Which Offshore Jurisdiction to Choose in the UAE?

In this article, we will discuss the offshore jurisdictions available in the UAE, their respective benefits and disadvantages, and our preferred jurisdiction for your proposed offshore business setup in Dubai and UAE.

What is an Offshore Company?

Also known as an International Business Company (IBC), offshore companies are companies registered in one jurisdiction, but that which are generally exempted from taxation in the same country. Offshore companies do not generally conduct any business within the country of incorporation.

A UAE-based offshore company is not allowed to undertake any business activities inside the UAE. The entity cannot import and or export into the local market, it is not allowed to rent or lease physical premises, nor does it have any residence visa allowances.

All of the above limitations make an offshore company uniquely different from the other type of companies in the UAE, onshore businesses like free zone companies (with 100% foreign ownership), or mainland companies (with mandatory local Emirati national participation).

Onshore companies can engage in business activities within the UAE, rent or lease office premises, and sponsor residence visas for their investors and employees.

What Offshore Jurisdictions are available in the UAE?

There are three main offshore jurisdictions in the UAE.

1. Jebel Ali Free Zone Authority Offshore (JAFZA Offshore)

Located within Jebel Ali Free Zone (JAFZA), a major commercial and logistic free zone hub in Dubai, JAFZA Offshore used to be uniquely placed as the only option for investors to setup their 100% foreign owned offshore holding company and hold real estate assets in Dubai.

However, this advantage was overtaken by another offshore jurisdiction since 2019, as you will read here and below.

The incorporation and maintenance of a JAFZA Offshore company is also the costliest compared to the two remaining alternatives.

2. Ajman Offshore

Similar to JAFZA Offshore, Ajman Offshore is also part of an existing free zone, Ajman Free Zone, one of the major free zones based in Ajman.

The expenses related to the setup of an offshore company in Ajman Offshore are lower than that of a JAFZA Offshore company, and its quick turnaround time for incorporating a proposed company is also attractive to prospective clients.

However, the offshore registrar’s legal framework to safeguard the interests of clients leaves much room for improvements; and its provision of corporate documents are not in line with international best practices.

This leaves an Ajman Offshore company in a peculiar spot of being potentially suitable for clients and yet not ideal for other investors, which leads us to our third and most preferred jurisdiction.

3. Ras Al Khaimah International Corporate Centre (RAK ICC)

Formed after a consolidation between two competing registrars, RAK ICC is one of UAE’s best offering for an offshore company jurisdiction.

RAK ICC does not form part of any existing free zone, but maintains a strategic cooperation agreement with a neighboring free zone, Ras Al Khaimah Economic Zone (RAKEZ).

Thanks to its modern regulations, streamlined legal framework and provision of company documentation in line with global standards, RAK ICC is our registrar and jurisdiction of choice for clients looking to setup a cost-effective offshore entity within the UAE.

RAK ICC companies enjoy,

• Lowest costs for UAE-based offshore companies

• Remote incorporation procedures

• Wide variety of available business activities per ISIC standards

• Ability to own freehold real estate properties in Dubai and other emirates

• Registered Offices addresses available in Dubai

• A proactive registrar attuned to global regulatory environment changes

• Non-excessive regulatory and compliance burden

• Streamlined approach to company incorporation and renewal procedures

• Availability of non-traditional offshore company solutions such as Trusts, Foundations, Segregated Portfolio Company, Premium Product

With its clear regulations and procedures, safeguards to protect investors’ interests, and increasing registrar-led innovative solutions, RAK ICC is INCORPORTAS’ go-to jurisdiction for our clients.

Here at INCORPORTAS, we can assist with the proposed incorporation of all three offshore jurisdictions, however, you may already know our top choice to recommend and advise clients.

Contact us today if you would like to find out more about setting up your proposed offshore company in the UAE.

You might also be interested in the difference between an onshore and offshore company in the UAE.

If a proposed offshore company does not seem like the best option for you, you can discover more about onshore free zone companies in the UAE.

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