Gone are the days when just a fantastic business idea and initial capital were key to a successful business setup. The times that we are in now, with new tax regimes and fragile economies, it has become increasingly important to find a suitable place to start your business to maximize your profits.
The economy in the UAE is picking up, especially speaking of the non-oil economy in recent times. The government has also realized this and is using all means within the financial systems to bring in more foreign capital into their economy. What this means for prospective business owners is there will be favorable conditions for their business to flourish in the UAE.
In the UAE there are two offshore jurisdictions (i)
The Dubai Offshore company is an international business company in Dubai and is the only offshore where business owners are allowed to own or hold real estate.
Here’s why offshore company formation in Dubai is the answer to your business’s financial woes.
Dubai, as you know is one of the seven emirates of the United Arab Emirates. It is the fastest growing emirate in terms of tourism and foreign cash inflow. People from all over the world travel to Dubai or look for offshore company formation for long or short term in life.
Before we get into details, let us focus on knowing what an off-shore company is. It means to register or to operate in a location that is outside of a business’s national boundary. Eg. If you are an American passport holder, opening a branch of your company in Dubai will be called the offshore branch.
Why offshore? Why are business owners looking out to step out of their home territory and also their comfort zones to set up business in a foreign land? Here is the answer. Offshore company formation helps reduced, or in some cases no income tax. Offshore allows business to lower the amount of income tax owned by legal means by claiming permissible credits and deductions.
If your core business and your clientele are not located within Dubai and If you are not interested in Dubai market, and you want to take advantage of the tax regime, privacy laws, asset protection, and offshore accounting, then Dubai offshore company setup should be your choice.
Broadly these are the following characteristics of Dubai offshore company.
- 100% ownership by foreign shareholders
- Stringent privacy laws and reliable confidentiality
- Tax exemption completely: There are no corporate tax, personal tax, capital gains tax or value-added tax in the entire of UAE with exception of branches of foreign banks and oil producing companies
- Minimal or no share capital requirement in all of UAE generally
- Zero restrictions on profits and capital expatriation
- Solid and stable banking systems in the UAE
- Most effective protection instruments of confidentiality and investor rights
- Virtual Office Facilities
- There are no public disclosure requirements
- There are no exchange controls
- Provision to open multi-currency bank accounts
Now that we have specified the benefits of an offshore company formation in Dubai, let's proceed to the type of companies that can be incorporated into the Free Trade Zones (FTZ) in Dubai
- Holding company with assets abroad
- Holding and management of real estate in Dubai
Prohibited activities in Jebel Ali Free Zone (JAFZA) Offshore. There are some activities that you may not be able to pursue. It is important to know which ones those are
- Professional services
- Intellectual property
- Movie production
Dubai offshore Company requirements (ii)
- Minimum two natural persons are required to act as directors of the company
- No minimum capital requirement, shares must be fully paid and allotted
- There must be one minimum shareholder-corporate or individual
- Different classes and bearers of shares are not permitted.
- Permission to have a rented office in UAE is not granted, instead UAE approved registered agent must provide registered office address must be present
So how do you get started? To begin with, you must have an offshore bank account in Dubai to start your offshore business. This typically takes a week’s time.
List of documents required for opening a bank account:
- Valid passport copy
- Last 6 months banks statement
- Duly stamped bank forms
There are a number of banks available with whom you can open an offshore bank account. Once the bank account is in place, you can proceed with the submission of supporting documentation for opening an offshore company. Commitbiz team can assist you with choosing a bank which suits your requirements.
- Name of company: The company name must ideally reflect what company activities are. At the end of the company, there must be Ltd or incorporated. In case there is already a name, you will have to check for availability for the registry.
- Shareholder data: Shareholders or directors of the company may be legal entities or physical persons; there is no limit on citizenship or resident status.
- The article and memorandum of association for the proposed company must be submitted
- Registry data on shareholders and directors of the company that is not public.
- Valid passport copies of all shareholders and directors of the company
- Valid proof of residential status of the shareholder: This may be utility bills, bank account statement of Origin Company etc. This must not older than 3 months, must be an original document.
- Bank recommendation/approval letter. This must preferably be in English and should be original.
Restrictions: Here are something’s that business owners might miss out on in case of exclusive off Shore Company. With the exception of investing in real estate and opening a bank account in the UAE, Business owners cannot operate on any business activity within UAE. Compared to an onshore company in a Free-trade Zone, an offshore company does not make you eligible for a residency visa in UAE.
There is a number of benefits associated with offshore company formation. But unlike onshore business setups, where there are very fewer restrictions, offshore company formation in Dubai comes with a lot of restriction and prohibitions. Still, with business setup services offered by Commitbiz, you will be able to maneuver freely in Dubai economy, to set up your own offshore company.
If you are interested, do contact us today.