Offshore companies in UAE (JAFZA) and RAK offshore company
Offshore companies (often called International Business Companies – IBC) are the long-time applied and praxis-proven option which can be effectively used for assets protection, business structuring and optimization of taxation. What is the difference between offshore and onshore companies? How to define if the offshore company is sufficient to resolve the particular tasks? In order to answer this question it is necessary to look into the specifics of the IBC companies in general and the IBC companies in Free Trade Zone of Dubai (Jebel Ali, JAFZA) and RAK offshore company in particular.
Main characteristics of offshore (IBC) companies in RAK, UAE
Commonly used offshore companies are permitted to use the address in the country of its incorporation (which normally would be the address of the company’s registered agent), whereby such offshore company can do business only outside of the country of its registration (with exception of some of the cases specified below). Such limitation, in most of the cases, is not an essential obstacle for doing the international business over offshore companies as the company’s country of registration can be chosen such a way that this requirement would be fulfilled. Apart from the above, the offshore companies are not considered tax resident in the country of its registration thus can not use the advantages of the Double Tax Treaties (DTT). UAE has signed the DTT with 55 countries which include: Cyprus, Germany, Austria, India, Kazakhstan, Uzbekistan and Singapore, etc. (you can see the complete list of the countries and the texts on the UAE double tax treaties.)
Offshore company, as according to the legal framework, must have the obstacle as well as the registered agent which provides incorporation and administration to this company in the country of its incorporation. There is no requirement for the offshore company to have the real office and the registered agent provides the IBC company with such address (with no additional costs involved) which helps to keep the IBC company costs at the low end.
Alliance Business Advisors Dubai, having the status of the registered agent for the RAK offshore incorporation in UAE, is in the possession of RAK offshore company registration directly in the companies registry without any intermediaries whereby such offshore companies would be opened in the shortest possible time (normally 1-3 business days). The complete RAK IBC company administration would be provided in UAE as well.
There are three Free Trade Zones in UAE (FTZ) which provide the possibility to open offshore (IBC) companies in UAE:
When speaking about Jafza offshore company formation it is necessary to mention its main advantage in terms of such offshore companies in Dubai, JAFZA – the possibility to acquire on the name of such offshore company in Dubai the real estate in some pre-defined areas of Dubai(the properties from the developer “Nakheel” as well as some other projects). Jafza offshore company formation is more expensive in comparison with other types of offshore company in Dubai, UAE, however it provides the perfect solution in case of the requirement to register the properties on the name of the company.
If such advantage if not of a priority then Jafza offshore company formation is not a solution and one shall pay attention to the two other types of RAK offshore company in UAE which can be incorporated in the Free Trade Zones of Emirate Ras Al Khaimah and which perfectly fulfill the requirements for the IBC companies.
Offshore companies of RAK – Ras Al Khaimah – have the following characteristics:
- Tax exemption.
- No requirements to pay the share capital.
- Absence of currency control.
- No requirement for the accounting and audit.
- Number of directors of the offshore company – from one to six (physical persons as well as legal entities).
- Number of shareholder of the offshore company – from one to fifty (physical persons and legal entities).
- No limitations on the citizenship and residency of company directors and shareholders.
- No limitations on the capital expatriation.
- Registered address (not an office) is in the UAE.
- Companies can do business outside of UAE.
- Limitations on the following type of company business:
- Financial activities and insurance.
- Any activity related to media.
- Any activity related to aviation.
- Possibility to open and manage bank accounts in Dubai UAE and abroad.
- Holding activities: holding of shares of the companies in Dubai UAE and abroad is allowed.
From the legal point of view the offshore companies in UAE are the limited liability companies which limit the shareholders liability by the share capital to the extent of their shareholdings in the company. As according to the UAE offshore (IBC) companies registering authority regulations, the minimum share capital for RAK offshore incorporation shall be AED 1.000,- whereby, as was mentioned above, there is no requirement to pay this share capital, it shall only be indicated in the company’s memorandum and articles.
UAE does not have the state registry of the shareholders and directors for offshore companies thus the company must provide the copy of its shareholder and directors registry to its registered agent.
The powers of directors of the IBC company can be limited by the shareholders resolution of the offshore company and such change would be indicated in the company’s memorandum and articles respectively – after the relevant approval by the companies registry.
Below are some of the possible types of activities of the Dubai, UAE offshore companies (outside of the country):
- International trading.
- Holding activities (with the right to purchase shares of the companies in UAE and abroad).
- Professional services.
- Holding of real estate (outside of UAE and in some designated areas of Dubai, UAE).
- Opening and managing bank accounts (in UAE and abroad).
The first step for RAK offshore incorporation is the name check for its availability in the companies registry. The company name shall end with Ltd. (Limited) and shall not include the following words: insurance, assurance, bank, building society, co-operative, bund, Municipal, Chamber of Commerce, trust, Royal, chartered, finance, mutual fund, Emirate and Emirates.
Main documents required for RAK offshore incorporation, UAE:
- Passport copy of shareholder and director.
- Bank recommendation letter.
- Confirmation on the residency address of the company shareholder – utility bill, account statement with the indication of the residential address.
Our Advisors would help you to incorporate your offshore companies in UAE – in Dubai and RAK is the fast and efficient manner as well as bank account opening in Dubai for such company in the reliable bank in UAE.
To receive additional info and advice on the incorporation of the offshore companies in UAE, Dubai, please send us your request.