An offshore business setup which is also sometimes known as a non-resident company, is established in a jurisdiction which has favorable tax regulations and minimal reporting requirements. An offshore company is often used for specific purposes such as asset protection, tax optimization and facilitating international trade. Setting up an offshore business in Dubai provides a profitable environment for international investors as an offshore business setup in Dubai benefits from tax exemptions, full ownership and confidentiality. The foreign directors of an offshore company in Dubai enjoy full ownership of the company. The absence of any currency restrictions in Dubai facilitates seamless financial transactions and there are no restrictions on the company whatsoever of any kind on hiring expatriate staff. An offshore company in Dubai is typically used for holding assets, estate planning and for international trading, however it is  restricted from conducting business within UAE and must operate exclusively from outside the country. In Dubai, Jebel Ali Free Zone Authority (JAFZA) and Ras Al Khaimah Economic Zone (RAKEZ) are known for their offshore company registration services.

Why Dubai for Offshore Business Setup?

Dubai offers several compelling reasons for establishing an offshore business setup, some of them are as follows:

  1. Strategic Location: Situated at the crossroads of Europe, Asia and Africa, Dubai serves as a gateway to a huge market of over 2 billion people within an eight-hour flight radius.
  2. Tax Efficiency: Offshore companies in Dubai benefit from zero corporate and income taxes and this makes Dubai an attractive destination for businesses looking to minimize tax liabilities legally.
  3. Confidentiality:The UAE maintains strict confidentiality laws to ensure the privacy of business owners and shareholders which helps in enhancing asset protection.
  4. Stable Economy and Infrastructure: Dubai has a flourishing and robust economy supported by world-class infrastructure, advanced telecommunications and modern banking facilities all of which provide a conducive environment for business operations.
  5. Access to Double Taxation Treaties: The UAE has signed double taxation avoidance agreements (DTAs) with over 90 countries and this helps business setups in Dubai get additional benefits in international trade and investment.

Types of Offshore Business Setups in Dubai

In Dubai, Jebel Ali Free Zone Authority (JAFZA) and the Ras Al Khaimah Economic Zone (RAKEZ) are the primary hubs of offshore business setup, each offering distinct advantages to businesses:
  1. Jebel Ali Free Zone (JAFZA): Established in 1985, JAFZA is one of the oldest and most prestigious free zones in the UAE. It provides a range of business activities including trading, services and industrial operations. Business setups registered in JAFZA benefit from 100% foreign ownership, full repatriation of profits and exemption from import and export duties.
  2. Ras Al Khaimah Economic Zone (RAKEZ): Located in the emirate of Ras Al Khaimah, RAKEZ offers cost-effective solutions for entrepreneurs and SMEs. It provides flexible business setup options, modern infrastructure and access to key markets across the Middle East and beyond.

Steps to Establish an Offshore Company in Dubai:

Setting up an offshore company in Dubai involves several key steps such as the following:

  1. Choose a Business Consultant: It is always advisable to get a reputable business consultant like ‘GrowBiz’or registered agent in Dubai to help an entrepreneur or business to seamlessly navigate the legal and procedural requirements.
  2. Select a Jurisdiction: It is very important for an entrepreneur to decide in which zone to establish the company(JAFZA or RAKEZ) based on the business objectives, budget and operational requirements.
  3. Documentation: All the necessary documents like passport copies of shareholders and directors, proof of address and a business plan outlining the company’s activities should be kept handy.
  4. Company Name and Structure: A business should choose a unique company name and determine the corporate structure e.g. limited liability company, branch office etc.
  5. Submit Application: Complete and submit the registration application along  with all the required documents to the relevant authority.
  6. Obtain Licenses and Permits: Depending on the business activities,  an entrepreneur should apply for any necessary licenses or permits from  regulatory authorities in Dubai.
  7. Bank Account Opening: The business setup should open a corporate bank account in Dubai in it’s name to facilitate business transactions and financial operations.

Legal Considerations:

When establishing an offshore company in Dubai, it is important for all business setups to adhere to local laws and regulations:
  1. Compliance: It is important to ensure compliance at all times with UAE laws regarding company registration, licensing, taxation and employment.
  2. Corporate Governance: A business setup should maintain proper corporate governance practices and financial records as per regulatory requirements.
  3. Intellectual Property Protection: Every business setup should safeguard it’s intellectual property rights by registering trademarks, patents and copyrights with the relevant authorities in Dubai.
  4. Taxation: Although offshore companies in Dubai enjoy tax exemptions, it is advisable to consult with tax advisors to understand any applicable taxes in the home country to ensure compliance with international tax laws.

FAQs:

An offshore company in Dubai is a business setup established in a free zone or a designated offshore area which is designed primarily for conducting business outside the UAE.
  • Zero corporate and income taxes.
  • Offshore companies offer strict privacy protections.
  • Ideal for holding assets and investments.
  • Fewer bureaucratic hurdles compared to mainland businesses.
  • Easier international business operations.
Offshore companies can be set up by non-residents, individuals or corporate businesses.
  • Minimum one director and shareholder (can be the same person/entity).
  • A registered agent is required for incorporation and ongoing compliance.
  • Legal documents like passport copies, proof of address and corporate documents.
  • Office space is not mandatory but a registered office address may  be required.
  • Bank account is often mandatory and is needed for transactions.
Yes, offshore companies are typically restricted from conducting business within the UAE.