Guide to Form a Uae Offshore Company in 2022

The United Arab Emirates is an ideal place for doing business as it provides greater confidentiality and more tax benefits. Besides, it has a multitude of company formation options to choose from, such as the mainland, the free zone, and the offshore. Every region offers its own perks and incentives. However, many big investors and giant corporations are making their way for offshore company formation in UAE. An offshore company is a business entity that conducts its operation outside of its original location of registration. Moreover, the registered companies do not have to apply for a license for their operations, rather they are issued a certificate of incorporation to justify their authenticity. 

Offshore companies are a perfect spot for conducting businesses across the world. Additionally, there are multiple other intentions behind forming an offshore company which we will discuss further in this article. So, let’s dive into it.

Uses of an offshore company 

• For trading internationally 
• To carry out professional services 
• To invest in different projects without any disclosure 
• Property-owning companies 
• To register assets like copyright, trademark, and patent 
• As holding companies

Business activities to carry out in offshore jurisdiction 

• Property holding 
• Intellectual property holding 
• Shipping firms 
• General trading 
• Online advertising 
• Distribution and logistics 
• General international trading 
• Professional services such as consultancy 
• Broker services

Major reasons for offshore company formation in UAE 

Ever since the introduction of offshore company formation, the UAE has rapidly emerged as a business hub in the Middle East. Moreover, it has been proving itself as one of the most dynamic international financial centers globally. Therefore, many private individuals and corporate entities are incorporating an offshore companies in Dubai, UAE. Perhaps, there are several reasons for it, such as – 

• Highest level of business anonymity and confidentiality 
• Protection of assets 
• No accountant costs 
• Opportunity to conduct business internationally 
• Allows opening of a multi-currency corporate bank account in UAE 
• Intermediary in any transaction between foreign companies and your own companies 
• Exemption from import/export taxes 
• Zero taxes – income, personal as well as corporate 
• Investment diversification 
• Secrecy and privacy in business operations 
• Allows repatriation of profits and capital 
• Easy shares transfer 
• Low operational costs 
• World-class banking services 
• Investment management 
• A minimum of one company director or shareholder is required for company formation 
• Quick to incorporate a company 
• Simple regulatory requirements 
• Suitable for all kinds of business, local or international 
• No minimum share capital requirements 
• Limited liability 
• Devoid of currency regulations 
• Scope of business expansion

Additional aspects of offshore company formation in UAE:- 

• Allowed to have a non-UAE resident as a director. However, the manager must be a UAE national 
• Not authorized to conduct business related to banking, insurance, and real estate. 
• No allowance for physical office space 
• No requirement for an annual governmental audit 
• Unauthorized to carry out business in Mainland 
• No permission for UAE resident visa 
• Permission to hold shares in other companies too 
• Must be incorporated under offshore company laws and regulations 
• Can not trade within the offshore jurisdiction

Documents needed for offshore company setup 

The necessary documents required for offshore company formation in UAE are as below: 

• Application for business incorporation 
• Proof of address (For example, utility bill) 
• Details and reference letter from the bank 
• Passport copies of the owner/shareholders and designated manager 
• Memorandum of Association (MoA) 
• Business plan 
• Owner’s professional details/updated curriculum vitae 
• Three suggested names for the company 
• Description of business activities

Procedure for offshore company formation in UAE 

Follow the below steps to start an offshore company in UAE – 

• Choose an appropriate name for your offshore business. However, make sure that it conforms to the naming rules of the UAE. 
• Fill in the application form for company registration, and submit it to the concerned authorities along with the supporting documents. 
• Draft the Memorandum of Association (MOA) and the Articles of Association (AOA) of the company. 
• After receiving the final approval, start a corporate account in a bank for your offshore business.

Prime Jurisdictions in UAE for offshore company formation 

While choosing offshore jurisdiction for company formation, there are certain things you must keep in mind. For example, 

• The chosen jurisdiction must have an updated banking and financial system which is well-connected with a modern and reliable communication structure. 
• While trading internationally, choose countries that follow hard work, forward-thinking, and privacy. 
• The selected location must make it easy to communicate with the other side of the globe.

Additionally, there are three places where offshore company formation can take place. These are – 

• Jebel Ali Free Zone (JAFZA) offshore 

Established in 1985, Jebel Ali Free Zone is the oldest as well as one of the leading free zones in the country. It is managed by the Jebel Ali Free Zone Authority(JAFZA). It was established with the aim to promote trade through the Jebel Ali Port. Besides, the JAFZA registered companies receive many monetary incentives and support infrastructures such as ready-made factories and warehouses. In addition, the lenient setup requirements make company formation relatively easy. 

JAFZA allows offshore companies to legally own property in Dubai and also hold shares in other companies, such as free zone companies and onshore companies. Hence, the companies can earn returns on investments in commercial properties as well as local companies. 

Additionally, JAFZA offshore companies are exempted from filing annual returns. However, they must keep their accounting records, retained for at least 10 years, and audited by an approved auditor. 

• Ras Al Khaimah (RAK) offshore 

Another popular jurisdiction for offshore company formation in UAE is Ras Al Khaimah. Although RAK offshore is not as reputable as JAFZA, the cost of  RAK offshore company setup is way cheaper than JAFZA offshore’s. Nevertheless, both RAK and JAFZA share similar benefits when it comes to setting up an offshore company.  For instance, there are no minimum capital requirements in RAK offshore and it can have one single director and shareholder. They can also own property in Dubai as well as hold shares in companies registered out of the jurisdiction.   

Furthermore, RAK offshore offers high levels of confidentiality. In other words, the companies are protected by the RAK authorities from lawsuits and other legal allegations. And therefore, RAK authorities make sure the incorporated company is ethical and credible, and stronger legislation is in place to protect companies and their investments.

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• Ajman offshore 

The Ajman Free Zone was instituted in the year 1988. Gradually, it is growing as a popular jurisdiction for offshore companies. Additionally, Ajman is convenient for the transportation of goods, because of its proximity to the two international airports as well as four ports in Sharjah and Dubai. This also facilitates greater access to regional markets. 

Basically, Ajman offshore’s recognition is less as compared to JAFZA and RAK offshore. However, Ajman offshore companies enjoy similar advantages to those registered with JAFZA or RAK, such as confidentiality of shareholders’ personal information and company details, no physical office requirements,  faster incorporation process, no annual filing, etc. Also, it requires only one director, one secretary, and one shareholder, without any liability of minimum capital requirements. But unlike JAFZA and RAK, Ajman offshore companies are not allowed to own real estate in Dubai. 

Conclusion 

For entrepreneurs and corporations seeking to set up a company in Dubai to conduct international trade, an offshore company is an ideal business structure for them. Shuraa Business Setup can provide you with the fastest and easiest way to register an offshore company in the UAE, depending on your long-term goals and business model. Moreover, our affordable service packages include offshore company registration with the Registrar, provision of a registered agent and address, annual accounting services, the opening of an offshore bank account, tax services, etc. 

So, Contact us to find more information about offshore company formation in UAE and our team of experts will revert within 24 hours. Call +971 44081900 or email us at info@shuraa.com.