Offshore Company Formation in Dubai
Setting up an offshore company in Dubai offers tax benefits, confidentiality, and flexibility. This guide covers key advantages, setup steps, and legal considerations.
What you need to know
What is an Offshore Company in Dubai?
An offshore company in Dubai is a legal entity registered in an offshore jurisdiction within the United Arab Emirates (UAE), such as the Jebel Ali Free Zone (JAFZA) or the Ras Al Khaimah International Corporate Centre (RAK ICC)
These companies are designed to conduct business activities outside the UAE and are not permitted to operate directly in the local market. They offer a flexible structure for international trade, asset holding, and tax planning.
Advantages of Setting Up an Offshore Company in Dubai
Tax Exemption
Offshore companies in Dubai benefit from a complete exemption from taxes on profits, dividends, and capital gains.
They are only subject to a fixed annual license fee, with no other tax obligations.
Confidentiality
Shareholder and director registers are not public, ensuring optimal confidentiality of information.
Additionally, the United Arab Emirates is not perceived as a tax haven, which enhances the reputation of offshore companies established in this jurisdiction.
Access to International Markets
Operational Flexibility
Offshore companies can be used for various activities, including international trade, service provision, consulting, asset holding, and the creation of holdings.
They are not subject to strict share capital requirements and can be owned by a single shareholder.
What you need to know
Types of Offshore Companies in Dubai
In Dubai, the two main jurisdictions offering offshore structures are:
- Jebel Ali Free Zone Authority (JAFZA) – Located in Dubai, JAFZA allows the creation of offshore companies with the ability to own real estate in the UAE and establish physical offices if necessary.
- Ras Al Khaimah International Corporate Centre (RAK ICC) – Located in the emirate of Ras Al Khaimah, RAK ICC offers a flexible offshore structure with no minimum capital requirements and a simplified registration process.
The choice between these jurisdictions depends on the company’s specific needs, the nature of its activities, and the desired advantages.
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Steps to Set Up an Offshore Company in Dubai
- Define the Company’s Activity – Clearly identify the activities the offshore company will undertake, ensuring they comply with UAE regulations.
- Select the Appropriate Jurisdiction – Choose between JAFZA and RAK ICC based on the benefits offered and the company’s specific needs.
- Select a Trade Name – Propose a unique company name in compliance with the guidelines of the chosen jurisdiction.
- Prepare the Required Documentation – Provide the necessary documents, including: Passport copies of shareholders and directors. Recent proof of address. Detailed description of planned business activities.
- Draft the Company’s Articles of Association – Prepare the memorandum and articles of association, defining the company’s structure, shareholder roles, and operational rules.
- Submit the Registration Application – File all documents with the relevant authority in the chosen jurisdiction and pay the registration fees.
- Obtain the Certificate of Incorporation – Once the application is approved, receive the certificate confirming the official formation of the offshore company.
- Open a Bank Account – With the certificate of incorporation, proceed with opening a multi-currency bank account in the UAE or in another suitable jurisdiction.
Legal and Tax Considerations
- Accounting Obligations – While offshore companies in Dubai are not required to file annual financial statements, they must maintain accurate financial records of their transactions.
- Operational Restrictions – Offshore companies are not permitted to conduct business within the UAE, except for specific activities such as owning real estate in designated areas.
- International Compliance – It is essential to ensure that the company’s activities comply with international laws, including anti-money laundering and anti-terrorism financing regulations.
- Double Taxation Agreements – The UAE has signed numerous double taxation agreements with various countries, which can provide additional tax planning benefits.
Conclusion
Setting up an offshore company in Dubai offers French entrepreneurs a flexible and tax-efficient structure for conducting international business.
However, it is essential to ensure that planned activities comply with local and international regulations, and to consult experts to guarantee optimal legal compliance.
