7 things to know before starting an offshore company in UAE
UAE is a land of business opportunities and there are immense ways to set up businesses here. You can form a mainland, Freezone, or Offshore company in Dubai or any region in the UAE. Offshore company formation is one of the best opportunities for investors willing to channel their funds and capitalize on international markets.
What is an offshore company?
An offshore company is an organization that is operated outside of its country of origin. An offshore company is also referred to as offshore company incorporation or organization. It can be owned by an individual or can have multiple business partners or shareholders.
The business activities of an offshore company are performed from outside of its legal registration country. The offshore companies are framed under the no-tax jurisdiction law by the Government of the nation. The reason for this is to enhance the wealth management of the nation along with its economy.
There are several reasons why so many individuals and businesses incorporate an offshore company. However, the following are the main reasons to set up an Offshore company in the UAE:
Anonymity, privacy, and the highest level of privacy protection
No accountant costs
No currency restriction
Simplicity in international operations
Complete repatriation of capital and profits
100% foreign ownership in free zones of UAE
Mainly Offshore companies are registered in the three popular jurisdictions within the UAE:
Every new businessman or entrepreneur incorporating an Offshore company in the UAE must contemplate a few significant things that can be extremely helpful before starting a UAE Offshore company formation.
Business activities that an Offshore company formation is best fit for:
Shipping & Shipping Management Services
International & Professional Services
Shareholding and Management of other companies
Personal/Corporate Investment Companies
It is to be noted that there is no provision for Offshore companies to do business within the UAE. All business activities are to be channeled internationally.
Here are the Seven things that one must remember while starting a UAE Offshore company:
An Offshore company in the UAE does not get a business license, unlike other operating jurisdictions such as Mainland or Free Zone Companies that are formed with a business license, an Offshore company only gets a certificate of incorporation.
Offshore companies are not allowed to import any goods into the UAE market. Neither can these companies lease offices or other commercial premises in the UAE nor secure residence or work Visa for staff
Offshore companies in the UAE also need to have a memorandum and articles of association as it’s constitutional documents. This means that the company cannot carry out business activities in the UAE and its function is to hold the assets for the parent shareholders.
There are three different Offshore jurisdictions in the UAE. All of these have their respective registration authorities and they might require different documents for the registration of an offshore company.
Offshore companies in the UAE follow the Know Your Customer (KYC) process. The KYC process requires documents such as passport copy, proof of address, bank reference letter, and a bio-data of the investors. This helps refer to bank regulations of investors, track unethical practices such as identity theft, financial fraud, and money laundering.
Bank accounts need to be created to get an Offshore company registration in the UAE. An Offshore company cannot be registered without a company registration agent.
UAE Offshore companies offer a productive and prolific environment for investors from around the world. Tax avoidance and tax evasion are two very different things. And setting up Offshore companies in the UAE are legitimate ways to avoid (not evade) taxes. With an offshore company set up in the UAE, you would get an exemption from paying several different taxes such as corporate, income, sales, inheritance, property, and personal tax.
Forming an offshore company in the UAE is a legitimate medium to help your business grow. Most business investors at a global level prefer to proceed ahead with the guidance of business experts who hold vast knowledge of the company incorporation process.
Our business setup consultants are well versed with the Offshore company incorporation proceedings and can help you deal with it in a hassle-free way. If you are looking forward to starting your offshore company in the UAE, feel free to contact us today and we’d be happy to help you.