. These free zones have top-tier infrastructure and a strong global reputation, making them key economic hub that supports various industries.
If you are seeking global growth with tax benefits, setting up an offshore company in Dubai could be an ideal solution. This article explores this offshore structure, how it functions, and how you can set it up with ease.
What is an Offshore Company in Dubai?
An offshore company in Dubai is a limited liability entity. This type of offshore entity benefits from Dubai’s tax-efficient policies, which allow for no taxes on foreign income up to AED 375,000.
An offshore company can serve various purposes, such as holding intellectual property or handling invoicing, and can be customized to meet specific needs. Although a physical presence is not required, the company must be operated through your registered agent's office.
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Activities You Can Perform With an Offshore Company in Dubai
Once you open an offshore company in Dubai, you can pursue the following activities to drive growth and expansion:
- Signing international supply contracts, distribution agreements, and letters of credit.
- Starting a global dropshipping business or launching a new brand abroad.
- Managing IP assets, such as trademarks, copyrights, patents, and design rights under one umbrella, enhancing protection, and streamlining royalties.
- Managing multiple subsidiaries and branch offices domiciled outside the UAE
- Purchasing and managing offshore properties
- Conducting consultancy business
Benefits of Setting up an Offshore Company in Dubai
Here are the benefits of having an offshore company in Dubai
- There are no taxes on foreign income for offshore companies, provided it does not exceed the AED 375,000 ceiling. Any income above this ceiling will be taxed at 9%.
- Free zones foster a well-defined compliance framework that aligns with global transparency standards, such as the OECD and the FATF.
- To open an offshore company in Dubai, there is no need to establish a physical business location. Instead, the registered agent’s office will serve as the point of contact for administrative communications.
- Ease of domiciliation allows the company owner to shift its offshore company to another country with the approval of the registrar and members.
- Offshore companies in free zones can avail professional services from local companies, lease offices, acquire properties in specific freeholds, acquire a local company, and hold a corporate bank account.
- A JAFZA offshore company can appoint a Nominee Director (a body corporate approved by the authority) to handle compliance affairs and activities mutually agreed upon.
Documentation Requirements for Setting up an Offshore Company in Dubai
- KYC documents of the directors/shareholders/members, depending on the structure
- Operating agreement
- Memorandum of Association
- Article of Association
- A proof of business place
- Proof of source of funds (if applicable)
A Guide to Setting up an Offshore Company in Dubai
The section below breaks down the process of setting up an offshore company in Dubai:
Contact a Business Setup Advisor
Get in touch with a registered advisor who can help you navigate local incorporation regulations for a seamless company setup.
Structure Your Company to Meet Specific Goals
Depending on the purposes you wish to serve, structure your company accordingly. For example, if you want to acquire or sell foreign real estate, it is ideal to structure your company as a real estate holding entity. This will help you streamline purchases and expenses, whether you buy a tourist-oriented property in the Turks and Caicos or a condo in Bermuda. Likewise, if your goal is to earn IP royalties from a subsidiary in the UK, structure your company as an IP holding entity.
Either way, you have to ensure “economic substance” since both companies pursue core income-generating activities. Consult your agent before you proceed to the next step.
Draft the MoA, AoA, and arrange the KYC documents
Once you have decided on the structure, draft the founding documents, such as the Memorandum of Association and the Articles of Association. The MoA must reflect the purpose (the company intends to serve) under the “object clause”.
File an Application
Next, your agent will proceed to file the application with the relevant authority, ensuring all legal requirements are met.
Assessment and Grant of Certificate
The authority will inspect the paperwork to verify compliance with the Jebel Ali Free Zone Offshore Companies Regulations 2018.
Open a Bank Account
Finally, open an offshore bank account for your company. There are numerous offshore locations, including Singapore, Mauritius, and Belize, that offer top-tier banking services.
Key Compliance for an Offshore Company in Dubai
You must align with the following requirements to maintain compliance with local regulations:
- Maintain the members' register and update it as necessary. The appointment or termination of a member depends on the consent of active members and the approval of the relevant authority.
- Timely submission of the annual renewal fee and agents' expenses is essential to ensure business continuity.
- Any increase in share capital, whether substantial or marginal, requires the consent of the members and approval from the relevant authority. Such changes should be incorporated into the Articles of Association prior to seeking the authority’s approval.
How Can BSW Help?
Starting an offshore company in Dubai is a structured process that requires meeting local regulations and the authorities’ guidelines. Partnering with an expert firm like Business Setup Worldwide (BSW) can make a huge difference during company incorporation.
BSW has more than 8 years of experience in offshore company formation. We have served over 8000 clients to date and are committed to serving more with utmost precision and professionalism. Whether you are looking to go global or manage subsidiaries effectively, BSW has a practical roadmap to overcome every challenge. Contact us today.
