Offshore Company Formation – Emirates

United Arab Emirates consist of seven separate emirates governed by emirs. The country is considered to be one of the richest and stable countries in the Middle East. The Emirates offshore companies are widely used for international business, assets protection and operations with real estate. Companies are usually incorporated in two forms: Freezone Company or International Business Company.

Basic Information and Calculation of Expenses

UAE offshores share the same principle: they carry out business outside the country. It should be noted that requirements related to offshore incorporation may differ depending on a particular emirate. For example, most entrepreneurs choose Ras Al Khaimah (RAK) because registration fees are much lower and there is no need for actual presence of the shareholders. Mainland companies require local shareholding.

UAE offshores are exempted from any taxes; however, there are some duties and fees imposed on alcohol products. Mainland companies are levied on oil and gas operations. Owning an interest in real estate except for designated areas, insurance, banking operations and financial services (including consulting) are prohibited for offshore entities. A number of activities are subject to license (commercial, industrial, trade). No minimum share capital is required.

The registration fees in RAK are from 3,200 USD for full package including full set of documents and annual registered agent (1,200 USD per year). The annual renewal fee is 2,300 USD. Jebel Ali jurisdiction is more expensive and starts from 5,000 USD. Nominee services are 950 USD per year.

Please note that if you want to open a bank account in the Emirates (900 USD) the personal attendance is necessary in case of nominees. Bank accounts in Latvia or Cyprus are cheaper (350 to 500 USD).

Setup Procedure

The procedure takes 3-4 business days and may be initiated by individuals or legal entities. Entrepreneurs usually address offshore business consultants for registration process. It consists of the following steps:

  • Selecting a corporate name for a new company.
  • Considering initial corporate matters: electing directors, shareholders, share capital, class of shares, etc.
  • Preparation of the required documents (registration forms) and payment of fees.
  • Submission of the documents to the Registrar; issuance of the certificate by the Registrar.
  • Notary certification and translation of the documents if needed.
  • Delivery of the documents to the client.

Taxation in the Emirates

The Emirates have zero percent tax rates. Moreover, the country entered into double tax treaties with more than 40 countries, and it definitely helps to optimize companies’ tax obligations.

Accounting

In accordance with the federal legislation companies keep their financial records, however, the exact procedure is not specified. Note that if you register a company in Dubai it will be subject to audit.

Advantages of Offshore Companies in the Emirates

  • Exemption from any taxes.
  • Full confidentiality, discretion and protection of information.
  • Foreign citizens are entitled to 100% ownership in a company and may choose from civil or common law for conducting their business (Sharia laws are only applicable to UAE shareholders).
  • Corporate account with UAE banks.
  • Annual report is not submitted to the authorities.
  • Only one director is required (except for Jabel Ali companies where the minimum number is two).
  • More than 40 double tax treaties.
  • Great trade opportunities.
  • The Emirates are on the white list of reputable international banks and OECD.
  • Cost efficiency and minimum operational costs in comparison to mainland and free zone companies.