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Business Setup (Offshore Jurisdictions)

About doing business in Dubai

An offshore company is a company incorporated in a country where there is little government control and / or low tax rates”. Offshore business setup / registration provides an additional layer of legal protection by removing your name from your assets. A business setup in an offshore jurisdiction does not allow you to conduct substantial business in its country of incorporation & is formulated in a law of no taxation for the purpose of legally minimizing any type of tax payment.


Business registered as an offshore company is allowed to carry on any business activity except certain businesses like Banking & Insurance, which are internationally regulated. An offshore company allows 100% ownership and is commonly used for structuring of international business & tax planning. Utilizing the company registered in an offshore entity to conduct your business, bank transactions and / or personal financial investments provides additional privacy & anonymity.


A few major jurisdictions for setting up offshore companies are:

  • British Virgin Island (BVI)
  • Cayman Island
  • Belize
  • JAFZA Offshore
  • RAK Offshore
  • Panama Offshore
  • Seychelles etc.…


The main benefits for an offshore company are:

  • Anonymity
  • Minimized taxation
  • Legal asset protection
  • Simplify Personal Wealth Management
  • Simplicity in operations and Reporting
  • Cost of Operation
  • Personal Tax Reduction
  • Protect Investments
  • Maximize Profit, Minimize Taz


These advantages coupled with tax minimization makes the option to register an offshore company more attractive to international traders & Consultants.




Free Zone entity

The major attraction of setting up business in Free Zones is the 100% ownership allowed to foreign investors. The incentives for a Free Zone entity are

  • 100% foreign ownership
  • Exemption from tax on corporate gains or personal incomes
  • Exemption from tax on corporate gains or personal incomes
  • No currency restrictions

A business may be set up either as

Main Land

The term 'Main Land' is used to represent the geographical area in the land of UAE that are subject to the laws and regulations of UAE unlike the Free Zone areas which are governed by separate laws and insulated mostly from the laws of main land.


The term 'Main Land' is used to represent the geographical area in the land of UAE that are subject to the laws and regulations of UAE unlike the Free Zone areas which are governed by separate laws and insulated mostly from the laws of main land.


The registration of business in main land is opted for when a substantial volume of business is expected inside UAE or when the intention is to explore the UAE business market. The incentives are


  • License to have business dealings all over UAE
  • Exemption from tax on corporate gains or personal incomes

The business may be set up in main land either as

  • Individual Establishment (with just one shareholder / owner)
  • Individual Establishment (with just one shareholder / owner)
  • Branch / Representative Office of Foreign Company or UAE company

Free Zone entity

An Offshore Company is one that does not conduct substantial business in its country of incorporation and is formulated in a law of no tax jurisdiction for the purpose of legally minimizing any type of tax payment. An offshore company can eliminate or minimize many type of tax payments such as capital gains, VAT, profits on business earning and property sales. An offshore company has non-resident status and cannot occupy an office space in its name in the UAE. Both individuals and corporate bodies can hold the ownership in an offshore company. The most common reasons for opening offshore companies are


  • Tax minimization
  • Ease of international operations
  • Asset protection
  • Investment diversification
  • Placement of funds in accounts out of the home country

Geography

The United Arab Emirates is bordered by the Arab Gulf from the North, Gulf of Oman and the Sultanate of Oman from the East, the Kingdom of Saudi Arabia and the Sultanate of Oman from the South, and the State of Qatar and the Kingdom of Saudi Arabia from the West. The country is located between 22-26.5 N latitude, and 51-56.51 E longitude.


The United Arab Emirates has a 644 kilometre long coast at the southern Arab Gulf, where the Emirates of Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain and Ras Al Khaimah are located, while the 90 kilometre long coast of the Emirate of Fujairah is located at the Gulf of Oman.


The area of the country is 83,600 square Kilometres, with the desert dominating most of this area with many popular oases. Most of the country's coast is dominated by sand except for the northern area at Ras Al Khaimah, which constitutes the Hajer mountain cape.


