Opening an Offshore Company in the UAE – What You Need to Know

22 January 2023

As far as offshore jurisdictions go, the UAE is up there with the favorites. There are many reasons for the region’s popularity, which we will get to. But aside from the company legislation and tax laws, the location makes global business simple.

Positioned between the West and East, with superb access to transportation links in both sea and air, the UAE stands as a bridge between worlds. Their tenacity in their expansion to become a global leader in eCommerce has led to many developments within the region, all aimed at making business easy for potential investors.

In the quest to become the world’s eCommerce superhub, the UAE has been constructing dedicated areas with developments that boast some of the world’s most advanced picking, packing, and shipping technologies. These areas are largely part of the UAE’s network of Free Zones, offering tax-free trade as part of their ease of doing business initiative.

What Are Offshore Companies in the UAE?

Offshore companies in the UAE are a popular business model for entrepreneurs looking to set up a presence in the Middle East without relocating altogether. An offshore business is a structure that operates legally outside of its home jurisdiction, thus taking advantage of local perks. These benefits can include tax savings, asset protection, full ownership of the business, confidentiality, facilitated access to international trade, etc.

The United Arab Emirates constitutes an attractive choice for foreign investors and business owners because of the minimal taxes it imposes on profits, as well as the supportive environment it provides. From its Free Zone system to its world-class banking and technologically advanced infrastructure, the country is ideal for establishing a business, regardless of the type of activities you wish to pursue.

Company formation in Dubai or the UAE Free Zone can be an intimidating process. But with SFM experts at your side, company registration is a quick, hassle-free process.

Offshore Companies in the UAE: The Business Benefits

A stable and trusted economy, the UAE offers unrivaled protection of confidentiality and rights for investors. The region has established electronic platforms through which companies can be established, making the process quick, simple, and advantageous.

Ranking 16th out of 190 countries in the last Ease of Doing Business Index, 1st in terms of business efficiency, and 7th in economic performance, it is easy to see why the Emirates is such a popular choice.

The list of benefits for offshore formation in the UAE is as follows:

  • 100% foreign ownership
  • 100% exemption on corporate and personal income tax
  • 100% repatriation of capital and profits
  • No accounting filing requirements and no paid-up capital requirement
  • Just one shareholder and one director needed to register the company online
  • Access to corporate bank accounts is simple with an offshore company; investors can open bank accounts locally and internationally
  • Allowed to hold shares in UAE free zone companies and LLCs as well as entities outside the UAE
  • Offshore Companies can own property in designated areas in Dubai

How to Set Up Your Offshore Company in the UAE?

If you are looking to register a company online or in person, there are a few key steps to follow. SFM’s business set-up services will help you navigate these administrative obligations, ensuring your offshore company in the UAE is off to the best possible start.

Select Your Offshore Jurisdiction

This is one of the most crucial aspects of setting up offshore companies in the UAE, as each jurisdiction has particular characteristics.

  • The Ras Al Khaimah International Corporate Centre (RAK ICC) Free Zone boasts an exceptional growth rate and is now considered one of the most dynamic Emirates. It shares several features with JAFZA but remains an outstanding choice for those who would rather not be held by any local shareholding requirements. The incorporation process for RAK offshore companies is straightforward, particularly with the support of company formation experts such as SFM, and does not require you to be physically present in the UAE. RAK offshore companies are entitled to invest in real estate without a specific business license, and there is no obligation to submit an annual audit report.
  • The Jebel Ali Free Zone (JAFZA) is located in Dubai and just an hour away from Abu Dhabi. It boasts cutting-edge infrastructure and services designed to help businesses of all sizes expand their local and international trade opportunities. While JAFZA is one of the more expensive locations to set up offshore companies in the UAE and demands that the shareholders reside (or at least visit) the Emirates to complete their incorporation, it remains the first Free Zone ever established and maintains an excellent reputation worldwide.
  • The Ajman Free Zone is considered one of the most cost-effective options, requiring minimal expenditure on operational costs. The jurisdiction supports various types of licenses and allows for easy alterations to your business structure, whether you wish to include a new corporate shareholder, remove one, modify the nature of your activities, etc. Offshore companies in the UAE Ajman Free Zone require at least one shareholder and one director, but both roles can be fulfilled by the same person.

Select Your Registered Agent

Offshore companies in the UAE must register through a registered and authorized agent located in the UAE. SFM is a reputable registered agent located in Dubai providing registered agent services and other corporate services. It’s always worth enlisting the help of professionals to determine which combination would work best for your specific needs.

Choose Your Company Name

Setting up an offshore company in the UAE requires applicants to register a company name, but not just any string of letters will do. The first rule is that the name must include the words “Limited” or “Ltd.”, stating that the business entity is registered as an offshore structure. Next, you should make sure no expression used in the name could be construed as offensive, religious, political, or sectarian. Personal names are permitted so long as they are associated with the company owners or directors and used in full. In order to convey clear meaning, avoid using abbreviations or initials unless they have an established definition.

What You Will Need

With your decision made to form a company in the UAE, you will need to provide certain documentation.

The authorities will need to see address and identity proofs for all directors and shareholders as well as their resumes. Certified Photocopies of these documents will be required to forward to the authority. You should also supply a well-drafted and meticulous business plan for the bank account opening process.

After the documentation has been submitted and approved, a Memorandum of Association (MoA) and Articles of Association (AoA) need to be filed and drafted in English for review by the relevant authorities. Once approved, the company will be registered, and you are free to begin your business activity and apply to open a bank account.

At SFM, we provide a dedicated account manager to oversee the formation of your offshore company in the UAE. Our simple 5-step process ensures that the stress of preparing paperwork, documentation, and applications is minimal.

Set Up Your Offshore Company in the UAE With SFM

SFM has been a world-leading corporate service provider since 2006. Our experience in company formation and offshore business solutions is paired with an unwavering commitment to excellence. Whether you’re looking to diversify your business ventures, invest, or relocate your company entirely, we’re here to provide an extensive range of consulting services and corporate finance activities across 45+ international jurisdictions.

Thanks to our physical presence in the United Arab Emirates, we can be at your side throughout your structuring and development phases, offering guidance at every turn.

Get in touch now to discuss your situation and needs with a specialized consultant specifically assigned to you.

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