Dubai has undergone an incredible transformation in recent years. The city, which was once a quiet fishing village, is now one of the most important business hubs in the world.
The growth and development have given rise to several business opportunities in Dubai and UAE. Although the pandemic has brought a downturn in the growth prospects, the destination has successfully recovered to keep the economy afloat.
Dubai has an area for everyone, from new entrepreneurs entering the market to established professionals who top the global list for company incorporation.
The offshore segment is one of the growing business segments that has been driving the economy exponentially. It is a great place to network and connect with other successful entrepreneurs.
Dubai Offshore Company Formation Services
The Emirate of Dubai has several destinations where business investors can focus on opening an offshore company. In the UAE, there are three offshore destinations widely focused:
There are many reasons people decide to establish offshore companies in Dubai, but one of the main reasons is taking advantage of Dubai's tax benefits and business opportunities.
The government also encourages companies to go offshore by offering attractive tax incentives and a clear regulatory framework. As compared to other destinations, the Dubai offshore company formation cost is comparatively lower.
Features of Offshore Company Incorporation in Dubai
Since we are taking a step to understand the offshore business unit, let's have a look at the characteristics of the same, which involves:
- Complete ownership by foreigners
- Strict privacy laws
- Complete tax exemption
- Minimal or no share capital requirement
- Zero restrictions on profits
- Remote banking assistance
- Complete virtual office assistance
- No exchange controls
- Flexibility to deal with multi-currency accounts
- High protection of assets and wealth
Types of Business Activities Incorporated with an Offshore Company in UAE
An offshore unit can be established to carry out the following activities:
- Open an offshore bank account
- Buy a shelf company
- Holding or investment company
- Offshore trading business
- Shipping company
- International consulting services
- Registering copyright and patents
- Owning real estate
- E-commerce activities
- Import and Export
Why Offshore Company Formation in UAE?
In recent years, the offshore company formation Dubai has become a trendy business formation segment. The offshore businesses offer a lot of advantages, namely –
- An offshore company can gain numerous tax advantages to avoid taxes on its income.
- The concept of offshore is beneficial to the large corporations who pay a higher amount of profit to the government.
- When you are looking to start a business in Dubai, you need to know that there are specific pre-requisites for an offshore company formation in Dubai Legal Advantages
- They can be protected from liability and have more legal protection against litigation.
- Confidentiality is one of the critical parameters that drive the business investor to engage in offshore activities.
- Monitoring the company remotely allows the business owners to enjoy the flexibility 24x7 irrespective of the time zone difference.
- In addition, the offshore concept minimizes the cost of physical space and creates room to deal with international clients at any point in time.
- The shareholders and directors do not need to register their names in public records
To understand the benefits more, look at 6 Reasons to Start a Business in Dubai Offshore.
Restrictions of an Offshore Company Formation in Dubai
As you have seen the benefits of incorporating an offshore company in Dubai, there are a few restrictions as well, which include:
- The established offshore entity is not allowed to trade in Dubai or the UAE
- The entity is restricted to rent any local premise in the UAE
- The entity cannot employ staff in the UAE
- The entity can't issue work or employment visa
- The Double Taxation Agreements can't be used to reduce the global withholding tax
Pre-Requisites of an Offshore Company Formation in Dubai
When you are looking to start a business in Dubai, you need to know that there are specific pre-requisites for an offshore company formation in Dubai, which includes:
- A minimum of two directors
- A minimum of one shareholder-corporate or individual
- A company secretary is required
How to Open a Dubai Offshore Company?
Incorporation of an offshore company involves a specific set of procedures that includes:
1. Be Clear Regarding the Business Activity
Since you are planning to incorporate an offshore business, first and foremost, you need to get a clarification regarding the business activity- what is the service or product you want to offer?
Having a clear idea of the same will help you understand the target market accordingly.
2. Choose Jurisdiction Accordingly
Next, you need to finalize the jurisdiction where you want to plan to deal with the incorporation activities.
If you are planning to carry out offshore activities in Dubai, then JAFZA is the perfect option that you give a start.
Have a look at Why JAFZA Offshore is Most Popular Among Investors, which will help you better clarify the jurisdiction.
3. Select a Business Structure
It is essential to select the correct legal entity while proceeding with company setup as it will have a drastic impact on the business, which involves:
- International Business Company (IBC)
- Offshore Trust
- Offshore Corporation
- Limited Liability Partnership (LLP)
- Limited Liability Company (LLC)
- Unlimited Company
- Company Limited by Guarantee
Select the best business structure depending on the share capital available and the number of shareholders willing to participate.
4. Finalize the Trade Name
The company name should be in line with the business's commercial activities. Make sure that the selected business name stands unique and doesn't stand familiar with the name of the existing players in the market.
5. Clear the Company Documents
To form an offshore company in Dubai, you need to make sure to get the company documents cleared, which involves:
- Duly filled application form
- Details of the company directors and shareholders
- The selected business name (at least three)
- Memorandum and articles of the company
- Identity and residential proof of the business shareholders and directors
- Bank approved letter
6. Obtain the Specific Business License
Obtaining a business license or approval is a must for offshore company formation. Documents are to be handed over to the government authorities to gain acceptance. Once approved, business activities can be carried out accordingly.
7. Open an Offshore Bank Account
To perform business activities smoothly, opening an offshore bank account is mandatory. However, business owners have the flexibility to open an offshore bank account in the same or any other jurisdiction.
For instance, if you own an offshore company in Dubai, you can open a corporate bank account in Seychelles or the British Virgin Islands.
One of the reasons why business shareholders proceed with the same is to maintain high-end security. Here’s a guide on the 5 Factors to Consider While Opening an Offshore Bank Account.
8. Avail Additional Services
Once the offshore company gets incorporated, the business owners can opt for additional services like Nominee Directors or Intellectual Property to secure the business details and assets.
Offshore company setup in Dubai is a relatively painless process, which will be faster if you are knowledgeable about the country and enter into discussions with a clear idea of what you want to achieve and where you want to go.
However, knowing the complete whereabouts turns out to be impossible for any investor and might take a sufficient amount of time.
To sort the proceedings quickly and effortlessly, most business owners prefer to carry out the process under the guidance of a guide, who will get you your offshore company formation in no time.
At Commitbiz, the commitment to customer support and strict confidentiality policy ensures you understand the global business benefits that an offshore company can provide. We stand as one of the leading business consultants in the UAE whom you can rely on to carry out the business process at ease.
For more details, feel free to contact our business experts today-we'd be glad to assist!
1. Can a Dubai offshore company access UAE’s double tax treaty?
2. What is the minimum age of a director for an offshore company?
3. Does one have to come to Dubai to open an offshore company?
No, you may remotely work on opening your company unless all the documents are perfectly provided.