- Offshore zones / centres in Dubai, UAE

Offshore zones / centres in Dubai, UAE

Offshore zones are usually called the countries / territories where there is the possibility to register companies with a special taxation regime. Such countries are, for example, the British Virgin Islands, Belize, Panama and others. Further reading in detail – see “Offshore centres/ zones  – list of countries”

There is a precise distinction between offshore and onshore companies in those offshore zones / countries in terms of tax policies and where those companies can execute their business activity.

The subject of offshore zones / centres in Dubai requires some certain clarifications for a number of reasons.

1. As opposed to the offshore zones in typical offshore jurisdictions, where the rule applies that taxes are levied if the business is done inside the country, there are generally no taxes levied on most types of business in Dubai and other Emirates, regardless of whether the business is executed inside the country or abroad.

2. In Emirates there are a couple of offshore centres (effectively – Free Trade Zones) which can be considered, from the standing point of the type of companies which can be registered there, as offshore zones / centres of Dubai and other Emirates of UAE.

3. Offshore zones in Dubai are not included into the “black” list of territories, that exercise the tax exemption policy for business that is executed outside the country, but levy taxes on business inside the country.

4. Apart from the typical offshore companies which are taxed at 0%rate and have the right of executing business outside the country, Dubai and other Emirates also offer companies registration in offshore zones (they are called “Free economic zones” in the Emirates), whereby business can be executed inside the country and is taxed at rate of 0% as well.

5. As opposed to many offshore zones having virtually no infrastructure for business, Dubai and the Emirates, noticeably and favourably distinguish themselves in that regard by the availability of such.

6. Companies registered in the majority of the typical offshore zones often do not have the right of opening bank account in the country of registration. Besides, the majority of such countries simply lack in a well-developed banking sector. In case of the Emirates, a company registered in offshore zone in Dubai or other Emirate, can open bank account in Dubai, where there is a wide range of large and reliable local and international banks.