What Makes UAE an Ideal Choice for your Offshore Company?
Over the last few decades, UAE has emerged as a country of choice for business owners who are willing to expand their business. There are many reasons ranging from tax advantages, restructuring, assets protection to global presence.
An UAE offshore company is a legal business entity formed under the laws and some jurisdictions as a tax-free company which is not permitted to be involved in any business within UAE. Offshore companies are most commonly used to facilitate international business, investment activities as well as offshore banking, minimizing tax, ownership of properties & assets and assets protection.
The major jurisdictions offering offshore company formation in UAE are Jebel Ali Free Zone (JAFZA offshore), Ras Al Khaimah International Corporate Centre – RAKICC offshore and Ajman offshore.
What constitutes UAE as a favorable jurisdiction?
Before selecting UAE as an ideal choice for your offshore company, you should know how UAE has an upper hand compared to other jurisdictions globally. The UAE ranks high on the World Bank’s ‘Ease of Doing Business Index’. Also the income earned outside the country of offshore jurisdictions is not taxable in most of the countries and any business owner who wants to expand his business inside the country with an onshore registration has to undergo the tax implications prevailing in the country for the income earned within the country. In this scenario the UAE offshores will be the best choice for business owners because of the 0% corporate and personal income taxes.
Comparison with popular international offshore jurisdictions
Below is the comparison of UAE with other popular offshore jurisdictions in the world:
Hong Kong
The corporate tax rate is at 16.5% and income tax is at 15%. Also the cost compared to UAE for the setup is on higher side in this jurisdiction.
Singapore
Though Singapore ranks above UAE in the World Bank’s report of ease of doing business, but when it comes to taxation, UAE levies zero corporate and personal income tax whereas in Singapore the taxes can reach from 17% and up to 22% respectively.
Cyprus
Cyprus ranks behind UAE in World Bank’s report of doing business. The taxation in Cyprus ranges from 12.5% to 35% and also audit reports are required whereas in UAE for offshore there is no requirement for auditing.
Mauritius
The Mauritius tax rate of up to 15% on corporate as well as personal income fails to compete with the UAE. The country is also ranking lower in the ‘Ease of Doing Business’ index.
British Virgin Islands (BVI)
Even though there are no capital gain and no profit tax in BVI but technically there are payroll taxes levied on both the employees and employer. There is also business activities restrictions for offshores company in BVI such as insurance, investment services etc. the banking sector is also limited in BVI. Also there is a restriction to own properties in BVI with a BVI business company.
What UAE offshore offers?
Corporate structuring: Business owners have an option to structure their several businesses through offshore company set up. The offshore company formation in UAE will allow the companies to hold shares of companies locally and internationally. Even though every country has its own rules and regulations for taxes, regulations of the origin of the offshore company is applicable when the profits are repatriated when an offshore corporate structuring is followed for your business.
Offshore bank account: The business owners are allowed to open an offshore bank account in UAE as well as outside UAE with multiple currencies account based on requirements. Offshore banking has gained substantial importance because it allows flexible transactions and facilitates in managing your worldwide financial commitments at ease. The bank account opening depends on the bank compliance approval after the requirements are met.
Offshore agent: In case you need to register the offshore company, you have to get in touch with a registered agent. Registered agent would help you to incorporate the company at the shortest possible time as well as provide further administrative support. The offshore companies address will be of the registered agent address as offshore companies need not have any physical office space.
Property ownership: Offshore Company in UAE will help you to buy properties and other physical assets to secure the assets. Each jurisdiction has its own regulations to own properties. The business owners can buy and sell properties or can even rent and bring the funds to offshore company bank account and can use for further expansion of business or invest in other properties.
This blog post written by Mr. Sajeev (Senior Business Consultant). Feel free to call our Business Adviser today for a quality consultation relating your queries. Please send inquiry to info[at]flyingcolour[dot]com or call +971 4 4542366
