- Definition of Offshore Company?
- Why incorporate an Offshore Company and the benefits of utilizing an offshore corporate structure?
- What is the legal and business status of an offshore entity in the UAE?
- What types of activities can be carried out with an offshore company?
- Strategic and Business advantages for incorporating Offshore Company in the UAE!
- What makes the UAE unique and attractive offshore jurisdiction?
- What Offshore Jurisdictions are available in the UAE?
- Working with us
Whether you are an ambitious start-up, an individual entrepreneur investing in an existing business, or a foreign corporation establishing a formal presence in the UAE, clear and skilled advice will ensure that you are making the right business decision to reduce your risk and increase your chances of achieving a successful, well-managed business.
Drawing on our expertise of over two decades, our corporate team has gained comprehensive knowledge and developed the business acumen skills you need to guide you through selecting the most suitable legal form to set up your venture, whether as a mainland, free zone, offshore, or freelance.
We advise on the full spectrum of the UAE companies’ law and can efficiently contribute to the achievement of our clients’ goals and objectives and help them navigate the legal complexity and market challenges to successfully executing their business strategy.
Business Setup
Initial Business Setup Advisory
Setting up your new business in the UAE would require careful consideration of certain factors and conditions, such as the nature of business activities, the selection of the right business structure/legal form and the most suitable incorporation jurisdiction (Mainland, Free Zone, Offshore), the accounting and booking keeping requirements, the labour and immigration laws, bank account opening and TAX & VAT.
Company Formation
Mainland Limited Liability Company
One of the most used mainland setups in Dubai is the Limited Liability Company (LLC) which can be licensed to carry on diverse trading, commercial and industrial activities. With latest amendments in the UAE Commercial Companies Law, LLCs may also be incorporated to conduct some professional activities.
Depending on the nature of the business activities to be carried on, the LLC may be 100% foreign owned. An LLC must have a registered office space to operate and managed by a General Manager who will become a UAE resident. There is no minimum capital requirement. However, some business activities would require a higher capital.
Mainland companies are governed by the Regulatory Authority in Dubai – Department of Economic Development (DED) and governed by the UAE Commercial Companies Law No. 32 of 2021, as amended.
NOTE: Is it recommended to have the law as HL
FREE ZONE COMPANY
With over 40 free zones across UAE offering company formation solutions, it becomes challenging to select in which free zone to set up your business.
Dubai offers more than 30 free zone and has some of the renowned free zones in the world. Dubai free zones offer world-class business amenities, flexible set ups options (flexi-desk and flexi-office).
While maintaining complete privacy with limited reporting requirements, foreign investors can own 100% of the share capital and are allowed to repatriate 100% the company’s profits. Investors can set up two types of free zone companies, a Free Zone Establishment (FZE) for one shareholder or a Free Zone Company (FZCO) for more than one shareholder. A Branch or Representative office of a foreign company may also be registered in a selected free zone.
OFFSHORE COMPANY
An Offshore Company is mostly used as a Holding Company. It can also be used for international trading, contracting, consulting services, and asset/intellectual property protection.
It’s 100% tax free and you will also be able to keep 100% of the returns. There is no audit requirement, Names of shareholders and directors are not available on public record, however, annual legal compliance requirements must be fulfilled.
Offshore company may not carry on business in the UAE, and also it doesn’t offer residence visa in the UAE
Definition of Offshore Company?
Why incorporate an Offshore Company and the benefits of utilizing an offshore corporate structure?
- Providing a gateway for international market expansion;
- Access to a stable and business-friendly legal system;
- Access to a more flexible regulatory regime;
- Offering tax neutrality on international earnings in respect of (depending on jurisdiction) personal or company income, capital gains and inheritance taxes;
- Offering better access to global funding;
- Providing a vehicle to separate or protect assets, such as Intellectual Property, from operating entities.
What is the legal and business status of an offshore entity in the UAE?
