September 13, 2015
The words “offshore business” and “offshore company” have no precise legal, tax or general business meaning. The word “offshore” often means nothing more than anywhere other than the place of physical location of the person. We use the words “offshore business” and “offshore company” as terms of definition in connection with matters such as the structuring of international business and family wealth management or tax planning.
An idea of the Free-Zone authorities, the concept of an “Off-Shore” company in the UAE is a flexible corporate entity which allows a mixture of On-Shore and Off-Shore features. Registered within a Free Zone, the Offshore Company has several of the benefits of a standard Free-Zone Limited Liability Company (FZ-LLC) but is not intended as a substitute for a FZ-LLC company.
An Off-Shore company can conduct business outside of the UAE – but generally not within.
However, it can open and operate bank accounts with UAE-based banks, can own investments inside and outside of the UAE and can also own real estate in Dubai in certain designated areas which are approved by the Free Zone registrar. Income derived from its investments including real estate can be held in the company bank account and repatriated thereafter. Unlike other Free-Zone companies, there is no minimum capital requirement for an Off-Shore company to incorporate.
An international business company or international business corporation (IBC) is an offshore company formed under the laws of some jurisdictions as a tax-free company which is not permitted to engage in business within the jurisdiction it is incorporated in. IBCs are offshore companies that are most commonly used for offshore banking, to conduct international trade, investment activities, to offer professional services and for asset protection.
Companies registered in the UAE Free Economic Zones are tax exempted, no VAT applied, no charges related to the payment of wages. The only exceptions are for some activities, such as oil sector and tourism. Consequently, the United Arab Emirates in fact, being a tax-free country, do not fall under the category of “tax havens” and has never been a blacklisted offshore jurisdiction.
The UAE signed treaties with the following countries for avoidance of double taxation:
Austria, Azerbaijan, Bangladesh, Belarus, Belgium, Bulgaria, Bosnia and Herzegovina, Brazil, Chile, China, Germany, Holland, Hong Kong, Greece, Egypt, Georgia, India, Indonesia, Ireland, Italy, Yemen, Jordan, Canada, Cyprus, China, Colombia, Korea, Lebanon, Libya, Luxembourg, Malaysia, Malta, Mauritius, Mongolia, Mozambique, New Zealand, Pakistan, Poland, Romania, Russia, Seychelles, Singapore, Syria, Sudan, Tajikistan, Thailand, Tunisia, Turkey Turkmenistan, Ukraine, Uzbekistan, Finland, France, Czech Republic, Chile, Switzerland, Sri Lanka, South Korea and Japan
1. Provides confidentiality over financial affairs and allows wealth growth without interference.
2. Reduced tax liability.
3. Holding Companies.
4. Eliminate or minimization of capital gains.
5. Accounting or auditing not mandatory
6. Property owning companies.
7. Internet Trading.
It does not need to have physical offices in the UAE.
It may not carry on business within the UAE.
It may not obtain UAE Residency Visa.
It may have non UAE resident as director or shareholder.
It may have UAE resident as director or shareholder.
It may have corporate shareholder/corporate director
It does not require the shareholder/director to be physically present in the UAE for incorporation
It may own real estate in the UAE, with prior authorization from RAK Investment Authority.
It may not do banking and insurance business without special license.
It may maintain bank accounts and deposits in the UAE or worldwide.
It is not obliged to maintain its books and records.
It may hold shares in other UAE and worldwide companies.
It may own yachts registered in the UAE.
There are three offshore jurisdictions in the UAE: Ajman Offshore, RAK Offshore, and JAFZA Offshore. All of these jurisdictions offer you the same benefits and uses of an offshore company, except JAFZA offshore which is mostly used for holding Dubai real estate property and of course international business. The only difference comes in the costs of incorporating and time line for these jurisdictions.
For your offshore company requirements, RAK & Ajman Offshore Company formation is an ideal option and location for your international business operations and asset protection schemes. Particularly, if you are looking for an offshore location in the growing economies of Middle East countries where you can register your LTD offshore company without too much high cost or hassle.
In UAE there are no taxes to pay and minimum capital needed is USD 1. Since it is not resident in the UAE no local office and visas are allowed in the name of the offshore company. Offshore company can do only international business. However it can own assets in the UAE and accept payments, issue invoices from UAE.
The company must have a Name, Shareholder, Directors and a Secretary. A Single individual can be all these. You will need to provide a set of three names for approval of least one of them. Some information for opening a bank account will also be required.
The company name must not contain the following words and must not be listed business activities: BANKING, INSURANCE and REINSURANCE.
The name of the company must end with “LTD” only.
Legal Maxims is one of the UAE’s leading International Corporate law firms and we offer legal consultation for: IP Services, Business Incorporation Services, HR Services, Liquidation Services, Auditing & Accounting and a lot more. Our team of professionals is experts at handling and managing all kinds of legal, paralegal, and corporate procedures with ease.
If you need help with Offshore Company Formation UAE , do not hesitate to contact us and we will respond to you with a free quote!