Offshore Company Formation in Dubai
Updated on Thursday 07th November 2024
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BridgeWest offers full offshore company formation in Dubai. Investors can rely on our team for other services suitable for companies, such as: opening representative offices, establishing branches or subsidiaries, starting an NGO. We also provide accounting services or legal consultancy, tax planning and tax minimization strategy. We offer the same types of services for onshore incorporation.
Onshore incorporation
Dubai is considered a tax haven by a lot of foreign investors, especially by the ones willing to open offshore companies in its free zones.
The main advantages of opening an offshore company in Dubai free zones are the following:
Also, it’s not necessary to submit the company’s account. These accounts are only presented to the shareholders.
An offshore company is a type of company opened in Dubai by foreign entrepreneurs, with most of its business carried outside the country where it is incorporated. There are two offshore authorities in Dubai located in Ras Al Khaimah and in Jebel Ali Free Zone. The regulations for opening offshore companies are slightly different but not significantly.
In order to incorporate an offshore company in Dubai, the following easy steps must be concluded. The name of an offshore company has to be chosen and reserved. This name cannot contain the words: Insurance, Re-insurance or Banking in their composition. Any name of the offshore company must contain the termination ‘’Ltd.” or “Limited”.
Then, investors must submit the company registration application to the Department of Economic Development (DED), and register documents and information at the Registrar, such as:
After the registration, the company receives a certificate of registration and an identification number. Also, in the UAE, licenses are needed for performing commercial activities. There are three types of licenses: commercial, professional or industrial, obtained from the Department of Economic Development.
A bank account needs to be opened after receiving the certificate of registration. There is no minimum share capital requested at registration in the free zone, the company can choose its own authorized capital.
For companies opened in the Ras Al Khaimah, a minimum share capital of AED 1,000 (around EUR 270) is requested. An offshore company can be incorporated in Dubai in approximately 1 week.
An offshore company in Dubai can be formed by at least one shareholder and can have maximum 50 members. This type of company must be managed by at least two directors and a secretary.
Their names are kept in the register of directors from the Dubai Registration Office, but their details are not available for the public. It’s not mandatory for the general meetings of the offshore company to take place in Dubai. As a rule, any offshore company must have a local registered agent, approved by the Dubai Registration Office and the local authorities.
Our consultants can assist in drafting the Articles of Association (necessary for company incorporation in Dubai). The Articles of Association of the Dubai company can be signed through Power of Attorney.
Onshore incorporation
Onshore incorporation refers to the set up of a legal entity in Dubai, which is established for the purpose of carrying out business activities in Dubai, with Dubai residents (individuals and companies). Our services cover the registration process, the selection of a legal entity, tax registration, finding a suitable office and many others.
Dubai is considered a tax haven by a lot of foreign investors, especially by the ones willing to open offshore companies in its free zones.
The main advantages of opening an offshore company in Dubai free zones are the following:
- there are no taxes on personal/corporate income and the VAT is charged at a rate of only 5% (exemptions are granted for oil producers, education or health providers);
- anonymity and privacy protection are guaranteed;
- there is no obligation to deposit the capital in a bank;
- foreign ownership is allowed 100%;
- there is no minimum share capital requested in the free zones and just a small amount of money when investing in the Ras Al Khaimah.
Also, it’s not necessary to submit the company’s account. These accounts are only presented to the shareholders.
Steps for company formation in Dubai
An offshore company is a type of company opened in Dubai by foreign entrepreneurs, with most of its business carried outside the country where it is incorporated. There are two offshore authorities in Dubai located in Ras Al Khaimah and in Jebel Ali Free Zone. The regulations for opening offshore companies are slightly different but not significantly.
In order to incorporate an offshore company in Dubai, the following easy steps must be concluded. The name of an offshore company has to be chosen and reserved. This name cannot contain the words: Insurance, Re-insurance or Banking in their composition. Any name of the offshore company must contain the termination ‘’Ltd.” or “Limited”.
Then, investors must submit the company registration application to the Department of Economic Development (DED), and register documents and information at the Registrar, such as:
- the name and address of the offshore company;
- the type of business;
- the name and address of the founders;
- the amount of share capital;
- the articles of association;
- any other document the Registrar may ask.
