Opening an offshore company offers several advantages for business leaders, including the possibility of benefiting from certain tax exemptions depending on the jurisdiction chosen.
But the term “offshore” is often associated with tax havens, money laundering, tax evasion, or tax fraud. One essential point must therefore be emphasized: an offshore company can be entirely legal, provided that it complies with the rules in force.
Is setting up an offshore company legal?
A structure that can be perfectly legal
An offshore company can be used legally when its establishment and operation comply with the applicable regulations.
An often negative reputation
Some offshore arrangements have been associated with money laundering, tax fraud, and tax evasion, which explains the term “offshore”’s bad reputation.
Tax optimization ≠ tax fraud
The case of the United Arab Emirates
The United Arab Emirates is an attractive jurisdiction for foreign entrepreneurs, with a real and developed economy, unlike certain territories traditionally associated with tax havens.
Tax measures and free zones are specifically intended to attract foreign investment.
The points
Favorable tax treatment
The offshore framework notably includes no corporate tax, capital gains tax, or tax on profits, as well as no withholding tax on dividends.
Bank secrecy
Banking secrecy is highly important in the United Arab Emirates. If banking secrecy is breached, the bank may face severe legal penalties.
Reporting obligations
A French tax resident remains responsible for their filing obligations with the French tax authorities and must be able to prove the legality of their structure and accounts.
Be able to justify the legality
An important point concerns the need to retain the elements demonstrating that the offshore activity complies with the applicable rules.
Get assistance creating an offshore company within a legal framework
To avoid errors when preparing the application or operating the company, get support from a reputable and transparent firm.
Merritt assists entrepreneurs with setting up offshore companies in the United Arab Emirates and informs them about the system’s advantages, as well as their rights and obligations.