Dubai is considered one of the fastest-growing economies in the world, and for entrepreneurs and businesses, it is an ideal location to set up their offshore company. The government of Dubai has implemented a business-friendly environment that encourages foreign investment and company formation. The ease of doing business, favorable tax regime, and strategic location make Dubai the perfect location for businesses looking to expand globally. In this article, we will discuss how to set up an offshore company in Dubai and how Adam Global can help you.
What is a UAE offshore company?
A Dubai offshore company is a legal entity that is established outside of the United Arab Emirates (UAE) mainland, and Dubai offshore companies are regulated by the Jebel Ali Free Zone Authority (JAFZA), Ajman offshore, and the Ras Al Khaimah (RAK) International Corporate Center. These offshore companies are used by entrepreneurs and businesses to enjoy various benefits such as tax exemptions, protection of assets, and confidentiality.
Documents required to set up an offshore company in Dubai
Passport copies of shareholders and directors: To establish an offshore company in UAE, all shareholders and directors must submit a copy of their passports. The passport must be valid for at least six months.
Proof of residential address of shareholders and directors: A proof of address is also required for each shareholder and director. This can be a utility bill or a bank statement, which is not older than three months.
Memorandum and Articles of Association: The Memorandum and Articles of Association is a legal document that outlines the purpose, objectives, and scope of the company’s activities. It must be signed by all shareholders and directors and submitted to the relevant authorities.
Bank reference letters: The company must obtain bank reference letters for all shareholders and directors. These letters should confirm the financial standing of each person and their suitability to be a shareholder or director of an offshore company.
Power of attorney: If the shareholder or director cannot be present in Dubai for the company formation process, they must provide a power of attorney to authorize a third party to act on their behalf.
Certificate of Incorporation: If the company is being formed as a subsidiary of an existing company, a certificate of incorporation of the parent company must be submitted.
Business plan: The company must also provide a comprehensive business plan, outlining the proposed activities and objectives of the company.
Rental agreement: If the company requires office space, a rental agreement for a registered office must be submitted.
Cost set up an offshore company in Dubai
Criteria for opening an offshore company
Minimum share capital requirement: One of the key advantages of setting up an offshore company in Dubai is that there is no minimum share capital requirement. This means that you can start your business with minimal financial investment.
Several shareholders and directors: To set up an offshore company in Dubai, requires a minimum of one shareholder and one director. The shareholder and director can be the same person, and both can be of any nationality.
Appointment of a registered agent and registered office: An offshore company in Dubai must appoint a registered agent who will act as a liaison between the company and the regulatory authorities. The registered agent must be a UAE-based company with a valid license to provide offshore company formation services. The company must also have a registered office in Dubai.
Proper accounting records and annual financial statements: The company must maintain proper accounting records and prepare annual financial statements by international accounting standards. These records must be kept at the registered office of the company.
Compliance with regulatory requirements: The company must comply with all the legal and regulatory requirements set by the relevant authorities. The company must also obtain all necessary permits and licenses to carry out its intended business activities.
Non-resident status: An offshore company in Dubai must maintain its non-resident status and cannot carry out any business activities within the UAE mainland. However, the company can conduct business activities outside the UAE.
Limited liability: The offshore company must have limited liability, which means that the shareholders’ liability is limited to their share capital contribution.
No physical office space: An offshore company in Dubai does not require physical office space. However, it must have a registered office and a registered agent.
Business activities: An offshore company in Dubai can conduct various business activities, including international trade, investment holding, and asset protection. However, it cannot engage in any commercial activities within the UAE mainland.
In summary, to open an offshore company in Dubai, you must fulfil several criteria, including a minimum share capital requirement, the appointment of a registered agent and registered office, proper accounting records, compliance with regulatory requirements, non-resident status, limited liability, no physical office space, and conduct business activities outside the UAE mainland. It is essential to seek the advice of a reputable business setup service provider like Adam Global to ensure that you meet all the legal and regulatory requirements of setting up an offshore company in Dubai.
How do I know if opening an offshore company is right for me?
If you are an entrepreneur or business looking to expand globally, setting up an offshore company in Dubai could be the perfect solution for you. Dubai’s favorable tax regime, strategic location, and ease of doing business make it an attractive destination for businesses. An offshore company can help you enjoy various benefits such as the protection of assets, and confidentiality. However, before setting up an offshore company, it is essential to seek professional advice and understand the legal and financial implications of doing so.
How is the offshore company setup different from Mainland and Freezone company setup
Offshore company setup, mainland company setup, and free zone company setup are three different types of business formations with distinct characteristics.
Offshore Company Setup:
An offshore company is a legal business entity registered in a country or jurisdiction other than where the company’s operations are conducted. Offshore companies are typically established in low-tax or tax-free jurisdictions and are used for asset protection, tax optimization, and privacy purposes. The registration process for offshore companies is relatively straightforward, and the fees are often lower than for other types of business formations. However, offshore companies are subject to more regulatory scrutiny, and their legal status may be limited in terms of what they can do within the jurisdiction where they are registered.
