What is a Dubai offshore company?

Dubai offshore company refers to any company that has its registration of incorporation in Dubai but operates outside Dubai. Dubai Offshore Company can denote a diversity of foreign-based entities, accounts, or other financial services. To qualify as a Dubai offshore Company, the business must be based in a country other than the corporation or financier’s homeland. If you are looking for minimum to no taxes on your corporate income and total privacy of your business, then look no further; Dubai offshore company is your answer. Dubai Offshore company registration is a profitable, tax-effective, and cost-efficient business structure for foreign venture capitalists planning to be successful entrepreneurs globally. According to the relevant rules, these offshore businesses are known as offshore companies or international business companies.

Dubai Offshore Company vs Freezone Company

Confused between an offshore company and a Freezone company setup? Which business structure should you adopt for your company registration? Both of these setups have their benefits and disadvantages. Our experts at Enterslice will help you every step of the way in curating the best-fitted business structure to your needs.

Advantages of a Dubai offshore company

List of reasons why businessmen prefer Dubai offshore company

No taxes: Dubai doesn’t levy any taxation on the corporate income of an offshore company
Assets protection: Business owners to keep their assets separate from their operating entities
Full ownership of your business
Total privacy
Simple setup procedure
No accounting obligation
Low company incorporation fee
International trade opportunities
Intellectual property rights
State-of-the-art infrastructure

The downside of a Dubai offshore company

List of reasons why some corporates don’t prefer Dubai offshore company setup

No business license, so can only do business internationally.
You are not allowed to rent premises in Dubai, employ staff in the country, or apply for residence of work visas for the employees.
Dubai Offshore businesses are not allowed to take the benefits of double taxation treaties to lower global withholding tax.
Dubai offshore company owners cannot invest in Dubai’s real estate.

Perks of a Freezone Company

The Dubai Free Trade Zone (FTZ) is a special economic zone created to offer tax and tariff advantages to international businesses. In Dubai, there are around thirty free zones. A distinct set of laws and regulations apply to free trade zones in Dubai and the United Arab Emirates. Every Dubai-free zone has its own set of laws and guidelines. Here are a few advantages of the same

A vast array of commercial ventures with up to 3000+ licenses
Quick and easy procedure with no logistical problems
Paid-up share capital is not necessary.
Foreign investors are allowed to own 100% of their company in Dubai-free zones.
International communication

Downside of Dubai free zone

Along with all the benefits, there are some downfalls of the Dubai free zone

Trade Restrictions within the UAE
Restrictions on Expansion Onshore
Restricted to certain locations
Limitation of activities

Locations for setting up a Dubai Offshore company

Different regions of Dubai offer different types of offshore companies. While making such a decision, one must include current political situations, specific compliance requirements, and the laws and regulations of the country or state. Depending on the nature of your business, the locality where you reside, and what assets you will be holding, Enterslice helps you select a place to set up your Dubai offshore company.

Jebel Ali Free Zone Authority (JAFZA)

The Jebel Ali Free Zone was established in 1979 by an order issued by Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai. It started operating in 1985 and is currently the largest free trade zone in the world. One of the biggest ports in the world is the Jebel Ali port, which the Jebel Ali Free Zone, an industrial zone, encircles. Under the Jebel Ali Free Zone Offshore Companies Regulations 2003, the Offshore Company was announced by the Dubai Government and the Jebel Ali Free Zone Authority (JAFZA) in 2003.

Essence of JAFZA

Shareholders: A minimum of one shareholder is required. Corporate owners are accepted.
Directors: Corporate directors are not allowed, and a minimum of two directors are needed. The public register does not allow access to directors' private information.
Secretary: A corporation must have a secretary. A director of a firm may also serve as the company secretary.
Share Capital: There is no required minimum share capital
Annual Account Reporting: Every corporation is required to retain accounting records for a maximum of ten years from the date of preparation, which an auditor from the approved list of auditors may review.

Benefits of setting up a Dubai offshore company in JAFZA

100% ownership of the foreigners
Ownership of local real estate: Direct ownership of local estate is restricted to JAFZA Offshore firms only. Any property owned by a JAFZA Offshore Company in Dubai requires both developer and Free Zone permission.
Shares in onshore companies: The JAFZA offshore companies are one of the offshore companies in Dubai that are allowed to conduct business with the free zone companies as well as the local businesses. Owners of Dubai offshore companies in JAFZA are permitted despite the general prohibition of doing business on the mainland.
Local bank accounts: A Dubai Offshore Company can hold multi-currency bank accounts to conduct recurring international commerce transactions.
Privacy of Shareholder/Director – The privacy of shareholders and directors is maintained in Dubai offshore company.
Inspection – The local registrar assigns inspectors to examine a Dubai Offshore Company's operations. The business owner must bear the entire expense of the inspection.

