The purpose of this guide is to provide an overview for foreign investors considering doing business in the United Arab Emirates (U.A.E).
Offshore entities are a common type of company in the UAE because of the many attractive benefits they offer investors:
Key benefits include:
- 100% foreign ownership of the enterprise
- 100% import and export tax exemptions
- 100% repatriation of capital and profits
- No corporate taxes
- No personal income taxes
- Not on the OECD “blacklist” of tax havens
- Availability to benefit under UAE Double Taxation Treaties
- Can hold an account in a bank within and/or outside the UAE for conducting routine operational transactions
An offshore company cannot trade within the U.A.E but must conduct its business outside the jurisdiction but there are no restrictions on activities. Only licensed agents can form and administer the company locally with the authorities.
The most common offshore companies are formed within:
- Jebel Ali Free Zone Authority (JAFZA)*
- Ajman Free Zone (AFZ)
- Ras Al Khaimah International Corporate Centre (RAKICC) (formerly trading as RAKIA and RAK FTZ)
*JAFZA must be specifically used in situations where a local property with Dubai will be held by the company.
There are also restrictions depending on the exact location of the property.
Some of the requirements regarding the company set up are:
Shareholder
A minimum of one shareholder is require and no limitation on the maximum. Corporate shareholders are permitted.
Share capital
There is no minimum capital amount required. Shares Certificates must be issued within two months from the date of payment of capital. Classes of shares are permitted but bearer shares are not allowed. Shares may be issued fully, partly or nil paid. Currency issued can be either USD or AED.
Directors
A minimum of one director is required and corporate directors are permitted. Directors are detailed within the Memorandum and Articles of Association but are not available on a public registry for general inspection. The shareholder may be the director.
Secretary
Every company must have a secretary, as appointed by the shareholders. This may be the same person as director and or shareholder. Corporate secretaries are permitted.
Accounts
These are not required to be filed with the Authority. The company is required to keep accounting records as directors deem necessary to reflect the financial position of the company.
Formation time
From receipt of all KYC and submission company is formed within 2-3 days.
Dissolutions
A company may be dissolved/deregistered prior to the renewal date. The shareholders pass a resolution requesting the dissolution. Some offshore zones such as Ajman, require an auditor’s report confirming company has no assets or liabilities.
Redomiciliation
A company incorporated under the laws of a foreign jurisdiction may transfer their domicile to foreign territories that permit such procedures.
Residency / Employee visas
This is not possible with an offshore company.
Taxation
There are no U.A.E corporate taxes applicable, but an offshore company cannot benefit from any of the international Double Tax Treaties (DTT) which the U.A.E has signed because the company is not deemed U.A.E tax domiciled.
Banking
Opening process is generally between 7-10 working days. There is a large variety of local banks available. Banks do like to have met the shareholder of company in person if they will signed and managing the account. Account can be opened upon formation of company and can have all major currencies.
If you have any further questions regarding this type of company, please contact our office
This insight document has been prepared as a general guide. Whilst every care has been taken in its preparation, Animo cannot accept any responsibility for any person relying on this publication. Professional advice should be taken before undertaking transactions and Animo will be pleased to provide such advice where appropriate.
ANIMO CONSULTANTS FZE:
ANIMO CONSULTANTS FZE
Westburry Tower 1, Office 307
Business Bay
Dubai
United Arab Emirates
About Gary
Gary has worked at Animo Associates for seven years and is currently the Managing Director of the company’s Dubai office.
After leaving school Gary gained an AAT Diploma in Accounting and a CIT in Cambridge Information Technology and has since worked his way up in the business sector, where he has been for 16 years.
Gary has previously worked for one of the world’s largest advertising agencies, managing multi million pound accounts and budgets and joined Animo Associates in 2009.
Since then Gary has seen the development and growth of the business which he has found very rewarding. Gary is a member of the Association of Accounting Technicians, achieving full membership status in 2016.
