Who can create an offshore company in Dubai?
If you are looking to create an offshore company, Dubai is an excellent jurisdiction to consider. Not only is it advantageous to be located in such a prosperous and international city, but the jurisdiction is also very business-friendly.
There are two (2) main jurisdictions in the United Arab Emirates that offer the possibility of creating an offshore company:
There are several steps to follow to create an offshore company in Dubai, but the process is relatively simple and fast. Once you have established your company, you can enjoy all the benefits associated with its status, including favorable taxation.
What is an offshore company?
In the United Arab Emirates, it refers to a legal entity registered in a country other than the country of its shareholder's origin. Such companies are referred to as non-resident companies.
In general, businesses choose to establish an offshore company to benefit from all the tax advantages offered by the jurisdiction, such as lower tax rates and more flexible financial regulations. However, creating this type of company also carries a number of risks, such as increased exposure to fraud and money laundering.
How does an offshore company work?
Generally speaking, it is a company registered in a country other than the one in which it conducts its activities. The most common reasons are to reduce taxes or benefit from lax financial regulations. The United Arab Emirates are highly sought after for the establishment of offshore companies because taxes are low and financial regulations are limited.
This type of company must comply with the laws of the country in which it is registered and the country in which it conducts its activities. This can sometimes be complicated, which is why many entrepreneurs seek help from experts to navigate the legal landscape.
In general, an offshore company must pay taxes in the country where it conducts its activities. However, there are ways to structure the company to minimize or eliminate this tax obligation. This is often done by creating subsidiaries in different countries and taking advantage of tax treaties between countries.
What formalities must be completed to create an offshore company in the United Arab Emirates?
If you wish to create an offshore company in Dubai, you must complete a few formalities. First, you must create the company itself. This can be done online through various incorporation services. Once the company has been created, you must open a bank account in its name. You can do this with any Dubai bank that offers accounts for offshore companies. Finally, you will need to obtain a license from the Dubai Department of Economic Development. This will allow you to operate your business in Dubai.
Create your offshore company in the Emirates
An offshore company can conduct many types of activities. There are activities for which this status is recommended because they do not require a physical presence. The three (3) most common activities are:
The most important point to note is that an offshore company cannot conduct any commercial activity within the United Arab Emirates. All commercial activities must be conducted exclusively abroad. It is therefore not possible to have customers or suppliers in the Emirates.
Shareholders of an offshore company also cannot obtain a UAE residence visa because, by definition, an offshore company is a non-resident company.
However, although it is difficult, this type of company may open a bank account in the Emirates.
Why create an offshore company in Dubai: advantages and disadvantages
There are many advantages to creating this type of company in Dubai, but there are also disadvantages when you choose to establish an offshore company.
Advantages
- Ability to conduct activities anywhere in the world (outside the UAE)
- Opening of a bank account in the United Arab Emirates
- Ability to issue invoices and receive payments
- Possibility of purchasing real estate through your company
Disadvantages
- It is not possible to conduct commercial activities in the United Arab Emirates
- It will not be possible to have suppliers in the United Arab Emirates
- Your company's status does not make you eligible for residency
- You will not be able to rent physical offices
- You will not be able to hire employees
Benefit from our firm's support in creating your company in the Emirates
Our firm is the leading French-speaking firm and specialist in company formation in Dubai. Whether you are establishing a free zone company or creating your offshore company, our experts will support you from A to Z.
For more information, contact us.
