UAE Offshore Companies and UAE Free Zone Companies are not the same thing. A legal business entity known as an "Offshore Company" is one that was formed with the goal of conducting business somewhere other than its registered jurisdiction or the place of its ultimate ownership.
Ras Al Khaimah (RAK) and the Jebel Ali Free Zone (JAFZA) are the two main jurisdictions in the UAE that provide offshore companies. Both of these "tax free" nations allow 100 percent foreign ownership and have no corporation or income taxes. Over 40 additional nations and the United Arab Emirates have double tax treaty arrangements. In the UAE, offshore companies are allowed to create multi-currency accounts and conduct worldwide commerce.
However, they are not permitted to conduct business with UAE citizens or have physical locations there. Both RAK and JAFZA offer unique advantages. Although JAFZA is the only offshore company that is legally allowed to acquire property in Dubai, RAK is the more affordable of the two. It is important to distinguish between UAE Offshore Companies and UAE Free Zone Companies. Free Zone Companies are onshore organizations that are allowed, subject to some limitations, to conduct business in Dubai. They allow companies owners, directors, and workers to seek residence in the UAE while still being subject to the same 0% corporation tax rate. Both RAK International Companies (RAK ICs) and JAFZA Offshore Companies MUST designate an authorized registered agent in accordance with local company legislation (Sovereign Corporate Services is approved for this purpose).
In 1985, the JAFZA was established. The Jebel Ali Port, one of the largest shipping ports in the world, is surrounded by an industrial region that gives the foreign businesses headquartered their access to the particular benefits of the free zone. These include 15 years of business tax exemption, no personal income tax, zero import or export taxes, no currency restrictions, and simple labor hiring.
Abu Dhabi, the capital of the United Arab Emirates, is about an hour's drive from Jebel Ali, which is situated just outside of Dubai. Just beyond the port area, Al Maktoum International Airport is being built. It will eventually surpass all other airports worldwide in terms of both freight and passenger volume.
Under the Jebel Ali Free Zone Offshore Companies Regulations 2003, the Jebel Ali Free Zone Authority (JAFZA) and the Dubai Government introduced the Offshore Company.
One of the seven Emirates that make up the UAE, Ras al Khaimah is one of the fastest expanding and is located around an hour's drive from Dubai. In the UAE, RAK has the greatest level of industrialization, with manufacturing accounting for 26% of GDP. Its reputation has been cultivated through a business-friendly investment climate and affordable prices. Because business expenses in RAK are 25 to 50% cheaper than those in the UAE as a whole, firms may increase their return on investment.
The RAK Offshore Company, also known as the International Company structure, was introduced by the Ras al Khaimah administration in September 2006. These are governed under the International Companies Regulations 2006 of the Ras Al Khaimah Free Trade Zone Authority.
The Ajman Free Zone (AFZ), one of the UAE's three main offshore jurisdictions, was established in 1988. By luring a sizable number of enterprises to take advantage of the investment rights, AFZ has stimulated considerable industrial growth in Ajman and strengthened commerce, industry, and the financial sector in the UAE.
The competitive advantages and privileges offered by the Ajman Free Zone enable businesses to significantly increase their return on investment.
As a registered agent, we work closely with the Ajman Free Zone to construct custom offshore companies and may offer offshore company setup services. More than 40 Double Taxation Agreements (DTAAs) are available to the business, and it is also a white-listed independent country for offshore use.
Offshore Company Formation in the UAE typically requires the submission of specific documents to complete the registration process. The documents needed for offshore company registration may vary depending on the specific jurisdiction and free zone chosen for incorporation. However, the following are some common documents typically required:
Application Form: A completed application form is usually the first step in the offshore company registration process. The form collects essential information about the company, its shareholders, directors, and the proposed business activities.
Memorandum and Articles of Association (MOA): The MOA outlines the company's objectives, structure, and operational guidelines. It specifies the company's name, share capital, registered office address, and details of the shareholders.
Passport Copies: Passport copies of all shareholders and directors are typically required. The documents must be notarized and legalized.
Proof of Address: Shareholders and directors must provide proof of their residential address. This can be in the form of utility bills, bank statements, or a driving license. These documents should also be notarized and legalized.
Bank Reference Letter: Many jurisdictions require a bank reference letter for each shareholder and director to verify their financial standing and reputation.
Resume or Curriculum Vitae (CV): Some jurisdictions may ask for the CV of shareholders and directors, demonstrating their professional background and qualifications.
No Objection Certificate (NOC): If any of the shareholders or directors hold existing UAE residency or employment visas, they may need to obtain a NOC from their current sponsor.
