Offshore Company Formation in UAE

Recently, the UAE has turned to be a promising land for a number of local, regional and global businesses. The economic growth of this country is in fine shape and quite efficiently crafting its growth with the flow of global trends. According to CBRE, almost half of the global corporations are operating in Dubai. This makes the city a dynamic business zone in the UAE. In a very short frame of time, the city has established its reputation and image to deliver a diverse and vibrant destination for first-class infrastructure, hospitality and a range of attractions.

From the perspective of an offshore company, the UAE can be the best destination to start or expand business operations. Since 2003, Dubai has earned the reputation of being one of the ideal hubs for MNCs and businesses operating around the world. Most of the offshore companies operating in UAE are recognized and thoroughly supported by its government. The companies receive every financial advantage as per the norm, along with tax and custom-free benefits. Considering this trend, the country has continued to be the best destination to set up business headquarters. Quite naturally, when an offshore company starts its operation in the UAE, it is able to provide all basic and new-age amenities for a business.

An introduction to Offshore Company

To make this clear, one must discern the concept of a “company” and how the same is distinguished by the tag “offshore”.

A company is defined as a legal entity that is engaged in legal business activities including, partnership, proprietorship, or any public or corporate corporation. Different companies have different rights under the law.

Now, the tag is “offshore” is applicable to a company when it is operating outside its own jurisdiction.

When a legal business entity sets up intending to operate its business exercises outside the registered jurisdiction and/or go out of the location from the actual ownership, it is known as an Offshore Company. Any individual or corporate body can own the business entity. An Offshore Company usually does not perform the routine business activity in that country of origin. Such establishments are also termed as non-resident companies; they are not able to occupy office space in the UAE. Most of the Offshore Companies operate in countries which are prone to minimal or reduced taxation policies. Such countries are known as tax havens. With the online presence, the world is becoming smaller and hence, communicating and travelling is an easy consideration, here. This makes offshore companies operate inexpensively, easily and swiftly. Furthermore, investing becomes profitable due to decreased tax burdens.

Essential features of offshore companies operating in the UAE

The UAE is known for being an extremely successful business hub that simplifies infrastructure by computing and easy and maneuverable platform to a company. The country is the perfect generator for profitable business results, especially in terms of offshore companies and entrepreneurs. This makes the United Arab Emirates a popular master jurisdiction for offshore companies to sail to foreign lands. Some of the important features of an offshore company operating in the UAE are:

  • Possible to maintain worldwide or UAE deposits and bank accounts.
  • Possible to have a corporate, UAE or non-UAE resident ion the form of a shareholder or its director.
  • It is not obligated to maintain books and records.
  • Requires a special license for conducting banking and insurance business.
  • For shareholders or directors, it is not necessary to be present physically in the UAE to run business operations.
  • It can run its business in the virtual form. By law, an offshore company cannot have a physical office in the land of UAE. However, it can either own real estate properties approved by governmental authorities or own shares of other companies.
  • It is not required to obtain a UAE residency Visa.

What are the advantages of an offshore company in the UAE?

The formation of an offshore company in the UAE is welcomed with an array of perks and benefits. These are certainly beneficial for people in business and entrepreneurs. The market in the UAE offers an independent and “whitelisted” overseas territory for international investors. There are a number of advantages for an offshore company registering in the UAE, which includes compensation of the ever-changing fiscal policies. The best part is, an offshore company in the UAE is able to provide a stable economy, confidentiality, anonymity of business, reliable politics with high-level safety norms.

The advantages are briefly discussed below:

Business Anonymity

This is a great benefit when it comes to offshore company registration. This helps a lot when doing business in various jurisdictions of the UAE. One of the notable and paramount importance an offshore company experience is secrecy. The underlying principles may sometimes be kept out of the documentation by performing business operations in the name of an offshore company.

Asset Protection

Offshore company registration enjoys the orb of asset protection due to various jurisdictions. This promotes a stern and reliable platform for the investors in contrast to onshore business managements. For instance, Dubai offshore company, as well as other companies in the UAE, offers asset protection arrangements to a legit foreign depository. This permits an establishment of separate legal jurisdiction between the company secured assets and the creditors.


One of the significant benefits in the land of the UAE is 100 per cent tax-free norms. This creates enhanced transparency among people in business and government, and thus, they can be a part of various business activities while reaping the utmost benefits. Also, this policy of tax management further encourages stakeholders to invest in the UAE and create numerous commercial benefits with better economic ranking.