The country has hundreds of islands within the Gulf, of which 200 are in the Emirate of Abu Dhabi, importantly Sir BaniYas that has evolved into an oasis and a conservation area for rare birds and animals. Other important islands include Das island, Abu Al Abyadh island, Abu Mousa island and Sir Bu Nair at Sharjah, Greater Tunb, Lesser Tunb and Al Hamra at Ras Al Khaimah, and Al Jazira Al Syniyah at Umm Al Quwain.


Governance

Since its establishment, the UAE adopted the Constitution, which declares the main purpose of establishment of the federation, its objectives and components on the local and regional levels. It enumerates public rights, responsibilities and freedoms.


The Constitution of the UAE also deals with financial affairs of the federation, armed and security forces provisions, and legislative, executive and international jurisdictions between the federation and member emirates.


The UAE's Constitution allows certain flexibility in the distribution of authority between the Federal and Local Governments. This allows the seven emirates to incorporate in their own local government, matters not included in the Constitution.


Each of the seven emirates has its own local government, the complexity of which differs according to the size and population of individual emirates. Each follows a general pattern of municipalities and departments. This relationship is evolving over time, dictated by administrative requirements.


The federal system of government includes:
  • The President
  • The Prime Minister
  • The Supreme Council
  • Crown Princes and Deputy Rulers
  • The Federal National Council
  • The Council of Ministers or The Cabinet

History

The United Arab Emirates has a rich history dating back to thousands of years. So, the country is concerned with preserving and documenting such heritage for the next generations.


Archeological excavations and antiques found in many areas of the country have proved that a great civilization used to be prosperous in the area known today as the United Arab Emirates. The civilization dates back to 4000 BC, and was connected to the neighbouring civilizations. Pieces of coloured pottery that have been uncovered were imported from Mesopotamia. They date back to 3000 BC, which indicate the links between these areas and the people of South Iraq.


Various stone tools, sharp sword blades and metal sheets were found. Excavations show forts at Hilly site, Bidya, Tell Abraq and Kalbaa that date back 2500-2000 B.C. Recent discoveries show a square citadel with square towers at its corners, in addition to an external wall of 55m long, and a stone mould to make metal coins inside the citadel.


With the coming of Islam, a new phase of the country's history had begun, as Islam reached this country thanks to the Arab leader Amr bin Al-As. The Gulf area under the rule of Islam witnessed a prosperous period, and the Gulf became an international hub of marine trade and navigation during the Umayyad age when the vessel industry prospered.


An archeological site at Jumeirah area in Dubai has been identified as the remainder of an Islamic city of the Umayyad age, which was controlling the trade routes at that time. One of the known Islamic cities is Julphar north of the city of Ras Al Khaimah, where houses were found and four mosques dating back to the Hijri fourth century.


Doing Business in UAE

The UAE has a vibrant 'free economy', a significant portion of its revenues arising from the exports of oil and gas. Successful efforts have been made to diversify away from dependence on hydrocarbons, and a solid industrial base has been created, together with a strong services sector. The incentives of doing business in the UAE include its tax efficient policies providing tax exemption on corporate gains and personal incomes. The UAE's strategic location between Asia, Europe and Africa is a major advantage to investors, particular the country's proximity to some of the world's fastest growing economies in Asia.


Limited Liability Company

Limited Liability Company or LLC is a legal business entity in which the liability of the shareholders is limited to the amount of paid up capital and may be set up either as

  • A Free Zone Company (with 2 to 5 shareholders)
  • A Main Land company (with 2 to 50 shareholders) or
  • An offshore company

Sole Proprietorship / Individual Establishment

A sole proprietorship or individual establishment is a legal business entity owned by just one person and may be set up either in a

  • Free Zone
  • Main Land or
  • Offshore

Branch / Representative Office

A branch or representative office can be set up for both UAE companies and foreign companies in

  • Free Zone
  • Main Land or
  • Offshore

Popular Emirates for Business in Main Land




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