Offshore

Offshore

What is an offshore company?

An offshore company is a legal entity incorporated outside the location of its ownership. It is one of the most popular business setup types in the UAE.

Some of the main advantages of setting up an offshore entity is the tax advantages, a hassle-free process of incorporating in the UAE, business and wealth management and the like.

There are three authorities within the UAE where an offshore or international company can be incorporated in. These include: the Ras Al Khaimah International Corporate Centre (RAK ICC), Jebel Ali Free Zone (JAFZA) and Ajman Free Zone.

The name of the offshore company must end with the suffix Limited or Ltd. To denote its legal status as an offshore company. In Dubai, offshore company formation can be formed as a Limited Liability Companies (LLC), limited companies and limited partnerships.

What are the documents required for setting up an offshore company as an individual shareholder?

The main documents required when applying for an offshore company licence as an individual shareholder include:

Passport copy

Proof of residence

Bank reference letter

Business profile

Suggested name and activities of the company

What are the documents required for setting up an offshore company as a corporate applicant?

The main documents required when applying for an offshore company licence as a corporate applicant include:

Certificate of registration of the company (this should be attested by the UAE embassy or Consulate in the home country

Attested certificate of Good Standing of the company

Memorandum and Article of Association of the company

Bank reference letter

Board resolution

What are the benefits of setting up an offshore company in Dubai?

Some of the popular benefits of setting up an offshore company in Dubai include:

100% asset protection and security

100% foreign ownership

Corporate tax benefits

Complete repatriation of profits

No prior capital requirements

No audit requirements during renewals

No public registration of directors and shareholders

What are the company advantages offered by RAK ICC and JAFZA for owning a property in Dubai?

A foreign offshore company owning a company based in the Jebel Ali Free Zone (JAFZA) or in Ras Al Khaimah (RAK) ICC can own real estate in Designated Areas through that entity.

However, there is one condition: if the offshore structure is deemed to be unduly complicated, the Dubai Land Department (DLD) will reserve the right to reject the application. Unduly complication could include any structure that involves more than one foreign corporate entity above the JAFZA entity; it could suggest an intention to obscure beneficial ownership. This, and some other factors, is why the DLD often rejects proposals made by such entities.

What are Designated Areas?

There were a number of areas identified as Designated Areas that allow non-GCC nationals and companies owned by non-GCC nationals to own property in. Although the list of Designated Areas is ever-expanding, it includes:

Palm Jumeirah

Emirates Hills

Dubai Marina

Downtown Dubai

The Old Town

Business Bay

Burj Khalifa

Jumeirah Lakes Towers

Jumeirah Beach Residence

Arabian Ranches

Dubai Investment Park

Dubai Sports City

Jumeirah Islands

Jumeirah Village

Redomiciliation and Migration of companies with RAK ICC

Transfer of domicile/continuation is the process that enables a company or an enterprise to move its domicile from one jurisdiction to another by changing the country of its registration or incorporation while maintaining the same legal identity. Ras Al Khaimah International Corporate Centre (RAK ICC) permits for the redomiciliation and migration of companies into their jurisdiction.

What are the advantages of redomiciliation to RAK ICC?

One of the main advantages of migrating or opting for Transfer of Domicile is the ability to take advantage of a tax-neutral environment and the availability of a network of Double Taxation Agreement.

Some of the major advantages of redomiciliation to RAK ICC include:

Ability to maintain existing legal status

Ability to preserve operational and banking history

Access to Common Law courts

Internationally compliant registry

What are the steps to start an offshore business in Dubai?

Selecting the business activity: Offshore companies are allowed to conduct global trade and offer services for a wide range of business activities ranging from engineering equipment to shipbuilding. However, since offshore companies are outside the scope of UAE’s legal system, carrying out certain business activities within the country are restricted, but they can choose from a range of businesses termed as Relevant Activities. For more information, get in touch with our experts at Ascent Partners.

Choosing the shareholders and company secretary: An offshore company would have to register a minimum of one shareholder and one secretary. It could be an individual or a corporate entity. For more assistance, you can get in touch with our experts.

Capital investment: There is no minimum limit on the capital investment when setting up an offshore business. The total capital investment can be divided into any denomination among the existing shareholders of the company.

Documentation and legal attestation: The documents mentioned above will have to be attested by the UAE embassy in the home country of the company’s formation as well as in the UAE. For additional assistance, you can contact our experts.

Submitting your application form: After the documents have been curated, it can be submitted to the relevant offshore authority. A local offshore agent registered under UAE offshore authorities would be required to complete the company incorporation process; however, in JAFZA, the registration will have to be done in person. After approval of the application form and trade names, you will be able to obtain the incorporation certificate.

Bank account opening: Once the relevant documents have been received, you can proceed with registering for opening a corporate bank account. The account opening would depend upon factors such as business profile, annual turnover, fund flows of the offshore company and the like.

Economic Substance Regulations (ESR): Companies that undertake and earn income from a Relevant Activity would be required to meet an Economic Substance Test and file an Economic Substance Return within 12 months from the end of the applicable financial period.

How can Ascent Partners help?

Ascent Partners provides bespoke business setup services in various jurisdictions including the Mainland, Free Zone and Offshore setups.

From choosing the right business activity to acquiring the relevant business licence for your company, our experts at Ascent Partners work alongside you to strategise and help you startup. We provide you with the freedom to scale your business in Dubai.

Get in touch with us today at ask@ascentpartners.ae or at 04 422 7339 to know more.

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