An offshore company based in the UAE operates under distinct regulations that set it apart from other types of companies operating in the country. A key distinction is that an offshore company is prohibited from engaging in any business activities within the UAE. This includes restrictions on importing and exporting goods into the local market, as well as renting or leasing physical premises. As the company is limited in conducting business in the UAE offshore companies cannot grant residential status / visas for their stakeholders or employees.
Offshore companies are specifically designed to support international business activities, ensure asset protection, offering distinct advantages such as enhanced privacy, tax optimization, and flexible corporate structuring hence they are a special purpose vehicle catering to specific international business needs while adhering to the regulatory framework established for their offshore status.
What types of activities can be carried out with an offshore company?
Offshore companies are SPV authorized to conduct a wide range of transactional activities, provided that these activities occur outside the registered jurisdiction.
These companies have the freedom to engage in:
- in buying and selling goods and services
- holding physical or digital assets
- managing intellectual property,
- and conducting regular business operations.
This flexibility allows offshore companies to cater to diverse business needs and capitalize on global opportunities beyond the limitations of their registered jurisdiction.
Strategic and Business advantages for incorporating Offshore Company in the UAE!
Business Confidentiality
UAE offshore companies operate with a distinct level of confidentiality as they are not subject to public information disclosure.
With respect to maintaining accurate and updated Ultimate Beneficial Owner (UBO) register with the Federal Authorities there was a major amendment in 2020. The UAE Government passed a Cabinet Resolution No. 58 of 2020, which came into effect on August 28, 2020. This legislation was introduced to enhance transparency, combat money laundering, and align the UAE’s regulatory framework with international standards.
The resolution aims to ensure compliance with international initiatives such as the Financial Action Task Force (FATF) recommendations and the UAE’s commitment to combating money laundering and terrorist financing. It emphasizes the importance of identifying the individuals who ultimately own or control the offshore companies, thereby promoting transparency and preventing the misuse of corporate structures for illicit purposes.
Tax Advantages
Offshore companies in the UAE enjoy a favorable tax regime that offers significant advantages for minimizing tax obligations.
One of the key benefits is the exemption from income tax, which allows offshore companies to retain their earnings and allocate resources more efficiently.
Offshore companies in the UAE are exempt from customs duties, value-added tax (VAT), capital gains tax, and withholding tax. This tax exemption framework provides a competitive edge for businesses operating through offshore structures.
Furthermore, the UAE has established an extensive network of double taxation treaties with over 100 countries – double taxation treaty network. These treaties ensure that businesses are protected from paying tax on their UAE-sourced income in their country of origin, further enhancing the appeal of the UAE as a tax-efficient jurisdiction for offshore operations. The combination of tax exemptions and double taxation treaties positions the UAE as an attractive destination for businesses seeking to optimize their tax liabilities and maximize financial efficiency.
Asset Protection
Offshore companies in the UAE enjoy the privilege of holding a diverse range of assets, including Real Estate, IP, Securities, and shares in local UAE companies.
One significant advantage of offshore company ownership in the UAE is the confidentiality it provides, safeguarding the company’s assets from creditors and other third parties. Additionally, provisions such as lawsuit protection ensure that the company’s assets and other possessions remain shielded in the event of a legal judgment against the company. These protective measures contribute to the overall asset protection and security afforded to offshore companies operating in the UAE, offering peace of mind and a favorable environment for conducting business activities.
Simple and straightforward incorporation process
The incorporation process for establishing an offshore company in the UAE is highly streamlined and straightforward. Unlike other jurisdictions, it does not necessitate securing a physical office space, neither does it stipulate a mandatory minimum share capital requirement. These features significantly reduce the regulatory burden typically associated with the formation of a corporate entity.
The fundamental requirements for the structure of the company are also minimal, necessitating just a single director and shareholder to set up an offshore company. This blend of adaptability, speed, and limited regulatory controls designates the UAE as a prime locale for potential offshore business incorporations.