After the registration, the company receives a certificate of registration and an identification number. Also, in the UAE, licenses are needed for performing commercial activities. There are three types of licenses: commercial, professional or industrial, obtained from the Department of Economic Development.
A bank account needs to be opened after receiving the certificate of registration. There is no minimum share capital requested at registration in the free zone, the company can choose its own authorized capital.
For companies opened in the Ras Al Khaimah, a minimum share capital of AED 1,000 (around EUR 270) is requested. An offshore company can be incorporated in Dubai in approximately 1 week.
Requirements for offshore company formation in Dubai
An offshore company in Dubai can be formed by at least one shareholder and can have maximum 50 members. This type of company must be managed by at least two directors and a secretary.
Their names are kept in the register of directors from the Dubai Registration Office, but their details are not available for the public. It’s not mandatory for the general meetings of the offshore company to take place in Dubai. As a rule, any offshore company must have a local registered agent, approved by the Dubai Registration Office and the local authorities.
Services provided for Dubai company incorporation
Our consultants can assist in drafting the Articles of Association (necessary for company incorporation in Dubai). The Articles of Association of the Dubai company can be signed through Power of Attorney.
Investors can rely on us for drafting all other documents required for the incorporation of the Dubai company. These documents include: specimen signatures, special forms provided by the Company Registration Office in Dubai, passport copies etc.
We can also assist in offering a local registered agent and in setting up a bank account for your Dubai company.
Why open a company in the JAFZA free zone?
One of the ways to invest in Dubai is by setting up a company in the JAFZA free zone. JAFZA is the acronym for Jebel Ali Free Zone, where investors can benefit from the following advantages:
- investors can initiate the procedure for offshore incorporation in this free zone, as per the rules of the JAFZA Offshore Company Regulations 2003;
- a company can be set up by 1 shareholder;
- the company must have 2 directors and 1 secretary (one of the directors can act as a company secretary as well);
- the legal entity can be established with 100% foreign ownership;
- it is also necessary to keep the company’s accounts for a period of 10 years.
Similar conditions for the registration of a company are available in other Dubai free zones, but there are small differences.
Important aspects for offshore company setup in Dubai
The process of offshore company formation in Dubai can be completed in approximately 1 week. However, the registration procedures in its free zones may vary greatly, from 1 to 4 weeks, therefore it is advised to address our consultants to be sure on the required amount of time applicable in a free zone that you prefer.
In numerous countries, foreign investors do not have to personally arrive in the respective jurisdictions for the incorporation of a legal entity, as this can be done through legal representation. This rule is also available in Dubai and in most of its free zones, but an exemption from this rule is applied in JAFZA, where investors need to personally sign the incorporation documents.
A local company must also have a registered address in this country, as well as a local bank account (for this, investors can open an offshore bank account).
Dubai key facts
The law that governs the actions of an offshore company in Dubai is the Federal Law no 8 from 1984, amended by the Federal Law No 13 from 1988 (the Commercial Companies Law).
For an entrepreneur willing to live and work in Dubai it’s better to open a company, but for the investors who don’t want a permanent residence here, it’s preferably to open offshore companies.
The investors willing to open a limited liability company in Dubai must know that now they can set up a company with 100% foreign ownership, unlike in the past, when it was required to have 51% of the shareholders UAE citizens.
This is now possible as per the latest governmental amendments, regulated under the Federal Decree-Law No. 26 of 2020 (information presented by the Official Portal of the UAE Government).
Another reason to invest here is that the limited liability company in Dubai no longer requires a minimum share capital, according to the Ministry of Economy (in the past, the capital was AED 300,000). The free zones of Dubai are different zones where taxes or restrictions on commercial activities are not applied.
The most well-known free zones are: Jebel Ali Free Zone, Dubai Silicon Oasis, Dubai Airport Free Zone, Dubai Aid and Humanitarian City, Dubai Internet City and Dubai Media City. UAE has signed double tax treaties with 143 countries.
As a particularity, UAE hasn’t signed any exchange of information treaties, but it signed 112 encouragement and protection of investment agreements.
In Dubai, there are not many personal taxes, for example there is only a 5% tax on entertainment and hotel services and a 5% residential tax. The investors are also attracted by the advantageous tax system and the cheap workforce.
Bridgewest provides company incorporation services in Dubai. Please contact us for more information and prices. If you need legal services in Dubai, you may talk to our local lawyers.