For many investors, establishing an offshore company in the UAE offers unparalleled flexibility and strategic benefits. Let’s take a deeper look into what makes offshore companies such a sought-after option.
An offshore company in the UAE is a dynamic legal entity that seamlessly integrates into various business structures, providing a range of advantages, such as significant tax savings and enhanced confidentiality.
An offshore company is incorporated for the express purpose of conducting business outside its formation jurisdiction. Unlike traditional companies, offshore entities often do not require physical office space and can engage in various business activities within the country of formation. This makes it an appealing option for both individuals and corporate entities seeking operational ease and tax efficiency. Additionally, the shares of offshore companies are easily transferable, offering greater liquidity and flexibility.
Tax Optimization: Offshore companies are primarily designed to help investors minimize taxes, including capital gains, property sales, and other business-related earnings.
Privacy & Confidentiality: Offshore structures often provide a higher degree of confidentiality, safeguarding investor interests and operations.
Jurisdictional Advantage: The UAE offers three leading jurisdictions for offshore company formation: Ras Al Khaimah (RAK), Jebel Ali Free Zone (JAFZA), and Ajman Offshore. These ‘tax-free’ zones impose no income or corporate tax, and offer 100% foreign ownership, making them highly attractive to global investors.
Double Tax Treaties: The UAE has established double tax agreements with over 40 countries, enhancing the offshore company’s potential to minimize tax liabilities on a global scale.
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UAE offshore companies are well-positioned to conduct international trading, including the import and export of goods, raw materials, and specialized commodities. This flexibility makes it an ideal structure for global businesses seeking to expand their reach and market presence.
Offshore companies provide an excellent vehicle for investment holding, allowing investors to manage and hold shares in other companies, along with tangible and intangible assets such as real estate and intellectual property. This structure provides ease of management and long-term asset growth.
One of the most compelling reasons to establish an offshore company in the UAE is asset protection. Offering complete confidentiality, these companies provide a shield for various asset classes, including real estate, intellectual property, and financial assets, safeguarding them from potential risks.
UAE offshore companies are also equipped to offer a wide range of professional services across multiple industries, including consultancy, legal services, management, and accounting. This makes them an attractive choice for firms offering expert services in both local and international markets.
This structure is similar to FZE but allows for two to five shareholders. Like FZE, it is also governed by the rules of the specific Free Zone.
The first step is choosing a unique name for your offshore company. This name must be verified by the registrar to ensure its availability. It’s important to avoid names related to restricted sectors such as banking, insurance, or trust services.
After confirming the company name, you will need to complete an application form and submit necessary documentation. This includes personal and corporate identification, which may vary depending on whether the company is owned by individuals or entities.
The next crucial step involves drafting the Memorandum of Association (MOA) and Articles of Association (AOA), which must be presented in English. Upon submission, the authorities will review the documents. Once approved, you will be authorized to legally commence operations in the Emirates.
100% Foreign Ownership - Full ownership of your business without the need for a local partner.
Global Market Expansion - Access new international markets and grow your business globally.
Stable Legal System - Operate under a secure and business-friendly legal framework in the UAE.
Adaptable Regulatory Environment - Benefit from flexible regulations tailored to facilitate business operations.
Access to Global Funding - Offshore companies gain enhanced access to international investment opportunities.
Tax Efficiency - Enjoy tax neutrality on international income, potentially exempting personal or corporate income, capital gains, and inheritance taxes, based on jurisdiction.
We offer a full suite of services and support for establishing offshore companies in Dubai and other emirates of the UAE. Our team handles all corporate and legal documentation, business filings, provision of directors, and company secretaries. We work on your behalf to ensure full compliance with all relevant government authorities.
An offshore company is an ideal solution for individuals or enterprises looking to safeguard their assets and financials from international trade and transactions. Offshore structures come with minimal administrative costs, offering a significant advantage for efficient business operations. Additionally, offshore companies provide the flexibility to easily liquidate assets and raise non-repayable funds through simplified share sales.
It’s important to note that a UAE offshore company must conduct all business operations outside of the Emirates. However, you can still open bank accounts, hold intellectual property, and manage real estate within the UAE.
Now that UAE has introduced corporate tax, now here the question is whether UAE offshore company is subjected to corporate tax and obliged to obtain a corporate tax registration number?
As per the Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, it is important to find out what constitutes a taxable person and if an offshore company falls within the definition of a taxable person.
Article 51 states "Any taxable person shall register for corporate tax." And a taxable person is defined as "a person subject to corporate tax," according to the decree.
Article 11 further provides that 'a Taxable Person shall be a Resident Person or a Non-Resident Person'. It further provides that a resident person can be 'a legal person that is incorporated or otherwise established or recognized under the applicable legislation of the state, including a free zone person'.
Article 12 of the Decree states that “A resident person, which is a legal person, is subject to corporate tax on its taxable income derived from the state or outside the state”.
From the above laws, it is concluded that an offshore company, being a juridical person, registered in the UAE will be considered as a Resident Person and subject to UAE corporate tax.
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