The complete incorporation process is UAE offshore company is very simple to set up. There is no requirement for physical office space, no minimum share capital requirement and very few other regulatory obligations. The setup can be done in as little as 7 working days and the company needs only have one director and one shareholder.
International Market Expansion
Using a UAE offshore company is a great cost-effective way to expand a business, encourage partnerships and bilateral investments globally and within the GCC market.
What makes the UAE unique and attractive offshore jurisdiction?
- strategic location in the Middle East, acting as a gateway between East and West. This location facilitates trade and investment flows and provides access to a diverse range of markets.
- UAE offers political stability and Government support.
- Robust legal framework, and a well-established regulatory system, which enhances investor confidence and protects the interests of businesses.
In recent years UAE has been introducing amendments of the legislation to enhance transparency, combat money laundering, and align the UAE’s regulatory framework with international standards to ensure compliance with international regulatory bodies and initiatives, such as the Financial Action Task Force (FATF) in combating money laundering and terrorist financing. - boasts strong economy, driven by a favorable business environment, tax incentives, and supportive government policies.
- well-developed infrastructure, including state-of-the-art communication networks, world-class transportation facilities, and modern business centers. These factors contribute to the ease of doing business and make the UAE an attractive destination for companies seeking a regional or global presence.
- several offshore company formation facilities in Dubai, Abu Dhabi, Ras Al Khaimah, Jebel-Ali Free Zone, Ajman.
What Offshore Jurisdictions are available in the UAE?
-
Jebel Ali Free Zone Authority Offshore (JAFZA Offshore) – Emirate of Dubai
Created in 1985 Jebel Ali Free Zone (Jafza) is the largest free zone in the world. With over 9,500 companies based in Jafza, a well-defined compliance framework has been established to ensure operations within the free zone are in line with local and international laws, regulations, and best practice.
Located within Jebel Ali Free Zone (JAFZA), a major commercial and logistic free zone hub in Dubai, JAFZA Offshore is the Authority responsible for incorporating Offshore Companies since 2003 and governed by Jafza Offshore Companies Regulation 2018 allowing for investors to setup their 100% foreign owned offshore holding companies. 2) The Jurisdiction was the first in the UAE to allow real estate assets in Dubai to be owned by the offshore entity.
This structure is cost-effective, tax-efficient and provides access to the global market with little administrative work required. - Ajman Offshore – Emirate of Ajman
Established in 1988, the Ajman Free Zone (AFZ) has been a catalyst for profound industrial advancements in Ajman. It has successfully drawn a substantial number of businesses, leveraging the enticing investment privileges offered, thereby reinforcing the sectors of trade, industry, and finance in the UAE.
Distinctive from Jafza in its offerings and benefits, the Ajman Offshore jurisdiction, set up in 2014, swiftly carved a niche for itself as an alluring offshore jurisdiction. It is well-regarded for its broad spectrum of cost-effective corporate services, and sets it apart, making it an ideal choice for entrepreneurs and small to medium-sized enterprises. - Ras Al Khaimah International Corporate Centre (RAK ICC)
In September 2006, the Ras al Khaimah government launched the International Company structure, also known as the RAK Offshore Company regulated under the Ras Al Khaimah Free Trade Zone Authority International Companies Regulations 2006.
Formed after a consolidation between two competing registrars, RAK ICC is one of UAE’s best offerings for an offshore company jurisdiction.
RAK ICC incorporated entities enjoy:
- Lowest costs for UAE-based offshore companies
- Remote incorporation procedures
- Wide variety of available business activities per ISIC standards
- Ability to own freehold real estate properties in Dubai and other emirates
- A proactive registrar attuned to global regulatory environment changes
- Streamlined approach to company incorporation and renewal procedures
- Availability of non-traditional offshore company solutions such as Trusts Foundations, Segregated Portfolio Company, Premium Product
Working with us
At our law firm, we understand that setting up an offshore company in the UAE is a remarkably straightforward and efficient process compared to other jurisdictions.
