Dubai being a myriad of opportunities has always been a top priority of foreign investors. The city’s stable and secure business environment, strategic location, and flexible tax regime have made it an ideal place for business. One of the most popular business set-ups that attract millions of entrepreneurs is the offshore company.
Have you heard of an offshore company in Dubai before? Well, in a few minutes you will get well acquainted with the offshore formation in Dubai. So, if you are looking for some top-notch business opportunities in Dubai then stay put, we have rounded up everything that you need to know!
Let’s begin with knowing, what’s an Offshore Company in Dubai?
Dubai Offshore Company
An offshore company, as the name signifies is a business that operates outside the country from where it is formed. In Dubai, offshore companies can be owned by a corporate or individual, However, the company is not permitted to occupy office space in the UAE. Such companies are bound by no-tax jurisdiction law and are formed with the sole motto of reducing any kind of tax. These differ from the free zones, the offshore company owner cannot conduct business activities within UAE whereas Freezone owners are not eligible to perform business activities within their zones.
Is it beneficial to set up an offshore company in Dubai?
There are numerous benefits of establishing an offshore company in Dubai, these are:
All the information about your company will be confidential. The property portfolio and transaction details will not get public.
Offshore companies are cost-effective as you are not liable to pay any licensing and registration overheads.
3. Limited Liability.
It is treated as a limited liability company, so your personal liability is reduced to a great extent. Plus, you have the benefits of 100% ownership. Thus, offshore companies are a safeguard of your investment.
Offshore companies are free from paying any VAT or corporate tax. And this is the reason why most foreign investors are lured to it.
What’s the procedure to start an offshore company in Dubai?
The process of the formation of an offshore company in Dubai is quite straightforward. All you have to do is follow some simple steps and you will own an offshore company in a couple of weeks. The steps involved are:
1. Pick a Company Name.
The first and foremost step is to decide a name for the company and get it verified by the Registrar. Make sure to include Incorporated or Ltd in the name. And you cannot include any of these words:
- Building society
- Mutual Fund
- Chamber of Commerce
2. Submit the Application Form.
The next step is to submit the application form to the concerned authorities.
After your form gets approved, you have to draft an MoA(Memorandum of Association). The Articles and Memorandum must be in the English Language as it is best suited for international trade.
4. Start a Company.
Once your documents and MoA are reviewed by the authority you can officially start the company.
Don’t forget to open an offshore bank account after registration gets completed.
- An offshore company is not allowed to carry out business within the UAE except for opening a bank account and purchasing real estate.
- An offshore company holder cannot receive the residency visa of the UAE.
What documents are required?
There are slightly different formalities for a corporate and individual for establishing an offshore company in Dubai.
Documents necessary For Individuals:
- A document verifying that an official agent has been appointed for the setup of the company.
- The application form provided by the agent.
- Applicant’s personal profile such as professional background and resume.
- Copy of the passport attested by the UAE officials.
- Authentic reference letter from the concerned bank.
- Any proof of residence. It can be a utility bill or electricity bill, older than 3 months.
- Attested and Notarized power of attorney.
- A few options for the business name.
- All the important details such as percentages and addresses of shareholders or directors.
Documents necessary For Overseas Companies:
- A well-planned business idea.
- An application form that will be provided by the concerned agencies.
- Proper documents verifying that an agent has been appointed for the setup.
- A certified reference letter from the bank.
- Original certified reference letter from the company’s bank.
- Notarized and attested copies of the Certificate of Incorporation by the UAE Embassy.
- Copy of MoA attested and notarized by the UAE Embassy.
- Power of Attorney in the favor of Manager, attested and notarized by the UAE embassy.
- Copy of reference letters from the bank, passport, proof of residence, resume of shareholders and directors of the offshore company.
- Authentic reference letter of authorization from the bank.
- Proof of residence. It can be a bank statement, utility bill older than three months.
JAFZA and RAKFTZ
JAFZA and RAKFTZ are the two entities that allow the registration of an offshore company in Dubai.
In 2003, The Jebel Ali Free Zone Authority (JAFZA) introduced offshore companies under the regulation of Jebel Ali Free Zone Offshore Companies-2003.
Some benefits of registration in JAfZA are;
- You can get the complete ownership of the business.
- It allows you to purchase local real estate in Dubai.
- You can hold a multi-currency bank account in the UAE.
- Your personal information will not be disclosed.
The Ras al Khaimah government started the International Company structure in 2006. It works within the Ras Al Khaimah Free Trade Zone Authority International Companies Regulations-2006.
- It ensures 100% ownership.
- You can own a multi-currency bank account in the country.
- The company registration will not take more than a week’s time.
- The company’s personal information will not be revealed.