RAK Offshore Company Formation

The Ras al Khaimah free zone, one of the UAE's fastest-growing emirates, is located one hour from the centre of Dubai. The RAK-free zone has the highest level of industrialization, with manufacturing accounting for 26% of GDP. RAK is one of the free zones that businesses choose the most when trying to optimize their return on investment because of its 25–50% lower investment rates.

The government of Ras al Khaimah established the RAK Offshore Company in September 2006. controlled by the 2006 International Companies Regulations of the Ras Al Khaimah Free Trade Zone Authority.

Essence of RAK

Shareholders: A minimum of one shareholder is required. Corporate owners are accepted.

Directors: Corporate directors are not allowed, and a minimum of two directors are needed. The public register does not allow access to directors' private information.

Secretary: A corporation must have a secretary. Moreover, a director may serve as the company secretary;

Share Capital: There is no need for a minimum share capital requirement.

Annual Reporting : From the date of preparation, every corporation must hold the accounting records for up to 7 years. Filing these accounts with the RAK authorities is not necessary.

Ownership of local real estate: After the policy updates in 2019, RAK Offshore companies are allowed to own a local estate directly, even without a business license.

Benefits of setting up a Dubai offshore company in RAK

Hundred per cent ownership of foreign investors
Shares in Local Companies – The authorities in RAK permit offshore companies to own shares in both onshore (LLC) and free zone companies despite a common injunction prohibiting offshore companies from doing business with UAE residents.
Local Bank Account – A Dubai Offshore Company can hold multi-currency bank accounts.
Quick Incorporation: After all applications and due diligence credentials are accepted, an RAK offshore company will normally be registered in one week;
Shareholder/Director details: The privacy of shareholders and directors is protected.

Ajman Offshore Companies (AFZ)

In 1988, an autonomous status under the Emiri Decree No. 3 of 1996 by the Ruler of Ajman, H.H. Sheikh Humaid Bin Rashid Al Nuami, was granted to Ajman Free Zone. In the recent past, there has been an apparent increase in the number of company formations in Ajman offshore companies.

Essence of Ajman offshore companies

An Ajman offshore company is comparatively cost-effective and needs a negligible budget for operative costs.
You may easily make any changes to the way your firm is structured. For instance, you can incorporate a change in a corporate shareholder within a week.
Most of the key features of Ajman offshore companies are similar to RAK offshore companies.

Benefits of Ajman offshore companies

Modern legislature
0% taxes
100% possession by immigrants
Single or multiple directors
Can own shares in mainland companies or local companies
No paid-up capital required

Process of setting up a Dubai offshore company

The procedure for registration of a Dubai offshore company is very simple. Our team of experts consisting of CAs, CSs, consultants, and advocates at Enterslice can make your vision of owning a Dubai offshore company come true.

5 simple steps to follow in setting up your company

A trade name: Choosing a trading name that is unique and also has the essence of your business vision is necessary. It plays an integral part in setting up an offshore business. It should be exclusive and catchy and also law-abiding.

Choosing a business structure: Defining the structure of your company is a critical step. A Dubai offshore company can be registered as a Foundation, Limited Company, Holding Company (IHC), and International Business Company (IBC). Deciding on your corporation type makes setting up goals and purposes easier.

Submit the required documents: The following documents are essential to be provided at the time of registration of a Dubai offshore Company

Documents Required for Offshore Company Setup - Individual Shareholder

A copy of at least a valid 6 months passport
If needed, then a copy of the Visa Page
If needed, then Emirate ID
Passport-sized Photos
Personal Information Sheet or Application Form
3 Name Choices

Documents Required for Offshore Company Setup - Corporate Shareholder

Company Trade License / Certificate of Incorporation
Memorandum of Association
Board of Resolution for Company Setup and Appointment of Authorized Signatory
UBO List
Incumbency Certificate
3 Name Choices
Passport copy of Company Manager.
Visa copy of Company Manager
Emirate ID of Company Manager

The registration is completed once the following documents are received: Certificate of Incorporation, MOA and AOA, Register of shareholders/directors/secretary, Share Certificate, and Company stamp.

Opening an Offshore Bank Account: The final step after successfully registering your offshore company is opening an onshore bank account that shall be used for your company’s business operations.

Fee for registering a Dubai offshore company

Registration of Dubai offshore company can range from between AED 10,000- 40,000/depending on the jurisdiction and also the nature of your company. The size and specifications of every venture decide the cost of registration of the same. But it approximately lies between the above-quoted prices. We at Enterslice offer the best packages in the market, making it budget-friendly for you to establish your Dubai offshore company.

Businesses preferred in Dubai offshore company structure

Holding property
consulting for international trade
Brokering operations
Ship registration services trading
companies that hold real estate
corporations that own intellectual property (IP)
shipping companies
Internet-based advertising agencies
Logistics and distribution companies
Companies engaged in general (international) trading
Expert assistance and guidance

Businesses not preferred in Dubai offshore company structure

Commercial
Indemnification
Media
Aviation
Conduct business with onshore companies in the UAE
Establishing a branch in the UAE