What is an Offshore Company?
An offshore company is a legal business entity that is incorporated in a foreign jurisdiction, typically in a low-tax or tax-neutral country. These offshore jurisdictions are often referred to as tax havens or financial centers.
It’s important to note that regulations and laws may change over time, and each offshore jurisdiction may have its own specific rules and requirements. Therefore, it’s essential to consult with legal and financial professionals who have up-to-date knowledge of UAE regulations before establishing an offshore company.
What is a UAE mainland company?
A UAE mainland company, also known as an onshore company, refers to a business entity that is registered and licensed to operate within the mainland territories of the United Arab Emirates (UAE). The UAE is divided into different jurisdictions, with mainland areas and various free zones. Each jurisdiction has its own set of rules, regulations, and benefits for businesses.
A mainland company in the UAE allows businesses to operate and conduct commercial activities within the local market, dealing with both local and international clients. Unlike free zones, which offer certain tax and ownership benefits but come with restrictions on conducting business outside the free zone or within the local market, mainland companies have more flexibility in terms of geographical reach and can trade freely across the UAE.
The main reasons for establishing an offshore company include:
- Tax Benefits: Offshore companies are often set up in countries with low or zero corporate taxes, which can result in significant tax savings for businesses and individuals.
- Confidentiality and Privacy: Offshore jurisdictions may offer enhanced privacy and confidentiality as the details of the company's ownership and financial transactions may be kept private or are subject to less public scrutiny.
- Asset Protection: Offshore companies can be used to protect assets from legal risks, lawsuits, and creditors in their home countries.
- Ease of Incorporation: The process of setting up an offshore company is often streamlined and efficient, with minimal bureaucratic red tape.
- Access to International Markets: Offshore companies can facilitate international business transactions and open up opportunities to access global markets more easily.
- Reduced Regulations: Some offshore jurisdictions have relaxed regulatory requirements and reporting obligations compared to other countries, making them more attractive to certain businesses.
General outline of the steps involved in establishing an offshore company in Dubai:
- Choose an Offshore Jurisdiction:The United Arab Emirates has several offshore jurisdictions, including Ras Al Khaimah (RAK) International Corporate Centre, Jebel Ali Free Zone (JAFZA) Offshore, and Ajman Offshore. Select the one that aligns best with your business needs.
- Select a Corporate Name:Choose a unique name for your offshore company that complies with the naming guidelines of the chosen jurisdiction. It should include the words "Limited" or "Ltd" to denote its legal status as an offshore entity.
- Pay the Registration Fee: Pay the required registration and license fees as specified by the chosen offshore jurisdiction.
- Obtain Necessary Approvals: Await approval from the authorities. The timeframe for approval may vary depending on the jurisdiction and the completeness of your application.
- Open a Corporate Bank Account: Once the company is registered, you can open a corporate bank account in Dubai to facilitate business transactions.
- Comply with Ongoing Obligations: Ensure that your offshore company complies with all ongoing obligations, including annual license renewal, maintaining proper financial records, and adhering to any reporting requirements.
- Appoint a Professional Agent: You need to appoint a registered agent in the chosen offshore jurisdiction. This agent will facilitate the company formation process and act as an intermediary between your company and the local authorities.
List of documents required to set up an offshore company in Dubai
- 1. Articles of Association.
- 2. Passport copies and CVs of shareholders.
- 3. Emirates ID cards.
- 4. Comprehensive business plan.
- 5. Certified copy of recent bank statements (6 months).
- 6. Proof of address via utility bill.
- 7. Three potential brand/business names for the company.
- 8. Details of the business activity for the company.
