Offshore Company Formation in Dubai UAE

Today, the UAE is the leading trade and business hub of the Near East. Local authorities encourage investments in the country in different ways and have created all conditions for foreigners to do business with ease by offering a variety of forms of incorporation and solutions for business. You can establish a local company, free zone company or offshore company in any region of the UAE. The choice of company type may depend on different factors, including the field of activity, however formation of an offshore company in Dubai offers exclusive advantages for expatriates.

An offshore company is a legal entity established to conduct business activity outside the country of its incorporation or place of its ultimate ownership. Such companies are governed by the legislation of the jurisdiction where they are incorporated. The main goal of formation of an offshore company is to manage one’s own capital and legally decrease or abolish any tax payments.

There are a few reasons to incorporate an offshore company in the UAE, the main of which is high level of confidentiality and accordingly safety of the company’s assets.

The main advantages of using offshore corporate structure are:

An offshore company in the Dubai can be used for international trade, asset protection, tax planning, purchase of real estate in certain regions of the UAE, purchase of shares in other companies, trust funds, etc.

Establishment of an offshore company is only more profitable for some kinds of business, and in spite of all advantages offshore companies have their disadvantages, such as:

• Any commercial transactions in the territory of the UAE are prohibited
• Such a company does not imply issue of visas or hire of employees
• Limitations on activity of banks, insurance and financial entities
• Difficulties with opening a bank account

It is also worth noting that an offshore company in the UAE does not receive a license but receives a certificate of incorporation. A business license can only be obtained for mainland and free zone companies. Permitted kinds of activity of an offshore company are included in the memorandum and articles of association.

All actions and administrative duties that require interaction with authorities in respect of an offshore company shall be taken and fulfilled through the registered agent on behalf of the company’s shareholder(s). The registered agent will also stay in touch with the register of companies to pay the annual renewal fee for the offshore company. As offshore companies are not allowed to have their own registered address, the registered address of an offshore company is the address of its registered agent.

Today, several kinds of offshore companies are available that can be incorporated in the UAE. If we generalize about them, we can name the following types:

A significant feature of such a company is that the liability of shareholders is limited to the amount of capital they have invested. A CLS must at all times have at least one shareholder and one director. A CLS can issue bonus shares, partially paid shares or unpaid shares. For succession purposes, shares may be held by more than one person as joint owners.

Possible uses of a CLS

Companies limited by shares are flexible and administratively have simple corporate vehicles that can be used for a number of purposes, namely:

• International Business Company
• Holding Company
• Special Purpose Vehicle (SPV)
• Joint Venture
• Project Company
• Family Office
• Segregated Portfolio Company

The essential feature of a CLG is that its guarantee members give an undertaking to contribute to the CLG a specified amount in the event of its liquidation. The liability of a guarantee member is limited to that specified amount. The membership rights of guarantee members are not transferable. A guarantee member remains liable to the company for one year after it ceases to be a member.

Possible uses of a CLG

A classic example of use of this company is acting as an incorporated association or conferring on apartment owners certain membership rights in the company that manages the real estate development.

An unlimited company is a company incorporated with or without a share capital where the liability of the members is not limited: that is, its members have a joint, several and unlimited obligation to meet any insufficiency in the assets of the company to enable the settlement of any outstanding liability in the event of the company’s formal liquidation. Similarly to a general partnership, the members of a UC have unlimited liability; unlike a general partnership, a UC is a separate legal entity capable of owning assets in its own name.

Possible uses of a UC

Unlimited companies are flexible and administratively simple corporate vehicles that can be used for different purposes:

• A UC may be of use to avoid the need for shareholder guarantees to support the credit of the UC, for example where a UC is dealing with a sole customer, it requires recourse to the shareholders of the UC
• International tax planning

The UAE has three offshore jurisdictions:

All the three jurisdictions have their special advantages. For instance, RAK ICC and JAFZA are two offshore companies permitted by law to own immovable property in Dubai.

In accordance with the local legislation on companies, all offshore companies in the UAE must appoint an authorized registered agent.

If you are planning to establish an offshore company in the Dubai or UAE, you will have to take into account a few main aspects. Here are the main steps of offshore company incorporation in the UAE:

Offshore business structure ideally suits companies engaged in international trade, export/import, logistics, delivery, etc. Advantages for investors, such as no need to take on lease an office or any production premises, no need for a residence permit, saving on taxes, no customs duties, etc., make an offshore company very attractive. However, it causes certain difficulties when opening a bank account.

There are a few jurisdictions in the UAE for incorporation of offshore companies. Each offshore company must have an authorized agent approved by the authorities of the jurisdiction, and this is where our company plays an important role. We have necessary knowledge of the local market and many years of experience to help you choose a jurisdiction and control the process of incorporation of your offshore company. Contact us now, and we will take care of incorporation of your company.

*The listed price does not include the state fees.