Our team is adept at guiding our clients to select the most suitable offshore jurisdiction taking into consideration a blend of business-related, financial, and entrepreneurial variables.
With our dynamic approach, swift service, and profound comprehension of the UAE’s regulatory framework, we stand as your foremost ally for facilitating offshore business incorporations in the UAE.
Branch of Foreign Company
A branch of a foreign company is registered in the UAE as a supplement of the foreign company (often called ‘Parent Company’ or ‘Mother Company’) located abroad. A branch will carry the same name and conduct the same business activity of the foreign company. A branch can be registered either in mainland or in a Free Zone.
We can advise as to the legal/financial Pros and Cons of a branch registration for your company’s expansion in the UAE.
Representative Office
A Rep Office of a foreign company is registered in the UAE merely to market and promote the foreign company’s products and services. A Rep Office is not allowed to trade in the UAE. However, it offers a residence visa to its employees.
Civil Partnership for Professional Activity
A Civil Partnership is formed between two or more partners to carry on professional or service-related activities. The partners in a civil partnership do not enjoy liability. They are jointly liable for any losses or debts which may arise out of the Civil Partnership Company.
A Civil Partnership Agreement must be entered into by the partner and signed before the Notary Public in Dubai. The Civil Partnership is governed by the UAE Civil Transactions Law No. 5 of 1985, as amended.
Sole Proprietorship
A Sole Proprietorship is established in the UAE by a single individual with a trade/professional license issued in his/her name. Sole Proprietorship’s owner is responsible for all financial liabilities of the company.
Freelance
A freelance license is a work permit that enable individuals to be self-employed without being tied to one company for a long term.
Dubai provides individuals with various opportunities to venture off in their own business journey and succeed as a freelancer.
Freelance permits in Dubai are usually issued for specific industries including Media, Education, and IT Services. Besides the residence visa that freelance license offers, a freelancer can open his/her own bank account in the UAE.
Ready Made-Shelf Company
The sale and purchase of VINTAGE shelf companies – Offshore and Free Zone
Vintage shelf companies can be highly attractive to certain entrepreneurs or businesses due to several reasons.
- Established Reputation: Vintage shelf companies often carry a sense of credibility and trustworthiness. Having a company with a long-standing history can help establish a positive reputation in the eyes of clients, partners, and financial institutions.
- Instant Market Presence: By acquiring a shelf company, you can bypass the initial setup phase and immediately enter the market. This can save valuable time and resources that would otherwise be required to establish a new business entity from scratch.
- Access to Contracts and Opportunities: A shelf company with a trading history may have existing contracts, relationships, or business opportunities that can be leveraged. This can provide a head start in securing partnerships, clients, or lucrative projects.
- Enhanced Financing Options: Lenders and financial institutions may be more willing to extend credit or provide funding to a vintage shelf company that has demonstrated stability and financial history. This can offer advantageous borrowing terms and greater access to capital.
- Branding and Marketing Benefits: A shelf company with a history can benefit from the brand recognition it has built over time. This can be particularly appealing in industries where reputation and brand equity play a crucial role.
- Legal and Compliance Advantages: While some jurisdictions may offer specific legal and tax benefits to companies with a longer history the focus is mostly on the compliance processes, which offer easier access through an aged entity with compliance records in hand.
- Establishing a branch of a foreign company: Normally, in order to establish a branch of a foreign company, local authorities require 2 years of financial audits which can certainly be accomplished by a shelf company of more than 2 years old.
It’s important to note that the attractiveness and advantages of obtaining a vintage shelf company can vary depending on specific business circumstances like industry, and market conditions. Therefore, it is advisable to thoroughly evaluate the company’s history, financial records, legal compliance, and any potential liabilities before making a purchase.
The transfer process shall include a share sale purchase agreement between the seller and the buyer, in which the seller confirms that all liabilities of the company, prior to its acquisition, would remain the responsibility of the seller.
