Offshore company formation in Dubai
Who wouldn’t like to start a company with zero corporate tax and 100 percent foreign ownership in a stable and business friendly environment of Dubai?
If you want a quick escape from complex regulation and high taxes in the country, it’s always a good idea to opt for offshore company formation in Dubai. This company structure makes international trade a hassle-free experience for you. You can optimize your savings and protect your assets while growing your business at an exponential rate.
Doesn’t it all sound promising? It really does.
Before Prospr shares a step by step guide of offshore company formation in Dubai, we would like you to know.
What exactly is an Offshore company?
It is a company that is formed outside the company’s home country. The purpose of establishing this legal business entity is to enjoy the benefits of tax optimization, experience confidentiality and conduct international business with ease.
When it comes to an offshore company formation in Dubai, free zones are the best options you can have. Tax exemptions and full foreign ownership are the main benefits of opening an offshore company in the UAE.
Here are some key features of an offshore company
Registration
In Dubai, you register an offshore company under specific jurisdictions. Out of 7 free zones, following three offers you a chance to open an offshore company in UAE:
- Jebel Ali Free Zone (JAFZA)
- Ras Al Khaimah International Corporate Centre (RAK), and
- or Ajman Free Zone AFZ
Legal structure
An offshore company is a legal entity separate from its owner, thereby it offers limited liability protection. Common legal structure of an offshore company in Dubai are:
- Limited liability companies (LLCs)
- Limited companies
- Limited partnerships
Tax Benefits
No matter how much profit an offshore company makes in free zone, profit and incomes are subject to no import/export duties, no withholding tax, no income tax.
Ownership
As a foreigner during an offshore company formation in Dubai, you won’t have to share the ownership. You enjoy 100 percent ownership and control of your business. There is no need to seek a local partner or sponsor.
Easy banking
Since many offshore companies are built for ease of international business, thereby when you start your offshore company formation, you will be allowed to open multi-currency bank accounts. You can invest in international trade and business with utmost ease and convenience.
No physical office requirement
Offshore company is like a company built on “Paper”, it doesn’t need to set up a physical office in Dubai as it usually require during Mainland company formation in Dubai. Since there is no need to rent any office space, you can reduce your business operational cost to a great extent.
Benefits of an offshore company formation in Dubai
Here are some advantages of setting up an Offshore Dubai company.
Asset Protection
If you want protection for your assets from potential risk or legal actions, the best way to do that is to make this company and then purchase assets in the company’s name.
Ease of Operation
Another plus point of this company is that it doesn’t require too much management from your side. You can set it up quickly and run it without even hiring employees.
Global Business
If you have a plan to conduct business at an international level, then you need to consider making this company. Some consulting service providers usually make the most of this kind of company. This setup is quite suitable for holding companies that want to make substantial investment in other jurisdictions.
Steps for an offshore company formation in Dubai
Offshore company formation is a pretty straightforward process as you don’t need to get any trade license from Dubai Authorities. Here are some steps you need to follow
1-Choose the jurisdiction
The very first thing you need to do is to pick a jurisdiction where you will set up your offshore company. You have three options to choose from, such as:
- Jebel Ali Free Zone (JAFZA)
- Ras Al Khaimah International Corporate Centre (RAK), and
- or Ajman Free Zone AFZ
Learn everything about Ajman free Zone license cost
2-Select a registered agent
Once you decide about a freezone, next you will pick a registered agent from this specific freezone. This registered action will act as an intermediary between you and authorities.
3-Submit documentation
Every freezone has specific document requirement but common documents you need to furnish are:
- Business address
- Proof of residence (utility bills
- Passport copies and CV of all the shareholders
4-Register the company
Once you provide all the documents to the registered agent, they will submit the application alongside the document to the free zone authority in Dubai.
5-Open a bank account
Once registration of your offshore company is done, you will open a corporate bank account.
Why do people open offshore companies in Dubai?
An offshore company can be opened by an individual, company or both. Now the question is why someone opens an offshore company in Dubai. Well, every individual or company has their own reasons but common reasons are
Tax optimization
If you open a company in your home country, you will pay corporate tax on profit and income of your country. On the flip side, when you have an offshore company in Dubai, you enjoy tax exemptions and tax savings with:
- No VAT
- Zero income tax
- Zero Corporate Tax
In addition, you won’t be paying any withholding tax on interest, royalties, and dividends.
Confidentiality and privacy
Foreigners set up offshore companies because they offer them a chance to protect their assets from creditors, legal disputes and political instability in their home’s country. Besides, they can enjoy a high level of confidentiality with this legal entity, which requires minimal disclosure requirements about shareholders and directors.
Ease of international trade
Dubai is located at a strategic place that makes international trade super lucrative. Now if you are interested in international trade, you can enjoy top-notch banking facilities of Corporate banks in Dubai through this company. It will be super easy to conduct international transactions with ease.
Regulatory and operational efficiency
Ease of Setup: The process of an offshore company formation in Dubai is relatively quick and straightforward, often completed within a few days. Offshore companies face fewer regulatory requirements compared to onshore companies, reducing administrative burdens and costs.
Dubai provides a stable and transparent legal environment, offering protection for business activities and investments.
Investment and Asset Holding
An offshore company can own property and other assessments. It’s also possible to hold intellectual property rights such as trademarks and patents. So, when you want to protect your investment and asset, this legal entity feels like the best option you can have. They can also hold intellectual property rights, such as trademarks and patents, offering a layer of protection and management.
Business Flexibility
You can set up an offshore company with an intent to make a consultancy firm, trading company or holding company in Dubai. There will be minimal overhead cost as no physical office requirement is there.
Avoidance of local economic instability
If your home country’s economy is unstable and you want to do business in a stable and safe environment then offshore company formation is the best you can do. It allows you to mitigate all the risks related to economic instability of your country.
FAQs
How much does it cost to set up an offshore company in Dubai?
On average, you need to spend somewhere between AED 10,000 to 30,000 for forming an offshore UAE company. The exact cost will depend on the jurisdiction you choose, though
How long does it take for offshore company setup in Dubai?
The time it takes to make this company completely depends on jurisdiction and authorities, but usually you can form a company within a few weeks.
Can an offshore company do business in UAE?
No, an offshore company can’t conduct any business in the UAE. If you want to do business in Dubai, you need to get a trade license and then set up either a mainland or free zone company.
Prospr can help during offshore company formation in Dubai
We understand how technical it becomes for you to set up an offshore company in Dubai as a foreigner. Since you have zero idea about local laws and regulations. But there is no need to navigate through complexities of business setup in Dubai, when our business consultants are here to help you.
Whether you want to choose the best jurisdiction for an offshore company formation in Dubai or planning to form a company to enjoy zero corporate tax, we are always ready to assist and guide you every step of the way. Send you inquiries to hello@prospr.ae.