Starting a Dubai offshore business is a very popular, tax efficient corporate structure for those wanting to take part in international trade.
An offshore business is legally tax exempt, can be completely foreign-owned, does not have accounting obligations and allows you to open bank accounts in the country as well as abroad.
So it provides a great deal of both flexibility freedom – and nowhere is better for offshore company incorporation than the UAE.
Let’s look at some of the advantages of offshore company formation in the UAE, the documents you need to apply, how the process works, and how offshore differs from free zone setup.
Advantages of offshore company formation in the UAE
Setting up an offshore company in the UAE has a huge number of advantages. For a start, the setup is quick and simple, particularly when you work with a company formation specialist. In addition, shareholders and directors are not required to register their names/details for public record, and the company is legally exempt from annual accounting and tax obligations.
Some other key advantages to consider:
- It allows you to open a corporate bank account in Dubai
- There are opportunities to enter international markets
- You can benefit from stable and business-friendly legal system and a flexible regulatory regime
- There is tax neutrality on international earnings in respect of personal or company income, capital gains and inheritance taxes – depending on jurisdiction
- You gain access to global funding
- You have the ability to separate or protect assets from operating entities
It should be noted that with an offshore company you cannot trade in Dubai/UAE, rent offices, employ staff in the UAE or obtain a residence visa or work visa for employees. For that you would need to set up a free zone company (we will look at those difference in more detail later).
UAE offshore business activities
Offshore company formation in the UAE means you can exercise almost any type of business as long as that business is carried out outside the country.
Often offshore companies focus on international trading, or are set up as a holding company, or a shipping company, as a way of owning real estate, as international consulting services, or even to register patents.
So there is great flexibility here, as long as those few key guidelines are followed.
Documents needed to start an offshore company
To start a Dubai Offshore company, you would initially need the following documents:
For individual shareholders:
- Attested passport copy of the owner/shareholder
- Proof of residency
- Original bank reference document
- Details of the owner/shareholder
- Preferred name of the company to be formed
- Activities of the newly formed offshore company
- The hierarchy of beneficiaries
For corporate shareholders:
- Board resolution
- Memorandum of Association
- Parent company certificate mentioning the name of shareholders/directors, and duly attested
- Hierarchy of beneficiaries
Start an offshore company – step by step
Offshore Company formation in the UAE is an easy and straight-forward process, especially when working with a company formation specialist. The entire process can be completed in a matter of weeks.
Here is your step by step guide, although please note that there may be minor variations.
- Select your company name: The name of your company must be verified with the registrar. It must not include the following words: insurance, bank, finance, building society, cooperative, fund, municipal, chamber of commerce, trust, royal, chartered, mutual fund, Emirate or Emirates. At the end, ensure the company name has Ltd. or Incorporated.
- Complete an application: In order to do this, you’ll need to have gathered the necessary documents. These include an attested passport copy for all individual shareholders, proof of residency, preferred name of the company being formed, and details of the business activities that will be undertaken by the newly formed company.
- Submit completed application: The form must be submitted to the authorities for their review.
- Draft a Memorandum of Association (MoA): Memorandum and Articles are provided in English.
- Start your company: Once the MoA is drafted and the documents are reviewed and approved by the authority, you can officially start your company.
- Open an offshore bank account: This must be completed after the registration.
Offshore vs free zone company
As mentioned earlier, it’s important to be clear on the differences between free zone and offshore setups. In short, free zone companies exist physically and can conduct business in UAE, with offices and employees all UAE-based. With free zone companies you can also apply for visas for yourself and your employees. Meanwhile, offshore companies are only registered in the UAE without being entitled to operate business activity in the UAE, and you are not eligible to apply for a residency visa.
Working with a company formation specialist
When it comes to offshore company formation in the UAE, it’s a good idea to work with a Dubai company formation specialist such as Business Incorporation Zone (BIZ). We are a team of company registration professionals who are passionate about bringing the dreams of aspiring business people.
As well as handling your license application, BIZ can also assist with the opening of corporate bank accounts and advise on the most appropriate financial institution to suit your specific needs.
We also offer services to can handle all government formalities and permissions. Since offshore setup does have some variables, being taken through it by an expert is the quickest and easiest route, reducing hassle and speeding up the entire process.
It gives you the kind of peace of mind you need, knowing that all the details have been taken care of, and you can relax knowing in a very short time your offshore business will be up and running, with all the paperwork complete.
We always go the extra mile for our clients, with long-term relationships based on trust. Setting up a company is an exciting time, and it’s our passion that drives us to deliver the very best for our clients.