Offshore companies are formed for operating outside their registered jurisdiction or the location of their primary setup that comes with complete privacy and confidentiality regarding your business information and financial matters. So, UAE offshore companies can’t trade within UAE.
An offshore business is a wholly owned LLC which is legally tax exempt and has no tax obligation or no annual books of accounts. If you are looking for privacy and anonymity in your business, then you might want to consider an offshore company
Dubai Offshore Business opening is a prominent, tax efficient and cost-effective business structure for foreign investors who are planning to be a successful entrepreneur globally.
In Dubai, Offshore companies can be located in Jemel Ali Free Zone (Jafza). Only Companies who have their business setup in JAFZA (Jebel Ali Free Zone Authority) will be allowed to hold residential and commercial properties inside Dubai. A Jafza offshore company is not issued with a business licence, only a certificate of incorporation. Such company is not allowed to carry out the business in the country of its incorporation in UAE. It can do the business on the international scale only. Also, Offshore companies cannot allow UAE residency visas for their owners.
An offshore company setup in Jafza requires a minimum of one or more shareholders. There is no restriction on the maximum number of shareholders for this formation type. A shareholder can be an individual (person), a non-individual (company), or a combination of both.
Jebel Ali offshore can open a UAE bank account. The account can be operated through online banking facility.
A Registered agent is appointed to handle incorporation procedure in Dubai. The registered agent can be a business setup company in Dubai who will take care of the paperwork and the registration process. Your personal visit for signature verification is required. If a company director is a different person, his visit is also mandatory. Offshore company registration in Dubai requires 2 directors only in case it’s a JAFZA offshore.
Foreign Investors choose to start offshore companies in Dubai mainly due to the reason that they don’t need to pay any corporate tax in the UAE on profits generated elsewhere. If the company stayed in its original jurisdiction, it would pay more tax, so starting an offshore company here can actually save thousands of dollars in tax.
Following Business can be handled through Offshore Company:
- Property holding firms
- IP (intellectual property) holding companies
- Shipping firms
- General trading companies
- Online advertising companies
- Distribution and logistics firms
- General (international) trading companies
- Professional services and consulting
- Various types of brokers
It’s important to note that offshore companies can be based in Dubai, but they cannot do any trading inside the country, or employ people in the UAE; all business they carry on must happen strictly outside the UAE. If you want to trade in the UAE or with partners here, you would need to open a mainland company or a free zone company. you will be able to open a UAE bank account and hold many different currencies.
An offshore company does not need to be audited, nor must it publish its accounts. This makes them very private vehicles.
Following are the summarised main advantages of an Offshore Company:
- 100% foreign ownership
- 100% tax exemption – no taxation on any incomes
- No need for physical existence– you could run your business virtually
- Fast registration – fast incorporation process
- No financial reporting or auditing
- The ability to hold a bank account with multiple currencies
- Financial confidentiality
- No information exchange of taxation and agreements with any other company
- Confidential and highly flexible banking system for high-net worth global investors
- No public records of shareholders and directors
- Strong legislation to protect the identity of investors
- No restrictions to authorized capital
- Cost-effective solutions
Some Demerits of Off shore Establishment are as follows:
- You are not allowed to rent an office or a warehouse
- No visa will be provided
- Some business activities are not allowed, such as banking and insurance
- You are not allowed to run your business through a mainland zone or a free zone.
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