One of the reasons why people choose to incorporate companies offshore is to take advantage of lower taxes in that country. This is the reason why destinations like the Cayman Islands and the British Virgin Islands are popular. It is estimated that four out of every ten offshore companies are incorporated in the British Virgin Islands. Mauritius is also emerging as a tax-friendly destination for offshore companies, although it does not have a zero tax structure like the Cayman Islands and the British Virgin Islands.
And this is also part of the problem. Any company incorporated in the Cayman Islands or the British Virgin Islands is now seen as having been established to evade taxes in one’s home country. As a result, there might be people who choose not to do business with a company registered in the Cayman Islands or the British Virgin Islands – nobody wants to receive a tax notice from the taxman in his/her home country or the country of one’s residence.
Since 100% confidentiality is assured in the Cayman Islands and the British Virgin Islands, there have also been reported instances of money laundering. The US State Department has categorized the Cayman Islands as a Country/Jurisdiction of Primary Concern with respect to Money Laundering and Financial Crimes. The British Virgin Islands too shares the same classification.
Both these places are located in the Caribbean, so it is their geographical proximity to the Americas that makes them destinations of money laundering. The money laundered is said to be the proceeds from crime in one’s country and/or narcotics trafficking. There might not be many people who want to take the risk of doing business with a company registered in a jurisdiction where money is laundered. Once again, this is primarily because no one wants to get into trouble with the authorities.
That leaves one with Mauritius as a destination where there is no tax evasion or money laundering. In Mauritius, income generated in the country is taxed at the rate of 10% if it is below MUR 650,000 or at 15% if it is above this threshold. Given that 1 Mauritian Rupee is only USD 0.023 or 1 US Dollar equals approximately 42.65 Mauritian Rupees, it is more likely that you will be taxed at the higher rate. There is not much to be had by way of tax savings if you were to incorporate your offshore company in Mauritius.
So is there a country which does not have a reputation for being a hub of money laundering? A respectable jurisdiction, so to speak? One which is also tax-friendly? The answer is yes.
The United Arab Emirates is a country which has had zero tax on personal income for decades. There are also no short-term or long-term capital gains taxes of any kind. You can repatriate 100% of all your invested capital and profits back to your home country. It has strict anti-money laundering regulations in place.
The United Arab Emirates has a reputation for exceptionally strong law enforcement. It comes first in the entire Middle East-North Africa region, according to the Rule of Law Index formulated by the World Justice Project. Abu Dhabi, the capital of the United Arab Emirates, was named the safest city in the Middle East as per the Safe Cities Index 2021. Dubai and Sharjah, two other key cities in the United Arab Emirates, also find their names in the top ten.
Dubai is a financial powerhouse that is now at par with the likes of Singapore, New York, and London. There are two places where you can set up your offshore company – the Ras Al Khaimah International Corporate Centre and the Jebel Ali Free Zone.
The Ras Al Khaimah International Corporate Centre, while technically not in the emirate of Dubai, is located just an hour by road from Dubai. It offers lower offshore company incorporation costs compared to the Jebel Ali Free Zone. Only the Jebel Ali Free Zone allows one to own assets on the mainland in Dubai. The Jebel Ali Free Zone is located within the emirate of Dubai itself, and just a 30-minute drive from Business Bay, Dubai.
So while there is no best offshore company location for your business, there can indeed be a right-fit according to your needs.
Both places located in the United Arab Emirates offer 100% confidentiality to business owners. You are not required to publish your company’s financial information in or on any publicly-accessible domain or list the names of your directors / shareholders. However, you are required by law to comply with anti-money laundering regulations, which include sharing with the authorities who the Ultimate Beneficial Owner(s) of your company is/are. But not to worry, this information is not made public.
So you have everything you could ask for – a jurisdiction which is a tax haven, offers 100% confidentiality, and does not have a bad reputation for being a hub of money laundering. This is why offshore company setup in Dubai makes a lot of sense, especially if you want to do business with prospective customers and attract investors to your company.
Two-thirds of the world’s destinations can be reached within eight hours or less by air from Dubai. Dubai is in fact, the busiest airport in the world in terms of international passenger traffic, and people from 200 countries around the world call it their home. So you can rest assured that you will be in very good company.
Why Choose A&A Associate For Offshore Company Incorporation in Dubai, UAE?
At A&A Associate LLC, we have years of experience with company formation in Dubai, helping entrepreneurs establish their offshore companies in the United Arab Emirates. We have been of professional assistance to clients from 100 countries and have a 98% client satisfaction rate so far.
We have a dedicated in-house legal team to provide our clients with legal support, so that everything is done the way it should be. This minimizes the chances of getting into any sort of trouble with the authorities in one’s home country or country of residence.
Even after you have established your offshore company in Dubai, we continue to support you by providing you with cost-effective bookkeeping, accounting, and audit solutions. Those who know their way around finance can appreciate that this is a good thing – if your books are always in order, adhering to international financial compliance and reporting standards, so much the better.