Mainland Company Setup:
A mainland company is a business entity registered and located within the mainland jurisdiction of a country. Mainland companies are subject to the laws and regulations of the country where they are established. The setup process for mainland companies can be complex and time-consuming, and the costs of registration and operation can be high. However, mainland companies have the advantage of being able to conduct business freely within the country and may also have access to government incentives and support.
Free Zone Company Setup:
A free zone company is a business entity established in a designated free zone within a country. Free zones are areas that offer tax incentives, customs duty exemptions, and other benefits to encourage foreign investment and trade. The setup process for free zone companies is often simpler and faster than for mainland companies, and they enjoy more flexible regulations. However, free zone companies are subject to restrictions on the types of business activities they can engage in, and they may be required to pay higher fees for the use of the free zone facilities.
In summary, the main differences between these three types of company setups are the jurisdiction in which they are registered, the regulatory requirements they are subject to, the fees and costs associated with their registration and operation, and the types of business activities they are permitted to engage in.
Types of offshore companies in UAE
Jebel Ali Free Zone Offshore Company (JAFZA): JAFZA is one of the oldest and most well-established free zones in Dubai. It offers several advantages, such as 100% foreign ownership, no corporate tax, and full repatriation of profits. JAFZA offshore companies are ideal for businesses looking to set up a holding company, a special purpose vehicle (SPV), or a subsidiary to hold their assets or intellectual property rights. JAFZA also offers a wide range of business activities, making it an attractive option for businesses looking to diversify their portfolio.
Ras Al Khaimah International Corporate Center (RAKICC): RAKICC is a relatively new free zone in UAE, offering similar advantages as JAFZA, such as 100% foreign ownership and no corporate tax. However, RAKICC also offers unique benefits, such as low setup costs, a wide range of business activities, and easy access to local and international markets. RAKICC offshore companies are ideal for businesses looking to set up a holding company, an SPV, or a subsidiary for international trade or consultancy services. RAKICC also offers a simple and streamlined process for company formation, making it an attractive option for entrepreneurs and businesses looking to start a new venture quickly and efficiently.
Ajman Offshore – it is the most hassle-free and has a much faster company incorporation process when compared to other Jurisdictions in UAE but at the same time, it has credibility by being part of Ajman Free Zone Authority. An Ajman offshore company can be incorporated in 2-3 working days provided with all the required documents.
In summary, the two types of offshore companies in UAE, JAFZA and RAKICC, offer various advantages and benefits. Choosing the right type depends on the business needs and objectives of entrepreneurs and businesses. It is essential to seek the advice of a reputable business setup service provider like Adam Global to ensure that the company formation process is smooth and hassle-free. By doing so, entrepreneurs and businesses can enjoy the benefits of setting up an offshore company in Dubai, such as a favourable tax regime, asset protection, and ease of doing business
Business activities permitted for offshore companies in UAE
Offshore companies in UAE are permitted to engage in various business activities. These include:
- Investment holding: An offshore company in Dubai can hold investments in local and international companies, real estate, and other assets. This is a popular activity for businesses looking to diversify their portfolio and expand their investment options.
- International trading: Offshore companies in UAE can engage in international trade, including the export and import of goods and services. This is a popular activity for businesses looking to take advantage of Dubai’s strategic location as a hub for international trade.
- Consultancy and advisory services: An offshore company in Dubai can provide consultancy and advisory services to clients globally. This is a popular activity for businesses looking to capitalize on Dubai’s reputation as a business-friendly and innovative city.
- Intellectual property holding: An offshore company in Dubai can hold intellectual property rights such as patents, trademarks, and copyrights. This is a popular activity for businesses looking to protect their intellectual property rights and monetize their patents, trademarks, and copyrights.
- Asset protection: Offshore companies in UAE can be used for asset protection, where the assets of the company are held offshore to protect them from creditors and legal claims. This is a popular activity for high-net-worth individuals and businesses looking to safeguard their assets.
- Shipping and logistics: An offshore company in Dubai can engage in shipping and logistics activities, including ship management, freight forwarding, and warehousing. This is a popular activity for businesses looking to take advantage of Dubai’s location as a major shipping and logistics hub.
It is important to note that offshore companies are not permitted to conduct any business activities within the UAE mainland. However, they can conduct business activities outside the UAE, making them an ideal choice for businesses looking to expand globally while enjoying the benefits of Dubai’s business-friendly environment and favourable tax regime.
How can Adam Global help?
Adam Global is a leading business setup service provider in the UAE, with years of experience in helping entrepreneurs and businesses set up their offshore companies in UAE. Our team of experts will guide you through the entire process, from company registration to post-incorporation services, and ensure that your business is compliant with all the legal and regulatory requirements. We offer a wide range of services, including company formation, bank account opening, visa processing, and accounting and bookkeeping. Contact us today to learn more about how we can help you set up your offshore company in UAE.
