If your business doesn’t need a local presence, the UAE offshore company may be a better fit. With an offshore entity, you can trade outside the UAE, hold shares in international, local or free zone companies, own property in the UAE, etc. You are also able to engage in international consulting, investments, or hold intellectual property.
Why establish your offshore business in the UAE?
- UAE is not a traditional tax haven. The United Arab Emirates is a ‘real’ country with a ‘real economy’ and today it is one of the fastest growing countries in the world with one of the highest standards of living;
- UAE is not on the OECD ‘blacklist’ of tax havens (nor FATF blacklist);
- UAE is not a member of the EU, and is not subject to regulations.
There are many business activities which are especially suited for a UAE offshore company. These include, but are certainly not limited to:
- General trading
- Consulting and advisory services
- Holding company
- Investments and joint investments company
- Property ownership
- International services
- Professional services
- Shipping and shipping management companies
- Commission agents company—intermediary brokers (IBs)
Offshore and onshore companies have many similarities, but there are a number of important differences you should take into account when considering a move to the UAE. Offshore companies do not require physical offices in the UAE, nor do they allow an opportunity to obtain a UAE residency visa. Directors and shareholders are not required to be UAE residents or be physically present in the UAE. However, UAE residents or corporate entities may act as directors or shareholders in UAE offshore companies.
Moreover, UAE offshore companies:
- May own real estate in the UAE with prior authorization from the authority.
- May maintain bank accounts and deposits in the UAE or worldwide.
- May hold shares in other UAE and worldwide companies.
- May own yachts registered in the UAE.
- Are not obliged to maintain their books and records.
UAE offshore companies offer a variety of additional fiscal and regulatory benefits. Offshore companies, for example, are 100 percent exempt from income and corporate taxes while 100 percent of capital and profits can be repatriated. These benefits allow for more control and flexibility for investors as they grow and expand their business while operating within close proximity to the entire Gulf and global markets in a “real” economy of the UAE.
In addition to the 0% income and corporate taxes UAE offshore companies also have the following tax benefits:
- No import or export taxes
- No capital gains tax
- No value-added tax (VAT)
- No withholding tax
UAE offshore companies can be 100 percent owned by expatriates. Companies can open and operate business bank accounts right away and start taking advantage of the 100 percent tax free corporate environment in the UAE. All of the private information is held confidential and protected, giving the shareholders and directors peace of mind.
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Ideal For Businesses
An offshore company is an ideal option for businesses that do not require a local presence.
Examples of activities acceptable via an offshore company are:
- Trading activities outside the UAE
- Holding shares in international, local or free zone companies
- International consulting
- Investment company
- Holding intellectual property
Offshore companies have the following attractive features:
- 100% tax free in UAE (no corporate tax, no income tax, no VAT);
- 100% expat ownership;
- Absolute privacy, confidentiality and assets protection. There is no public register of shareholders and directors;
- Can easily open and operate a bank account within the UAE and abroad;
- Serve multiple purposes, e.g. trading operations, asset holding & protection, tax planning;
- It is quick to incorporate;
- Physical presence in the UAE is not required for offshore company incorporation;
- No local sponsor required;
As far as the limitations, here are the main ones which investors should be aware of:
- UAE offshore companies may not carry on business within the UAE.
- Offshore companies may not be engaged in banking or insurance activities without a special license.
Following are the main offshore zones in the UAE:
- Ras Al Khaimah