This provides additional reassurance and clarity to the buyer, ensuring that they can proceed with their business endeavors without shouldering any pre-existing financial burdens.
Buying or selling an ACTIVE business
- If currently you are not our client, however you wish to sell your active business to either a pre-defined individual or company, we can offer full legal support.
- If you are our client and wish to sell your entity, we can assist marketing it to the right buyer profile
What We Do For You
Apart from sourcing the actual shelf company for our clients, we can provide the following services to ensure that the entire purchase and transfer process runs smoothly:
- Legal transfer requirements as per the incorporating jurisdiction – the transfer of ownership and name/address changes
- Assist with local bank account set up
- One time or on-going legal support for matters related to partnership and restructuring, franchising agreements, shareholder agreements / resolutions, dispute resolutions, M&A
- Virtual or serviced office rentals – in the case of a Free Zone entity
- Assisting with mandatory compliance fillings and submissions
- Connecting the client to a accountancy professional company to provide accounting services after the acquisition of the entity
Do You Have a Shelf Company You Wish To Sell?
If you have a an offshore or a Free Zone Company and you wish to sell the entity, please contact us!
Do wish to buy a Shelf Company?
Please use the form to list your requirements so that we are able to locate the most suitable shelf company. Alternatively call us on the company contact number.
Nominee Services
Nominee Director
A nominee director is a person who agrees to become an officer of a company even though they will have no involvement in the actual operation of the company.
It is a legal requirement for a UAE Free Zone or an Offshore Company to have at least one director. Corporate directors are allowed; however, one individual is essential to be appointed as director on the company’s records.
We do provide nominee director services for UAE Free Zone and Offshore companies incorporated in Dubai, UAE.
Nominee General Manager
A nominee director is simply a resident of the UAE who will be appointed as the nominee manager on the license of the company. A nominee manager may be involved in the actual operation of the company as agreed with the shareholders.
We do provide nominee manager services for UAE Free Zone companies incorporated in Dubai, UAE.
Bank Account Assistance (Corporate/Personal)
One of the main reasons you have incorporated a company in the UAE is to have a bank account so you can operate your business in the UAE.
We assist with the bank account opening formalities in the UAE to including introducing you to your banking relationships, submitting the documents which identify the ownership of the company and the identity of the shareholders, assisting in filling in the required KYC forms, and providing guidance and oversight of the account opening process.
We assist in both corporate and personal accounts.
Economic Substance Regulations (ESR)
As part of the UAE’s commitment as a member of the OECD Inclusive Framework, and in response to an assessment of the UAE’s tax framework by the European Union Code of Conduct Group on Business Taxation, the UAE issued:
- Economic Substance Regulations (Cabinet of Ministers Resolution No. 31 of 2019), (the “Regulations”) on 30 April 2019.
- Guidance on the application of the Regulations was issued on 11 September 2019 (Ministerial Decision No. 215 of 2019),
- and Cabinet Decision No. 58/2019 on the Determination of Regulatory Competencies lists the Regulatory Authorities tasked with the administration and enforcement of the Regulations.
- Amendments to the Regulations were made by Cabinet of Ministers Resolution No. (57) of 2020 on 10 August 2020, and updated Guidance was issued on 19 August 2020 (Ministerial Decision No. (100) of 2020.
The Regulations require UAE onshore and free zone companies and certain other business forms that carry out any of the defined “Relevant Activities” to maintain and demonstrate an adequate “economic presence” in the UAE relative to the activities they undertake (“Economic Substance Test”).
Companies based in the UAE need to assess if their business activities fall within the Relevant Activities defined in the ESR. In the affirmative, they are required to submit an ESR Notification by 30 June of each calendar year. Depending on their business activities, they would need to file an ESR Report with the UAE Ministry of Finance (MoF) by the end of their financial year, or by 31 December the calendar year.
Which UAE businesses are required to submit an Economic Substance Report?
