An offshore company in the UAE is a legal entity that is incorporated in a jurisdiction outside of the UAE and registered with the UAE authorities to conduct business activities outside of the UAE.
These companies can own assets, enter into contracts, and conduct business operations in any country, making them a popular choice for international businesses. Hence Businesses opt for Offshore company formation in UAE to take advantage of the country's tax-free environment, flexible regulatory framework, and favorable business climate.
What is Offshore Company Formation in UAE?
Offshore company formation in UAE is the process of creating a legal entity in a jurisdiction outside of the UAE but registered with the UAE authorities to conduct business activities outside of the UAE. The process includes selecting a registered Business setup agent, submitting the necessary documents, and obtaining the required licenses and permits.
Generally, most business setup conditions would be fulfilled in all aspects. However, some requirements vary, for instance, privacy, security, profitability, etc. Such conditions are satisfied by appropriate Offshore administration for business setup.
Offshore licenses enable the investors to set up their businesses without a physical location and the operations are also controlled remotely! The offshore companies are registered in a way differently than the Mainland and Free Zone companies, and the investors are issued only the certificate of incorporation and not the traditional business license.
BMS Corporate is here to assist you in building your business empire in the Offshore setup. We also provide the most effective services in business setup in UAE Mainland and UAE Free Zone company setup.
What are the advantages of establishing an offshore business?
Offshore companies can provide a gateway for businesses to access the UAE's thriving business landscape and gain a foothold in the Middle East region. In addition to that Starting a business in UAE Offshore has some major advantages
1. Expand your market internationally
Setting up a business in an offshore location could help you expand your business at an international level cost-effectively. You could establish an offshore business without having a physical infrastructure, thus bringing more international deals and collaborations.
2. Anonymity in Business
The offshore business setup enables it to maintain its anonymity and ensures limited liability. You need not disclose the financial information of your company or the ownership details to the public.
3. Ensures multiple tax benefits
Offshore business setup exempts you from paying various taxes, such as Corporate Tax, Income Tax, Sales Tax, Property Tax, etc. Moreover, you could avoid the awful practice of double taxation. While conducting international business outside the UAE, you need not pay the same tax twice in a different country.
If you have an offshore business in UAE, here are the tax rates you are liable to,
- Corporate Tax - 0%
- Income Tax - 0%
- Inheritance Tax - 0%
- Property Tax - 0%
- VAT - 5% (only if you had VAT-related supplies)
4. Easy Setup
Offshore business setup has designed the most favorable conditions for investors worldwide. Besides being exempted from taxes, an offshore business is also exempted from annual auditing, which means you need not file audited financial statements in most of the emirates of the UAE.
5. Access to better global funding
The offshore business setup is well-positioned globally. Its impressive reputation greatly impacts how a foreign investor would look up to your business. Moreover, the present economic situation in the UAE helps your business prosper.
Types of UAE Offshores to Start a Business
To see your business flourish in the UAE offshore, you must choose the territory to establish your presence wisely. In the UAE, the organization comprises seven Emirates, whereby each emirate has an administration of its own. However, only 3 emirates are authorized to have offshore companies.
Let us look at them:
RAK International Corporate Center (RAK ICC)
The RAK government released the RAK ICC, a corporate registration for offshoring businesses, thus enabling the evolution of International Business Companies (IBC) in the UAE.
Here are the reasons that make RAK the ideal offshore region in the UAE:
- RAK offshore business need not have local shareholding
- Offshore companies in this region can buy shares of local companies although there is a general ban on conducting business within the UAE
- RAK Offshore companies own a multi-currency offshore bank account to conduct regular international transactions
- An offshore company in RAK need not file annual audit reports
- You need at least one director and a shareholder to initiate an offshore company in RAK
- RAK Offshore companies are eligible to buy real estate in the UAE, even without a business license
Jebel Ali Free Zone (JAFZA)
JAFZA is one of the major trading hubs in Dubai, which was the first established free zone area in the UAE. JAFZA offshore company shares most features of RAK offshore company. Yet, there are some features that make JAFZA a unique offshore community:
- JAFZA offshore companies help you establish your business in the major business hub of the UAE
- Business setup in this offshore region is relatively expensive
- You should file the annual audit report to the JAFZA authorities
- The shareholder should visit the UAE to complete the establishment process of the offshore company
Ajman Free Zone
This free zone is situated in the Emirate of Ajman in the UAE, which has created its offshore administration and can include your business at moderate prices.
