According to the latest research, economic growth in the UAE is expected to jump from 1.4% in 2021 to 4.3% in 2022 and to 5.2% in 2023. For 2022 and 2023, real GDP growth in the United Arab Emirates is expected to pick up speed, fueled by rising domestic credit, a current account surplus, and expansion in non-oil sectors. In recent years, the United Arab Emirates has emerged as a new haven for investors. The current economic climate in the United Arab Emirates is ideal if you are trying to expand your business there. The country’s economy is beginning to recover from the impact of the epidemic. Businesses from around the world are becoming increasingly interested in establishing a regional presence in UAE, even if it means operating remotely from their home country, as a result of economic changes implemented by forward-looking governments.
Setting up a business is everyone’s dream. If you are an entrepreneur, investor, or firm wishing to join the United Arab Emirates (UAE), create a presence there, or grow your business there, you will require company formation consultants in the UAE, and A&A Associate is the company that can provide you with the very best services. Read along to find out 5 things to know before starting an offshore company in the UAE.
What is an Offshore UAE company?
Before we learn more about the insights of forming an offshore company, let us understand what exactly is an offshore company.
An offshore company, also known as a ‘paper company’ is a corporate organization that is completely foreign-owned and established outside its registered jurisdiction. The main reason for UAE becoming a prime attraction for offshore investments is the relaxed tax regulations levied on businesses. In Dubai, a single shareholder can possess both an offshore business and several other companies.
An offshore company makes it easy to set up a virtual office in Dubai, making it a great option for businesses looking to expand internationally. Offshore Companies are allowed to transact in multi-currency accounts in the UAE and perform international business. However, businesses cannot be conducted with residents in the UAE or possess any physical premises anywhere in the UAE.
What to know about Offshore company formation in the UAE? Call us now.
UAE Offshore Company Startup: 5 Things to Know
UAE Firms Adhere to the KYC Procedure
To strengthen the efficacy of behaviour, each operational jurisdiction must adhere to specific protocols. Mainland zone or Free Zone zones have various rules and governing organizations that hold investors accountable if they violate the rules. However, offshore businesses carefully adhere to the Know Your Customer (KYC) protocol. KYC often requires evidence of address, biodata, a copy of the investor’s passport, and a bank reference letter. These documents aid the organization in combating identity theft, money laundering, unethical behaviour, and financial crime.
Certificate of Incorporation
A business license is one of the essential requirements for launching a business in the UAE. The sort of license to register for your business will be determined exclusively by the nature and type of your business. Consequently, a license will allow you to become a fully registered investor in the UAE.
In contrast, an offshore company’s licensing requirements are distinct. You will only receive a certificate of incorporation for Offshore company formation in the UAE. This indicates that offshore companies do not give a license, particularly for new businesses. It is vital to remember this before establishing an offshore business in the UAE.
Only Three Jurisdictions Available for the Offshore Company
Due to the fact that these enterprises operate outside of their home country, three distinct governments are responsible for monitoring, managing, and regulating all aspects of their operations. These jurisdictions include Jebel Ali Free Zone Authority Offshore (JAFZA Offshore), Ajman, and Ras Al Khaleej International Corporate Centre (RAK ICC). RAC ICC is also known as Ras Al Khaleej International Corporate Centre. Therefore, you can choose the type of jurisdiction that is most suitable for your firm.
A Favourable Business Atmosphere
The thriving and proactive business climate given to investors is one of the aspects that may entice you to establish an offshore corporation. Therefore, by establishing an offshore business in Dubai, you would effectively avoid paying any taxes in the country. like income, sales, business, inheritance, and personal taxes. Investing in an offshore corporation created in the UAE will be of great assistance to you.
No Importation of Goods
Starting an offshore business in Dubai is one of the most advantageous possibilities you might have encountered. However, there is no possibility of importing items into the UAE market once you have engaged in this type of business setup. If your business entails the importation of goods to the UAE, it is, therefore, prudent to learn everything there is to know about offshore corporations. Similarly, these businesses cannot lease commercial properties or offices in the UAE or obtain work visas for their employees.
Numerous offshore companies are being formed every day in UAE. Call us now to start yours today!
Benefits of Establishing an Offshore Company in Dubai
Numerous Tax Benefits
In Dubai, an offshore company is fully tax-free, and you can retain all of your money. There is an increase in economic activity as a result of these tax benefits. Offshore companies doing business in the region will benefit from this. As a bonus, you can avoid the “double tax” practice. It is possible to do international business from the United Arab Emirates without having to pay the same tax twice.
The United Arab Emirates signed 137 double taxation agreements (DTAs) with the majority of its trading partners in order to advance its development goals. As a result, offshore corporations operating in the United Arab Emirates will save a significant amount of money.
Strong legal framework, and bank accounts that accept multiple currencies
Bankruptcy is possible in court situations. Fortunately, if the worst happens, you will be safeguarded by establishing an offshore UAE corporation in the first place. It is unlikely that any of your personal or other assets will be taken. To facilitate international business transactions, offshore corporations can open multi-currency bank accounts that provide money security. Opening a bank account is also relatively easy with your physical presence required only for the day of opening the same. After that, every transaction can be completed online.
100% of the ownership is held by foreigners
In addition, international entrepreneurs in the United Arab Emirates are allowed to retain full ownership or 100% ownership of their businesses. Transparency in financial transactions and complete profit repatriation is an added bonus.
If you are looking for a level of privacy, an offshore company in the United Arab Emirates makes sense. Directors’ and shareholders’ identities remain closely guarded secrets. It is necessary to notify the Company Registry of any such occurrences.
Money Safety is guaranteed with low operational cost
The UAE offers asset protection services. For reporting purposes, there are fewer regulations, so you will not need to rent office space or hire employees. In some instances, it is possible to save a lot of money by working from a virtual office.
To learn more about setting up an offshore company in the United Arab Emirates, please call A&A Associate right now.
The Three Jurisdictional Options For Offshore UAE
Dubai's Jebel Ali Free Trade Zone Authority (JAFZA Offshore)
An existing free zone, the Ajman Free Zone, serves as the base for Ajman Offshore in the same way that JAFZA serves as the base for Offshore in Dubai. Ajman Offshore’s costs for setting up an offshore company are lower than those of a JAFZA Offshore company, and its short incorporation turnaround time is also desirable to prospective clients.
Ras Al Khaimah International Corporate Center (RAK ICC)
- Lower organizational costs for enterprises based in the United Arab Emirates
- Procedures for remote incorporation
- A wide range of ISIC-recognized business activities
- Ownership of freehold property in Dubai and other emirates are possible
- The proactive registrar who is aware of regulatory developments around the world
- Regulatory and compliance burdens that are not excessive
- Simplified procedures for company formation and renewal
- Trusts, foundations, segregated portfolio companies, and other non-traditional offshore company alternatives are all readily available