UAE OFFSHORE COMPANY FORMATION
Offshore Company Formation in UAE
Offshore company formation in the UAE is based on the concept of the term offshore which refers to a location outside of one’s home country. An Offshore Company is a legal entity that is set up with the intention of operating outside its registered jurisdiction or the location of its ultimate ownership. Companies and individuals (typically those with a high net worth) may move offshore for more favorable conditions, including tax exemption, relaxed regulations, or asset protection. Although offshore institutions can also be used for illicit purposes, they aren’t considered illegal.
Offshore company formation in the UAE – Jurisdictions
The concept of free zone company setup and offshore company formation should not be confused. Free Zone companies in the UAE are used for operating business in the UAE while having a physical presence, while offshore company formation in the UAE provides only office address and registration in the UAE without being entitled to operate business activities directly in the UAE.
In 2003, the Jebel Ali Free Zone Authority was authorized to perform offshore companies in Dubai. Later, in 2007 two other Free Zones in Ras Al Khaimah such as Ras Al Khaimah Free Trade Zone (RAKFTZ) and Ras Al Khaimah Investment Authority (RAKIA) also started offshore company formation. Both of these later on came under Rak International Corporate Centre (RAKICC).
The latest one in the list is Ajman Offshore jurisdiction formed in 2014 which is administered by Ajman Free Zone Authority.
An offshore company can be set up with an individual shareholder or corporate shareholder. Although these companies are registered, they do not have a physical presence in the UAE. Therefore shareholders will not be able to obtain a resident visa. They can hold bank accounts, including multi-currency, to carry out their routine local and international transactions. The company formation can be done only through registered agents who will provide the registered office address. Offshore companies are also allowed to hold real estate properties approved by the relevant free zone authority in the permitted jurisdictions. Details of the shareholders will not available in the public record. This makes offshore company formations ideal for foreign investors who wish to retain anonymity of their business dealings within the UAE and beyond.
An offshore companies in UAE is not issued with a business license, but only a certificate of incorporation. This means the offshore company cannot conduct any commercial activity with persons within the United Arab Emirates. It can only undertake international business transactions and deals.
Procedures for Offshore Company Formation in the UAE
1. Select a company name:
Offshore company set up in Dubai required selecting a name for your which should be initially verified with the registrar. The name of the company shall end with Limited (Ltd.) Or Incorporated (Inc.).
2. Fill the application form:
The application form should be filled out and submitted with the relevant documents which generally include the following:
- Identity proof of the shareholders and directors.
- Address proof of the shareholders and directors.
- CV of the shareholders and directors.
- Well drafted business plan.
- Photocopies of the shareholders and directors.
These documents will be submitted to the concerned authorities for their review and approvals.
3. Draft MoA and AoA:
Once the approval is obtained for the offshore company registration, the Memorandum of Association and Articles of Association needs to be drafted in English language. Once these are also approved by the authority, the company can be officially started.
4. Open an offshore bank account:
The final step is to open an offshore bank account for carrying out the regular business transactions.
General Documents List for Dubai Offshore Company Formation:
For Individual Shareholder :
- Attested passport copy of the owner/shareholder.
- Residential proof.
- Original bank reference document.
- Details of the owner/shareholder/UBOs.
- Preferred name of the company to be formed.
- Suggested name and activities of the newly formed offshore company.
- The hierarchy of beneficiaries.
- CV of the shareholders.
For Corporate Shareholders:
- Attested copy of trade license or incorporation certificate copy.
- Board resolution.
- Memorandum of Association.
- Incumbency certificate of the parent company mentioning the name of shareholders/directors, and duly attested.
- Passport copies of the shareholders, directors and secretaries of the proposed offshore company.
- Parent company’s certificate of good standing –Attested.
- Hierarchy of beneficiaries.
Benefits of Offshore Company Setup
- The flexibility with regards the residential status of the directors and shareholders. Even non-residents can become the shareholder/director.
- No Minimum share capital requirement.
- Lower levels of monitoring with regards books of accounts and accounts filing & auditing.
- Lower cost of incorporation & registration.
- 100% foreign ownership.
- No requirement of physical office in UAE.
- Allows 100% repatriation of profits.
- Not regulated by the state laws.
Working with a registered agent and company formation specialist
When it comes to company formation in Dubai including UAE offshore company formation, it is always a better idea to work with a professional agent such as Elevate Business Solutions who can take you through the whole process hassle free with their expert team. Along with handling your company formation application, we can also assist you with opening a corporate bank account advising the most appropriate financial institution. Going an extra mile for our clients is our habit so that our clients can have the peace of mind to focus on their business.