Share Certificate: The share certificate represents the ownership of shares in the offshore company and must be issued to the shareholders.
Declaration of Trust: In some cases, a Declaration of Trust may be required if the shareholders appoint nominee shareholders to hold shares on their behalf.
Board Resolution: A board resolution authorizing the company's establishment and appointing directors and signatories may be necessary.
Power of Attorney (POA): If shareholders or directors cannot be present for the registration process, a POA may be required to appoint a representative to act on their behalf.
Company Name Reservation: Some jurisdictions may require a company name reservation certificate before initiating the registration process.
It is essential to consult with a professional business advisor such as Oxford Auditing who are familiar with offshore company registration in the UAE to ensure that all necessary documents are prepared accurately and in accordance with the specific requirements of the chosen jurisdiction and free zone.
The timeline for registering an offshore company in the UAE can vary depending on several factors, including the chosen jurisdiction, the efficiency of the registration process, and the completeness of the documentation provided. In general, the process of offshore company registration is relatively faster and more streamlined compared to onshore company formation Dubai.
On average, registering an offshore company in the UAE can take anywhere from a few days to a few weeks. Here is a breakdown of the typical steps involved and their respective time frames:
Document Preparation (1-2 weeks) : The first step involves preparing all the necessary documentation, such as the application form, Memorandum and Articles of Association (MOA), passport copies, proof of address, bank reference letters, and other required documents. The time for document preparation depends on the promptness of the shareholders and directors in providing the necessary information.
Company Name Reservation (1-2 days) :Before proceeding with registration, the proposed company name must be approved and reserved. This step usually takes 1 to 2 business days.
Submission and Review (1-2 weeks) :Once all the documents are ready, they are submitted to the relevant offshore authority for review. The registration authority will assess the application and supporting documents during this time.
Incorporation and Certificate Issuance (1-2 days) :After completing the review process and ensuring all requirements are met, the offshore company is officially incorporated, and the registration certificate is issued. This step typically takes 1 to 2 business days.
In total, the entire process of offshore company registration in the UAE can be completed within approximately 2 to 6 weeks, depending on the efficiency of the chosen jurisdiction and the responsiveness of the stakeholders involved.
It is important to note that engaging the services of a professional business advisor such as Oxford Auditing can expedite the registration process by ensuring all documentation is prepared accurately and meeting the jurisdiction's specific requirements for offshore company formation. Additionally, the timeline may be subject to changes in government regulations or processing times, so it's advisable to stay informed and consult with experts familiar with offshore company registration in the UAE.
Yes, existing companies in the UAE can be restructured or transformed into offshore companies under certain circumstances. Offshore company formation in the UAE allows businesses to enjoy various benefits, such as tax advantages, confidentiality, and ease of doing business internationally.
The process of restructuring an existing company into an offshore company involves specific steps and considerations. Here are some key points to consider:
Eligibility: Not all types of companies are eligible for transformation into offshore entities. The eligibility criteria may vary depending on the jurisdiction and free zone chosen for offshore registration.
Legal Requirements: Companies seeking to restructure into offshore entities must adhere to legal requirements and guidelines set by the relevant authorities. These requirements may involve obtaining approval from the current jurisdiction where the company is registered and fulfilling specific conditions for offshore company formation.
Shareholders' Consent: Shareholders of the existing company must approve the decision to restructure into an offshore company. This approval may be obtained through a resolution or meeting, depending on the company's constitutional documents.
Document Amendments: The company's Memorandum and Articles of Association (MOA) may need to be amended to reflect the transformation into an offshore entity. Any changes to the MOA should comply with the regulations of the offshore jurisdiction.
Registration Process: Once all the necessary requirements are met and the documents are in order, the company can initiate the offshore company registration process in the chosen jurisdiction. This process will involve submitting the required documentation and completing the registration formalities.
Time frame and Costs: : The time frame and costs associated with restructuring into an offshore company can vary depending on the complexity of the transformation and the efficiency of the registration process in the selected jurisdiction.
Professional Assistance: Seeking guidance from a professional business advisor or a registered agent with expertise in offshore company formation is highly recommended. They can provide valuable insights, ensure compliance with legal requirements, and expedite the registration process.
It's important to note that transforming an existing company into an offshore entity is a significant decision that requires careful consideration of the implications and benefits. Businesses should thoroughly assess their objectives, consult with experts such as Oxford Auditing, and understand the specific regulations of the chosen offshore jurisdiction before proceeding with the restructuring process.
