Offshore Company Formation in UAE

Seamless Offshore Business Setup Solutions for International Success

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Offshore companies are set up for operating outside their registered jurisdiction or the location of their primary setup. So UAE offshore companies can’t trade within UAE.

For those outside the UAE, Offshore companies are often confused with Free Zones. The offshore company lies legally outside a nation’s boundary whereas a Free Zone is within, but governed by that local authorities’ own rules which often offer lighter regulation and duty exemptions.

Offshore companies don’t provide UAE residency visas for the owners, while free zones will support Investors with residency status in the UAE.

 

Advantages of UAE offshore business setup

100% ownership possibility

Physical offices not required

No corporate tax applied

Owner personal details not recorded publicly

Multicurrency bank account and ease of business internationally

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Locations for setting up an offshore business in UAE

There are two main offshore company setup options in the UAE and whilst they offer similar elements, there are some differences:

  • RAK International Corporate Centre (RAK ICC)
  • Jebel Ali Free Zone Authority (JAFZA)

Previously, only JAFZA supported property ownership but these two offshore options can both provide cost effective solutions. In the competitive landscape, their offerings have aligned. RAK offers a faster setup and slightly lower cost.

RAK Offshore Company Formation

Ras Al Khaimah (RAK) is one of the seven emirates that form the Federation of the United Arab Emirates (UAE).

The emirate of Ras Al Khaimah (RAK) is located at the northern end of UAE on the coast of the Arabian Gulf. Only 50 minutes from Dubai International Airport (DXB) and 25 minutes from RAK International Airport.

Commonly referred to as RAK, the emirate prides itself on its traditional shipbuilding and trade and is at the forefront of quarrying, manufacturing, and tourism.

Ras Al Khaimah (RAK) has steadily grown and gained credibility as an attractive hub for business with a dynamic and diversified economy. The commercial incentives and low-cost business setup has attracted a wide range of commercial activity.

Additionally, a RAK offshore company offers a fast and viable solution for those companies looking to redomicile their company from more traditional offshore solutions.

Re-domicile advantages

  • Traditional Offshore jurisdictions are under pressure due to increasing regulatory issues, and demonstrating substance.
  • Traditional offshore solutions are offer increasing risks for reputational damage
  • Urgent need to meet Economic Substance Requirements (ESR)

Greatest advantages

  • Can maintain existing legal status
  • Can preserve operational and banking history
  • Access to common law courts (ADGM and DIFC English Common Law)
  • Wills registration to protect the assets and shares in the name of the company

Offshore Company setup in Dubai- JAFZA

JAFZA is an industrial area near the Jebel Ali Port, one of the world’s biggest shipping ports, which allows the international companies based there to enjoy the special privileges of the free zone.

JAFZA is located just beyond the Dubai Marina area, and about an hour’s drive from Abu Dhabi, the UAE’s capital.

The Jebel Ali Free Zone Authority (JAFZA), in conjunction with the Dubai Government, introduced the Offshore Company in 2003 under the Jebel Ali Free Zone Offshore Companies Regulations 2003.

One of the key differences between JAFZA and RAK offshore solutions is that JAFZA supports the owning of property in the UAE.

Why is JAFZA a good option for owning property?

JAFZA offshore companies are authorized to own assets and properties in Dubai due to an MOU with the Dubai Land Department.

When you buy property via a JAFZA Offshore company setup, the company name is reflected on the title deed. This provides additional layers of anonymity as your name will not be displayed either on the title deed or on JAFZA company’s certificate of incorporation as JAFZA Offshore is a closed jurisdiction.

Directors of JAFZA Offshore companies can be an individual other than the shareholder. In case of death of the shareholder, the rental and other management of properties will be unaffected and will be carried out by the director till court orders to transfer shares in the names of heirs.

If the property were to be held in a person’s own name, then all property management transactions would be blocked until courts made a decision.

Additionally, property buyers should register a Will with DIFC so that in the event of their death, executing the transfer of property/shares of the company to any prescribed heirs will be straightforward. (non-Muslims only).

Off-plan property purchased by a JAFZA Offshore Company insulates the buyer from any unpaid future liabilities, due to the limited liability nature of a JAFZA Offshore company. With respect to project development, the same limitation of liability will be true.

Offshore business setup with Nexus partners

Both JAFZA and RAK represent good solutions for an offshore company. But choosing one may be a bit confusing. If you’re looking to incorporate your business in UAE, be sure to talk to our business setup consultants.

NEXUS Partners can support you with your choice of jurisdiction and manage the whole setup process on your behalf to meet your requirements. You can get in touch via the contact form at the bottom or calling +971 (0)52 772 8066.

 

JAFZA offshore vs RAK offshore

You can see the details and main characteristics of both JAFZA and RAK offshore solutions compared in the table below:

RAKICCJAFZA
100% Foreign OwnershipYesYes
Corporate Ownership allowedYesYes
Corporate Directors allowedYesNo
Minimum number of shareholders11
Minimum number of Directors11
Directors visible on Public registerNoNo
Company Secretary requiredYesYes
Minimum share capitalNoneNone
Annual reportingRecords to be kept for 7 years, but not lodged with AuthorityRecords to be kept for 10 years & Auditor appointed
UAE Real Estate ownership allowedYesYes
Can hold shares in UAE companiesYesYes
Local or International corporate bank account allowedYesYes
Offer Residency VisasNoNo
Requires travel to UAE to setupNoNo
Time to incorporate5 days14 days