Business in the UAE: Entrepreneurship and offshore activities

Many modern entrepreneurs are wondering whether to open a business in the UAE or to relocate it. Experts in the economic sector believe that such a decision is strategically correct, as the Emirates are a promising and stable platform for the development of entrepreneurial activity. The high level of security, service and infrastructure of this destination annually attracts thousands of businessmen from all over the world.

Why open a business in the UAE?

In the world competitiveness rating, the Arab Emirates consistently occupy leading positions.

Among the main reasons why this country is preferred by businessmen:

1. global primacy in the field of technology and development;
2. economically favorable geographical location;
3. well-established and optimized logistics;
4. minimization of the tax burden (only some internal transactions of companies are taxed);
5. simplified reporting system; stability of world currencies.

Thanks to the government's loyal attitude to business and focus on development in the long term, foreign businessmen can:

• Open a business in a short period of time;
• Obtain a residency certificate;
• Interact with developed world markets. 

An important condition in this case is compliance with the established rules of a serious legislative system and an impeccable business reputation of the company. Therefore, at the very beginning of the journey, businessmen are better to enlist the support of experienced professionals in this area, which will help to avoid illiterate steps.

Options for starting a business and their features

Initially it is worth determining the type of business registration. Local placement or a choice in favor of registration in a free economic zone, or FEZ, have both advantages and difficulties.

The first option attracts by the simplicity of opening a bank account in the UAE and work visas for any number of employees. The personal presence of the entrepreneur in the country is required to resolve all the organizational nuances and directly open the office. Medical insurance for all employees will also be required.

Accelerated and less expensive is the opening of a business in a FEZ.

In this case, the entrepreneur can:

• conduct international trade;
• use all the possibilities of the logistics infrastructure;
• minimize the tax burden.

The difficulties of this type include limits on the number of working visas, long procedure of opening bank accounts and peculiarities of reporting. This option is not suitable for all lines of business.

Analyzing international statistics, we can conclude that over the past 10 years, the UAE has shown excellent results of development in various areas of the economy.

UAE. How offshore business works

” Contrary to popular belief that the UAE is a continuous offshore haven, this is incorrect. The bulk of companies registered and operating in the country are resident firms doing business or offering services in the UAE.

Offshore and Free Trade Zone (Free Trade Zone) are two different concepts, which theoretically can be related to economic and financial operations, but have different purposes and mechanisms of operation.

Offshore business is a type of activity in which a company chooses to register in a country with lower tax rates than in the country where the owner is actually located. Offshore companies are used for asset protection, tax optimization and privacy. Offshore companies can be either physical territories or legal structures.

A Free Trade Zone is an area where firms can import, export and manufacture products without paying customs duties and tax obligations.

Offshore in the Emirates is a legal entity, registration of which is handled by one of the authorized state bodies of the Emirates. UAE. The firm will not be able to conduct commercial and business activities in the UAE, cooperate with legal entities registered here.

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

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

Opening an offshore company in the Emirates - the benefits

” UAE is included in the list of countries where you can successfully conduct business and easily enter the international arena. The main advantages of registering an offshore company here:

1. The opportunity to be the owner of a company with an impeccable reputation in the business environment. The Emirate offshore industry does not appear in various blacklists, is not involved in major scandals.
2. The political pattern of the UAE is stable, there has long been no discontent or mass protests.
3. A chance to get a profitable and legitimate business, because here are extremely intolerant of even the slightest violations of the law.
4. A businessman can choose one of the most convenient free-zones. Each of them is characterized by its focus, current conditions and the cost of offshore registration.
5. Absence of corruption and bureaucracy, maximally simplified procedure of offshore registration.
6. Offshore firms are not subject to income tax and are exempt from a number of other obligations.

What is allowed and what is not allowed for offshore companies in the UAE

Before moving your business to the UAE, you should know all the conditions, rights and obligations. It is important to understand what is allowed offshore in the UAE and what is prohibited.

It is allowed to:

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

Categorically no:

• rent office space in the UAE;
• engage in business activities and receive remittances from legal entities that are 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, the business owner will be able to understand whether he needs to work in this direction.

How to open an offshore account in a UAE bank?

” You can register a current account on your own or use the help of an intermediary. If you provide a full package of documents, you usually need to wait 2-3 days for the result.

Features:

• The questionnaire should be filled out in English, where you should indicate your sources of income. Some information may require verification, especially if it is about companies that are not registered in the UAE.
• The presence of the owner is mandatory during the execution of documents.
• All documentation is in English, it is important that forms and documents are filled out without errors.

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

If you need help to open an offshore company in the UAE, the specialists of the licensed agency GARANT.in are happy 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 selection of free-zone to registration and opening a bank account. We are always in touch with our clients, will answer any questions and provide quick assistance in case of unforeseen situations.