UAE: How Offshore Business Works

Contrary to the common belief that the UAE is a continuous offshore haven, this is incorrect. The majority of companies registered and operating in the country are resident firms engaged in commercial activities or offering services in the UAE.

Offshore and Free Trade Zone are two different concepts, theoretically related to economic and financial operations but with different purposes and mechanisms.

Offshore business is a type of activity where a company chooses registration in a country with lower tax rates than where the owner is located. Offshore companies are used for asset protection, tax optimization, and confidentiality. Offshores can be both physical territories and legal structures.

A Free Trade Zone is an area where firms have access to import, export, and production of goods without paying customs duties and tax obligations.

An offshore in the Emirates is a legal entity, the registration of which is handled by one of the authorized government agencies of the Emirates. The firm cannot engage in commercial and economic activities in the UAE or collaborate with legal entities registered there.

To register an offshore company, one can use one of the Emirates' free zones:

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

Opening an offshore company in the Emirates - advantages

The UAE is among the countries where one can successfully conduct business and easily enter the international arena. The main advantages of registering an offshore here are:

• The opportunity to own a company with an impeccable reputation in the business environment. The offshore industry in the Emirates is not on various blacklists and is not involved in major scandals.
• The political environment in the UAE is stable, and there have been no signs of dissatisfaction or mass protests for a long time.
• The chance to acquire a profitable and legal business, as even the slightest violations of the law are extremely intolerable here.
• A businessman can choose one of the most convenient free zones. Each of them has its focus, operating conditions, and offshore registration costs.
• The absence of corruption and bureaucracy streamlined the offshore registration process.
• Offshore companies are not subject to corporate income tax and are exempt from a range of other obligations.

What offshore companies in the UAE are allowed and not allowed to do

Before transferring a business to the UAE, one should know all the conditions, rights, and obligations. It is important to understand what is allowed and what is prohibited for offshore companies in the UAE.

Allowed:

• conduct international trade activities, provide consulting services;
• act as a holding company;
• conduct primary activities abroad;
• purchase and own real estate properties in projects approved by RAK ICC, Jebel Ali Free Zone, and Ajman Free Zone administrations;
• open accounts in banks, deposit funds in UAE banks or abroad;
• be a founder of other legal entities (both in the UAE and abroad).

Prohibited:

• rent an office space in the UAE;
• engage in commercial activities and receive money transfers from legal entities not registered in the Emirates;
• obtain a resident visa;
• conduct insurance or financial activities without obtaining a special license.

Knowing all the pros and cons of registering an offshore company, a business owner can understand whether it is necessary to work in this direction.

How to open an offshore account in a UAE bank?

You can arrange a current account yourself or use the services of an intermediary. With the provision of a complete set of documents, the result usually takes 2-3 days.

Features:

• The form must be filled out in English, indicating your sources of income.
• Some information may require verification, especially if it concerns companies not registered in the UAE.
• When applying for documents, the owner's presence is obligatory.
  All documentation is in English; the forms and documents must be filled out without errors.

Opening an account in a UAE bank is an opportunity to protect yourself and your company from financial crises, and economic, and political instability in your own country.

If you need assistance in opening an offshore company in the UAE, the specialists of the licensed agency GARANT IN are ready to provide all kinds of professional services.

Our office is located in Dubai, so all communication and work can be done directly in the UAE. We will help at any stage: from choosing a free zone to registration and opening a bank account. We are always in touch with clients, answer any questions, and provide quick assistance in case of unforeseen situations.