During a Reportable Period, businesses that are not Exempted Licensees and who generate Relevant Income from any of the following Relevant Activities must file an Economic Substance Report:
- Banking Business
- Insurance Business
- Investment Fund Management Business
- Lease-Finance Business
- Headquartered Business
- Shipping Business
- Holding Company Business
- Intellectual Property Business
- Distribution and Service Centre Business
Corporate Compliance and Governance
Ultimate Beneficial Owner Regulations (UBO Regulations)
The Ultimate Beneficial Owner Regulations (the “UBO Regulations”) issued by UAE Cabinet Resolution No. (58) of 2020 are aiming to regulate Beneficial Owner Procedures.
All companies licensed and registered in the UAE – except those that are wholly owned by a local or federal government body, or those set up in the DIFC or ADGM financial free zones – are required to maintain registers with updated information and adequate records of its ultimate beneficial owners (UBOs), beneficial owners (BO’s), shareholders, and nominee directors.
Companies Registrars must maintain, at all times, updated UBO Register to include the following information for each UBO:
- Full name, nationality, and date and place of birth.
- Place of residence or notice address.
- Valid Passport or identification number, country, and date of issue and expiry.
- The basis on which the natural person is identified as a beneficiary.
- The date on which the person became a UBO, and if applicable, the date on which they ceased to be one.
The BO Register – identifying shareholders, partners, directors/nominee directors to be maintained by Registrars must include the following information for each partner or shareholder:
- The number and class of shares/equity held, and the voting rights attached.
- The date on which the shareholder/partner acquired the shares/equity.
- For shareholders/partners that are natural persons, the same information is required as for UBOs.
For shareholders/partners that are legal entities:
- Name, legal form, and memorandum/articles association.
- Address of main office or headquarters, and if the legal entity is foreign, the name and address of its legal representative in the UAE must be included.
- Names of the persons holding senior management positions (including their passport or identification number, country of issue, date of issue, expiry date).
Who is an Ultimate Beneficial Owner?
A UBO is a natural person that directly hold or control at least 25% of a company’s shares or has voting rights over a certain percentage of that company. Or indirectly via the control of another company, entity or structure that controls or has influence over that company’s business, and its strategic plans, decisions, transactions, and financials.
Ultimate Beneficial Owner Vs Beneficial Owner
Legally, an ownership can be classified into two; 1. Legal and 2. Beneficial ownership. A legal owner is a person who holds the legal title under their name. Alternatively, a beneficial owner is the person who enjoys the benefits of ownership even though the title is in another name.
In other words, a registered shareholder (person or company) is deemed as the legal owner of the shares registered under his/its name, but he/it may be holding such shares for the interest and benefit of a beneficial owner pursuant to a trust or nominee arrangement.
There can be multiple beneficial owners in one company, but the Ultimate Beneficial Owner (UBO) is often the natural person who ultimately owns and controls a company, hence, benefits the most from all beneficial owners, however, this person does not have to be known directly as the owner.
Business Support
- Attestation and Legalization of documents
- Residence Visa
- Golden Visa
- Spouses/Children Visa
- PRO Services
- Company Secretarial Services
- Power of Attorney Drafting
Legal Advice
- Business Structuring & Bankruptcy
- Shareholders/Agreement
- Shareholders/Board Meetings Resolutions
- Partnership Agreements
- Share Sale & Purchase Agreements
- Share Transfer in the Event of Death
- Bankruptcy Procedures
- Merger & Acquisition
- HR Department’s Manual/Training
- Corporate Compliance
Day-To-Day General Corporate Advice/Support
We also provide general corporate advice and consulting services on issues that affect our client’s day-to-day operations, including advising directors and senior executives on complex management and employment matters, ensuring corporate compliance with rules and regulations, drafting and vetting on wide range of corporate and commercial contracts, conducting due diligence on target companies, and assisting with local authorities’ requirements.
Our services can be offered either remotely or physically on a part time basis in your company’s office.
If you would like to discuss business setup options, feel free to email us and arrange for an appointment.
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