The Ajman free zone shares feature similar to that of the RAK offshore business.
Here are some unique features that make this community a suitable choice for a business setup:
- This offshore company is comparatively cost-effective, requiring a minimum budget for functioning
- You can easily carry out changes in the business structure. For example, you can implement changes in corporate shareholders in a week
- Offshore companies in Ajman free zone require at least one director and a shareholder. Moreover, the shareholder and director could be the same person
Start an Offshore Business in UAE in RAK ICC, AJMAN or JAFZA Offshores through BMS Auditing Company Formation Services and gain the benefits of Offshore.
Documents Required for Offshore Business Setup
Document requirements differ based on who owns the company or the business. Here are the crucial documents that are required for Offshore Company Formation in UAE.
For Individuals:
- Passport copy of the owner/shareholder that is attested
- Proof of residence
- Bank reference document
- Owner/shareholder details
- Chosen name for the company or the business to be formed
- Business activities of the newly set offshore company
- Hierarchy of possessors
For Corporates:
- Resolution from the Board
- Memorandum of Association (MOA)
- Attested certificate of the parent company holding the names of the shareholders/directors
- Hierarchy of possessors
Offshore Company Registration Process
To form an offshore company in the UAE, we follow a set of procedures. It is quite easy to form an offshore company. Let us look at the steps:
1. Choose the right name for the company
The initial step is to verify the name of the company with the registrar. There are certain words that must not be included in the company name:
- Bank
- Insurance
- Building
- Society
- Fund
- Chamber of Commerce
- Trust
- Royal
- Finance
- Chartered
- Mutual Fund
- Emirate
- Emirates
However, the company name shall include Ltd. or Inc. (Incorporated)
2. Fill out the application
Once the name is selected for the business or the company, we have to fill up an application form with relevant documents such as
- ID and address proof of the directors and shareholders
- CV of the directors and shareholders
- Well-composed business plan
- Photocopies of directors and shareholders
We hereby note that the submission of these documents varies among individuals and corporate entities.
3. Submit the relevant documents
Once we collect the required documents, we submit them to respective authorities who review and declare approvals.
4. Compose the MOA and the AOA
On getting the approval, we need to compose the Memorandum of Association (MOA) and
Articles of Association (AOA) in English language, applicable to International Business. Once the MOA and AOA are prepared, they are reviewed by the concerned authority, and
on approval, we start the company.
5. Open an Offshore Business Bank Account
Opening a bank account for an offshore company is the final step, whereby company owners could carry out business transactions easily.
The offshore administrations help the owners to open business bank accounts in various locations.
Offshore Company Setup in UAE
BMS has been a trusted partner for business consultation in the UAE, GCC countries, and across the globe. We assist you in setting up your business in the UAE Offshore region through our effective business setup services. We give the utmost attention to your business requirements.
Apart from Offshores, you can establish your business anywhere in UAE through our Business setup Services in UAE including,
- Mainland Company Formation in UAE
- Business Setup in UAE Free Zones
- Business Setup in Abu Dhabi Free Zones
Our team has highly experienced consultants who help you follow the necessary steps in establishing an offshore business. We also help you collect the relevant documents based on the ownership- individual or corporate business.
For assistance regarding Offshore business setup, call BMS Today!
FAQs
1. What is the Time limit to start an offshore business in the UAE?
Once Sovereign gets all of the essential registration paperwork from all shareholders and directors of the new business, it takes roughly one week to register a RAK ICC offshore company. A JAFZA Offshore business will take around 4 weeks to register, but an AJMAN Offshore firm would take only 5 days to form.
2. Is it mandatory to come to Dubai for the registration process?
As long as you submit all the required documents, and your signature on the documents is certified, the whole process could be done through post. The primary documents to be submitted are a passport copy, utility bill, reference from the bank, and CV.
3. Can I receive a residency visa from an offshore company?
No. This is one of the major disadvantages of an offshore company. You cannot obtain a UAE residence visa from an offshore company.
4. Is there any audit and accounting regulations for Offshore companies in UAE?
Yes, there are specific accounting and audit requirements for offshore companies in the UAE. Offshore companies are required to maintain proper accounting records and prepare financial statements that comply with international accounting standards.
BMS Auditing provides both business setup and auditing services to establish and handle financial management effectively.
