Dubai Offshore Company Formation

Nov 15, 2017 Blog

Dubai Offshore Company Formation

Business Visitor How an offshore company in Dubai can be the most attractive form of tax efficient corporate structure in the world. The thought of creating some form of offshore company in a country like Dubai – which has well publicised taxation benefits, which is not on any OECD, UN or EU unfair tax advantage blacklist and which has attractive and beneficial taxation treaties with many nations around the world – is initially very attractive indeed.

However, dig a little deeper and then on the face of it establishing an offshore company in Dubai actually appears to be complicated, dogged by restrictions and expensive – but as this article will reveal, unravelling the complexity of Dubai offshore company formation need not be so difficult and yes, you can potentially create an attractive and cost efficient entity which is extremely useful for personal and corporate tax planning purposes. If you’re interested in forming an offshore company in Dubai, upon initial investigation you will no doubt come across a certain amount of information that suggests you require a Limited Liability Corporation, a Professional Licence or a Representative Office.   However none of these entities allows for full foreign ownership or removes the requirement of at least having a UAE resident appointed as a service agent for example.   Just take a look: – Limited Liability Corporations in Dubai – these are actually a form of JV between a foreigner and a local UAE citizen.  

The foreign party can only own up to 49% of share capital, minimum share capital is AED 300, 000 which must be fully paid up and deposited locally and establishing such an entity can be costly. Professional Licenses – you can apply for such a license if you’re going to be providing a service in Dubai and you have relevant qualifications to back up your claim that you can provide this service professionally.   You’ll need a local service agent who will be paid a minimum of USD 7, 500 annually (usually far more) by you for their services as facilitators allowing you to operate within Dubai. Representative Offices – on the face of it the final alternative seemingly available is to establish a branch of a foreign company with at least 2 years audited accounts in Dubai – but this entity cannot enter into manufacturing or trade business locally and again it has to have a local service agent and possibly apply for certain licensing requirements depending on the nature of the company’s activities. So if none of these solutions was what you had in mind for your Dubai offshore company what can you do?   How on earth can you tap into the potential that surely exists in such a tax efficient and generally attractive location such as Dubai?

Well – for one thing you can get in touch with us and we can help you!   We can put you in touch with our preferred partner who can help you with incorporating any of the above listed solutions and who can also incorporate offshore companies within the free trade zones in Dubai and other emirates within the UAE. If you opt for Dubai offshore company formation within a free trade zone in Dubai you will benefit from 100% foreign ownership, 100% repatriation of capital and profits, 100% corporate and personal income tax exemption, no currency restrictions and excellent support services from local authorities among many, many other benefits. And because we work with one of the most professional and experienced international taxation planning service providers which has detailed and extensive knowledge of all forms of offshore company structure around the world you can have a complexity free, cost efficient and tax effective offshore company formed in Dubai within days! With specific reference to Dubai, our preferred partners can give you the benefit of their professional advice and they can create for you a carefully structured entity which is extremely useful for your overall tax planning purposes – find out more, complete our short offshore advice service form and we will be in touch.

Offshore company formation in the Jebel Ali Free Zone in Dubai is popular and companies already in existence who wish to operate within the zone can apply for a license to trade. The Jebel Ali Free Zone was established in the mid 1980’s to facilitate investment in Dubai.   The success of this particular free zone led directly to the establishment of further free zones throughout the emirate. Although Dubai’s free zones are physically located within the emirate, they have unique legal status.   Companies operating within the zones are considered to be outside of Dubai for legal purposes.   Offshore company formation in the Jebel Ali Free Zone in Dubai is popular and companies already in existence who wish to operate within the zone can apply for a license to trade. Existing companies wishing to operate within the Jebel Ali Free Zone in Dubai can apply for one of five types of license depending on the nature of the business the company will conduct…please note if company activities are likely to span more than one type of operation a license has to be granted for each branch of the business’ operation.  

The five types of license are:

– 1) General trading license

2) Trading license

3) Industrial license

4) Service license

5) National industrial license

Each license can be renewed on an annual basis as long as the company within the zone is in receipt of a lease from the free zone authorities. The benefits and incentives that the Jebel Ali Free Zone offers those wishing to incorporate an offshore company in Dubai or move existing operations to within the scope of the free zone jurisdiction include: – 1) 100% foreign ownership of the company 2) Import and re-export tax free operations 3) Personal income tax free operations 4) 100% allowance for the repatriation of all profits and gains 5) Corporate tax free operations for 50 years 6) Free recruitment policy 7) Ongoing administrative assistance from the free zone authorities Offshore company formation in the Jebel Ali Free Zone in Dubai results in the creation of either ‘Free Zone Establishments’ or ‘Free Zone Companies. ’ 

Both come under the direct and sole regulation of the free zone authorities and the liability of each will be limited to the amount of paid up capital they can present – which must be a minimum of one million Dirhams. A Free Zone Establishment is the most common type of offshore company incorporated within the Jebel Ali Free Zone in Dubai and it is an independent legal entity in its own right rather like a limited company; anyone interested in establishing such a structure need only have one named shareholder and should apply to the Free Zone Establishment Department at the Jebel Ali Free Zone Authority for incorporation.   If incorporation is allowed, the offshore company will be granted a special license to trade within the free zone.   Current registration fees for the incorporation of Free Zone Establishments and Free Zone Companies stand at 5, 000 Dirhams.