Offshore Company Vs Onshore Company Which is Right for You in Dubai?
Dubai is becoming the fastest-growing market due to numerous reasons. There are numerous businessmen who want to set up their business in this emirate because the emirate provides them with uncountable benefits. But when it comes to opening your business in Dubai, then choosing the right business type in Dubai is crucial for opening your business in Dubai.
There are various types of businesses that you can choose to start in Dubai. But offshore and onshore are among the most common and profitable types of business in Dubai. However, choosing between these two types of businesses is really a complicated task because both types of businesses come with several opportunities for businessmen that make it hard to choose the suitable dubai business options.
There are numerous people who become confused when it comes to choosing the right business type in Dubai from onshore and offshore. If you are among those people, then you should definitely invest your time in this article.
In this article, we are going to provide you with an in-depth comparison between offshore vs Onshore business. From basic differences to key differences, we will provide you with each type of information that you need to choose the right type of business.
So, without further delay in our journey of offshore vs Onshore business, let us get started.
Offshore business – Overview
An offshore company is an entity of business that is incorporated in any of the free zones or any other emirates in the UAE. These companies aim to conduct business operations outside of the UAE. Yes, you read it right. These types of companies let foreign investors own and operate or run a business in the UAE without having a physical presence in the Emirates.
These types of dubai business options can be owned by individual or corporate bodies. These companies are also known or famous as non-resident companies. They cannot occupy a space for their company in the UAE.
The best part about these types of companies is that establishing offshore companies is not restricted to entrepreneurs who are wealthy. Start-ups may set themselves up as an offshore company, which is beneficial if they want to step into the international market.
There are numerous offshore companies, like Jebel Ali Free Zone Authority (JAFZA), in Dubai. Moreover, Dubai is offering uncountable benefits for offshore companies:
- A speedier incorporation process
- No corporate tax to pay
- 100% foreign ownership
- Protected assets
- Options to issue numerous shares
- Just 1 shareholder and one director required (at a minimum)
- Privacy
Onshore business – Overview
Onshore companies or businesses, also known as Mainland companies, DEDs, and domestic companies, are business organizations that adhere to the laws and guidelines of the mainland or Dubai. These companies are established in a country to run a business within the border of that country. These companies are often located in more economically developed countries.
In UAE or Dubai, onshore companies are registered with the UAE Department of Economic Development. The primary motive of these businesses is to serve a customer or user base inside the jurisdiction or to tender for the contract of government.
There are numerous benefits to starting an onshore business or company in Dubai. Let us take a look at the top benefits of onshore as choosing the right business type in Dubai:
- Flexible ownership
- More financial freedom with a local bank
- No personal liability
- No capital gains and corporate tax
- Swift registration
- Unlimited visa access for all shareholders
- A straightforward regulatory system
- Benefitting from a tax-free economy
- Access to the local talent in the local area
Key differences between offshore vs Onshore business
As you have read above, offshore and onshore businesses are among the most popular business options in Dubai. Both types of businesses can provide you with numerous benefits. Let us take a look at the key differences between offshore vs Onshore business:
➤License
When it comes to beginning a business in Dubai, acquiring a license is among the most critical steps that you cannot ignore in any way. But suppose you are considering opening an offshore business. In that case, you should not worry about a license because offshore companies do not have a permanent presence in the jurisdiction of the UAE. However, onshore companies are required to register a license for their business license that specifies the operation of their business in Dubai or UAE.
➤Taxation
Taxation policies of Dubai are among the top thing that forces people to start their business in this emirates. The best advantage is for offshore businesses because Dubai has 0% corporate and income tax rates that allow these companies to enjoy significant savings and increased cash flow. Similarly, onshore companies can benefit from any tax agreement signed between Dubai and other countries.
➤Residence VISA
Depending on the size of the company and the number of staff, the government of UAE can issue a UAE residence visa for onshore companies under certain provisions. This allows entrepreneurs to bring employees from different countries instead of hiring local talent from the UAE. In contrast, offshore businesses are not allowed to get residential visas because they do not possess an office or physical presence in Dubai.
➤Office
Onshore businesses are required to either purchase or lease an office or building in any area of Dubai. These companies are required to meet the requirements of minimum office space. In contrast, offshore companies are not required to possess an office space in the Dubai.
➤Cost
Cost of starting offshore businesses is slightly lower than starting an onshore business because there is no restriction on foreign currency and corporate taxes exemptions. Moreover, these businesses have certain terms and trade agreement that impact the overall cost of starting an offshore business in Dubai.
Verdict
When it comes to offshore vs Onshore business, offshore is a clear winner because these dubai business options can be cheaper and easier to maintain than onshore business options. Moreover, these business options also have a few obligations in reporting and auditing.
How Flyingcolours can help you set up your business
Whether you choose the onshore business or offshore business, Flyingcolours can help you to set up both businesses with ease. They have a team of experts that can make your journey to set up your business more easier. Moreover, they can perform numerous tasks for you so you can stay focused on your business operation.
To learn more about Offshore Company Vs Onshore Company, book a free consultation with one of Flyingcolour team advisors, simply call +971 50 5585305 or send WhatsApp messages to +971 4 4542366. you can also drop an email to info (at) flyingcolour (dot) com.
Please note that this article has been published on 11/11/2023 in accordance with the federal policies and updates at the time of writing. For the latest info please talk to our consultant.
