There are many cost-effective and tax efficient ways to do business in the UAE. Set up anywhere in the Emirates and you’ll benefit from 0% tax on all income, both personal and corporate.
Establish your business in a free zone and the advantages continue – no currency restrictions, customs tax exemption and the freedom to repatriate all capital and profits to name just a few.
Then there is another option, possibly the most cost-effective and tax efficient of all: offshore company formation.
Offshore company formation offers all the benefits of doing business in the UAE with less bureaucracy, greater tax efficiency and increased confidentiality. And, as a whitelisted country with a good value proposition and Double Taxation Avoidance Treaties with more than 40 countries, the UAE is the ideal place to register your offshore company.
It must be said, however, that there are restrictions to running an offshore business. Not least the fact that you are unable to carry out any trading activities within the UAE itself. However, if you’re looking to start a company to purchase real estate, effectively manage your wealth or to improve your tax situation, an offshore setup is the perfect fit.
What is an offshore company?
UAE offshore companies are part of the free zone concept and offer many of the same benefits. But while offshore companies are registered within a free zone, they differ from regular free zone companies in many ways and should not be considered a like for like alternative.
In short, an offshore company is a corporate entity that does not carry out any business activities in the country in which it is registered. When you set up a UAE offshore company, therefore, you cannot take on any physical premises in the Emirates, nor can you carry out any trading activity in the country.
A major advantage of offshore companies is that, unlike regular free zone companies, there are no limitations on the minimum capital required for company incorporation.
Features of an offshore company in the UAE
While you may not be able to trade within the UAE, you can still take advantage of the country’s incredibly welcoming business environment. Set up an offshore company here and you can benefit from the UAE’s low tax regime, invest in the country’s thriving real estate market in the most tax-efficient way possible, conduct international trade with total anonymity – and much more.
Activities allowed in an offshore company include:
- Advisory and consultancy services
- Investments and wealth management
- Real estate ownership
- Intermediary broking
- Purchasing and holding stakes in corporate entities
- International and professional services
Benefits of an offshore company in the UAE
There are many great reasons to apply for an offshore license in the UAE. Offshore companies benefit from:
Greater tax efficiency: An offshore company structure can allow you to minimise your tax liability on profits. Setting up offshore in the UAE means you benefit from the country’s tax regime – that’s zero percent on both corporate and personal income.
Total anonymity: If your business is of a confidential nature, an offshore setup is certainly a wise choice. Why? Because when applying for an offshore license in the UAE, there is no need to disclose the names of company owners.
Trading opportunities: Setting up a UAE offshore company allows you to trade with every corner of the world with minimal red tape, all while taking advantage of the UAE’s incredibly attractive tax rate.
Investment flexibility: An offshore setup allows you to hold property among multiple owners – up to 50 shareholders are permitted.
Access to banking facilities: UAE offshore companies are permitted to open and operate multi-currency corporate bank accounts in the UAE while trading internationally.
How to set up a UAE offshore company
The first step to take when setting up offshore is to choose a jurisdiction. One of the most popular, and cost-effective, in the UAE is the Jebel Ali Free Zone Authority (JAFZA).
JAFZA offshore companies must be formed with at least one shareholder, two directors and a company secretary. While annual reporting is required, there is no requirement for paid up share capital, meaning formation costs are low. In all, JAFZA offshore company registration takes around four weeks.
Whether you opt for a JAFZA offshore company or decide to set up in a different UAE jurisdiction, the formation process is relatively straightforward with the right support.
Simply make your application to the managing authority of your chosen jurisdiction, along with some supporting documentation. Required documents include a copy of all shareholder and director passports, the name of your company, the activities you intend to undertake and proof of residency of company owners.
While this process isn’t overly complex, it is vital that your application is both complete and correct. That’s why it is advisable to work with an expert in offshore company formation when establishing your business. A company setup agent can manage the entire process for you to ensure there are no unnecessary delays. When working with a setup agent, it may be possible to establish your offshore company without visiting the UAE.
Dubai offshore company cost
The total cost of registering a company offshore depends on multiple factors including the number of shareholders and directors you require, the type of activities you wish to undertake and the jurisdiction you wish to set up in.
The best way to get an idea of cost is to speak with a company setup agent who can get to know your requirements and outline your options for you.
Registering your UAE offshore company
If you are looking for a private, flexible and tax-efficient way to do business, a UAE offshore setup could be the perfect fit. And, with the right guidance, getting set up is relatively straightforward.
But the right guidance is key. That’s why it’s always advisable to undertake the steps with the assistance of a registered company formations agent to eliminate any potential issues that might arise.
With more than 15 years of experience in company incorporation, Worldwide Formations can help you get your business up and running within a matter of weeks. We’ll manage the entire process on your behalf and correspond with all relevant authorities for you. All you need to do is wait for the green light to start doing business.
Worldwide Formations helps entrepreneurs in the UAE with all their company setup needs. For more information, call us now on 800 FREE ZONE (800 3733 9663).