Lawsuit Protection

Registering in the UAE helps an offshore company to enjoy the benefits of Lawsuit Protection. This enables you to save the possessions, in incidents like legal judgmental court occurrences. Registering under the offshore norms helps a company to get incorporated ethically, although, other possessions and resources of a company stay immune.

DTAA – Double Taxation Avoidance Agreement

DTAA is known as the Double Taxation Avoidance Agreement. It is a unique tax treaty signed by countries so that the investors and foreign residents are benefitted. As per the treaty, international residents and taxpayers can stay away from paying taxes in two different countries, that is, source and the resident country. UAE has signed the DTAA with more than 40 countries, and thus, it becomes the best destination for offshore companies.

Economic Stability

In the UAE, offshore companies have the availability of latest communication infrastructures, modern banking systems, flexible legislative frameworks, and filing & simple incorporations.

Apart from these, other benefits are:

  • 100% exclusion from import and export taxes, corporate taxes and personal taxes.
  • 100% foreign ownership without even requiring the involvement UAE national sponsor or shareholder.
  • Simple operations in international activities.
  • Complete freedom in the repatriation of profits and capital.
  • Easy and simple procedures of share transfers.
  • There’s no requirement of minimum capital for business operations and the minimum numbers of shareholders or directors for an offshore company is just one.
  • Minimized operational costs with the features of world-class banking and other investment management policies.
  • Bank accounts with multi-currency benefits. Funds can be transferred to any foreign bank.
  • Low infrastructure costs with a null requirement for office space.
  • No restrictions for foreign currency.
  • VAT – Value-added taxes and other taxes on capital/ withholding taxes are not pertinent.
  • Swift incorporation within a couple of business days.
  • Business operations nearing global markets.

What is the difference between the free zone and an offshore company?

Most of the times, people often get confused between the free zone company and an offshore company. This is mainly because of a number of similarities between the two and acquiring full ownership for both is applicable by an ex-pat without having the requirement of associating with a local sponsor. Also, both companies can be licensed and registered by free zone authorities. Apart from these two similarities, each setup policy is entirely different along with the purposes.

Free Zone Company

The free zone concept helps with the growth, promotion and development of a business. A number of countries have corresponding models, and thus, it is well-known in the community of international business. The free zones established by the UAE attract global companies that deal with trade and export.

A company can choose to have a branch inside the free zone. In this case, the branch office is not seen as an individual company. It is considered as an extension of the mother company, abroad. If a company wants to incorporate inside the free zone, it is liable to showcase the solvency. The process requires that company to have a bank account that is licensed under the United Arab Emirates. The share capital must be deposited in the account. After the setup meets all the legal norms, the capital will be released by the government and becomes usable for the company.

There are some prerequisites for the initial share capital required under the free zone. These prerequisites vary depending on the Free Zones and purpose of the company. Companies operating under the Free Zone must have a physical office inside the defined area. In case a full-scale office isn’t required, virtual workplaces can be rented.

Offshore Company

In the case of an offshore company, it enjoys an array of features. It can be registered under the free zone to avail the many benefits offered. However, it is not possible to use a substitute for a free zone company.

The major difference is, offshore companies are allowed to run their business process outside the country. They will not be entertained to run a business inside the country. Also, anonymity is a factor. The details of an offshore company are kept anonymous, while information of free zone companies is available over requests.

An offshore company can have a business account with a bank based in the UAE. It will have the ability to own investments both in and out of the country. The income gained by the company can be kept at the business account opened in the UAE.

Offshore companies do not require any minimum capital before incorporation, which is a typical case for a Free Zone Company. In most cases, offshore companies are used as an asset or holding companies for other business establishments.

To conclude Offshore Company Formation in Dubai, UAE

Hallmark International Auditors are registered agents for Offshore company formation in JAFZA, Ajman and RAKEZ. Our Offshore Company Formation Services in UAE include offshore company formation in Dubai, RAK offshore company formation, Ajman offshore company incorporation, JAFZA offshore company incorporation. We are approved and registered agents for offshore company formations in UAE.

In the entire Middle East, the UAE is considered as the new crown, due to the availability of vast facilities and solutions to establish a remunerative environment for ambitious business owners in the modern world. For many business owners, it has now become a necessity to achieve offshore legal forms to settle with business operations with hassle-free choices and advantages. For new entrepreneurs and investors, there are three offshore locations available in the UAE, and these are RAK Offshore, Dubai (JAFZA) Offshore and Ajman Offshore.