Offshore Company and Its Benefits
An offshore company in UAE allows the shareholder to do business internationally. They can’t do business with UAE directly. UAE OFFSHORE companies have robust setup. There are three jurisdictions named: JAFZA OFFSHORE, RAK ICC OFFSHORE and AJMAN OFFSHORE.
Is an offshore company legal?
It is 100% legal to have an offshore company in the UAE. Though the OFFSHORE COMPANY doesn’t allow doing business with UAE but an offshore company comes with many benefits which allow the entrepreneur to reach his financial target utilising the offshore company.
Benefits of an offshore company
The offshore company comes with bundle of advantages as mentioned below:
- Low set up cost- Unlike the Dubai mainland and Freezone companies, set up cost of an OFFSHORE company is relatively lesser
- Ownership –This company can be 100% owned by foreign investor
- Taxation-The main reason for many companies forming an offshore company is to save their company from paying huge amount of tax. A company can show the profit under their offshore company to save taxes
- No audit-The company is not required to do any auditing also
- Multiple currency bank account – The bank account of the company can be opened with multiple currencies
- Activities-Trading, services or holding activities are available for opening the offshore company
- Higher level of confidentiality-The offshore companies in UAE is closed register company and the names of the shareholder remains confidential
- Registered agent’s address is considered as registered office address for the company
- No Employee recruitment-There is no visa option in an offshore company
Documents required
- CV of the Shareholder
- Valid passport copies of the shareholders
- Last 6 months bank statements
- Current utility bill
Utilisation of an offshore company
An offshore company can be utilised for different ways
- Activity Utilisation – Depending on the activity the company can do trading or services from one country to another country
- Assigning properties under offshore companies-Many entrepreneur forms an offshore company and then register their assets under this company to acquire 100% ownership. Even they can change the ownership of the company by doing an amendment to change the ownership of the assets under this company
- Holding company-An offshore company can become an umbrella under which all other freezone and mainland company can be made by making the offshore company a holding company in those companies. Change of any individual ownership becomes easier while forming the companies in this structure. It also restricts the liabilities limited to company
- Registering Intellectual properties-Intellectual properties are assets of an entrepreneur and hence it’s better to register them under a company rather than an individual. Hence registering the intellectual properties under an offshore company provides the full ownership and also can extend permit to any other company under its ownership to utilise the intellectual properties
This blog is written by Ms. Ananya Mukherjee, Business Advisor at Flyingcolour Business Setup, VAT and Accounting Services, Dubai. If you have any question regarding setting up an offshore in Dubai or anywhere across the UAE then please contact us at +971 4 4542366 or email us at info[at]flyingcolour[dot]com.
Please Note: This article was published on 16th December, 2020. The information provided in the article is based on the policies and rules applicable at the time of writing it. Talk to one of our consultants for any recent update or change.
