Dubai has carved a niche for itself as a global business hub, attracting entrepreneurs and companies from all corners of the world. An offshore company formation in Dubai would allow you to reap the benefits of being registered in the UAE while not having a physical office in the place. Whether you’re a seasoned entrepreneur or just starting your international journey, this blog will equip you with the knowledge to navigate the world of Dubai offshore companies.

What is an Offshore Company?

An offshore company is a business registered in a country other than where its owners or operators reside. In Dubai, these companies are registered in the UAE for tax benefits but are doing their business elsewhere. They enjoy advantages like 0% corporate and income tax, permission for full foreign ownership, and the ability to open international bank accounts. An offshore company set up in Dubai does not give you access to the local market but international trade is made easy with its prime location coupled with a supportive environment for business. 

Benefits of Offshore Company Formation in Dubai

  1. Tax Haven

The offshore jurisdictions of UAE are zero tax zones. There is no corporate tax or income tax on profits earned outside the UAE. 

  1. Enhanced Privacy

A Dubai offshore company registration lets you enjoy a higher degree of confidentiality compared to mainland or freezone businesses. Details about ownership are shielded from public view, and audits and publishing account statements are not mandatory.

  1. Bank Accounts

Offshore companies can establish multiple accounts with local and international banks operating within the country. This allows the company to conduct international transactions seamlessly, sending and receiving funds globally.

  1. Asset Protection

Offshore companies are distinct legal entities separate from the owners. This along with the anonymity of the owner and the limited liability protection ensures better safety of the assets.

  1. Hassle-free Administration

Due to the minimal reporting requirements, the ongoing burden of maintaining the business is significantly lighter compared to other company structures. There’s no need for a specific share capital amount, and documents don’t require attestation, keeping administration costs low.

Steps to Set up an Offshore Company in Dubai

Setting up offshore companies is typically faster and less complex compared to mainland and freezone companies. Here’s a breakdown of the common procedures involved:

  • Select an Offshore Jurisdiction

The first step is to select an offshore jurisdiction. In the UAE, Jebel Ali Free Zone (Jafza), Ras Al Khaimah International Corporate Centre (RAK ICC) and Ajman Free Zone are the jurisdictions available for offshore company formation.

  • Choose a Company Name

Next, choose an ideal name that aligns with your brand and conforms with the regulations in the UAE.

  • Prepare Relevant Documents

Prepare and gather the relevant documents required for registration like Memorandum and Articles of Association, passport copies and proof of residence.

  • Fill out an Application Form

Along with the required documents, submit a completed application to the relevant authority in the chosen jurisdiction.

  • Open a Bank Account

Following successful incorporation, your offshore company in Dubai will be eligible to open a dedicated onshore bank account. This account streamlines international business dealings by enabling you to receive and send funds globally.

Offshore Jurisdictions in the UAE

The three main offshore jurisdictions in the UAE are:

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

The Ras Al Khaimah International Corporate Centre is a prominent offshore jurisdiction located in the emirate of Ras Al Khaimah. It is perfect for budget-conscious businesses seeking a fast and efficient setup process. The advantages of this jurisdiction include:

  • Cost-effectiveness
  • 100% ownership
  • Exemption from corporate and personal income tax
  • No minimum share capital
  • Repatriation of profits
  • Fast and efficient set-up
  1. Jebel Ali Free Zone (Jafza)

Jebel Ali Free Zone is a well-established and popular choice for offshore company formation in Dubai. It is strategically located right next to Jebel Ali Port, which fosters a thriving environment for international businesses. 

Jebel Ali Offshore Company formation will let you benefit from the free zone’s special privileges, which can include tax exemptions and streamlined business processes. Its advantages are similar to that of RAK ICC:

  • 100% ownership
  • Exemption from corporate and personal income tax
  • Efficient set up
  • Excellent infrastructure
  • Local real estate ownership
  • Wide range of business activities
  1. Ajman Free Zone (AFZ)

Ajman Free Zone is another attractive option for offshore company formation in the UAE, offering a cost-effective and business-friendly environment. Some of its advantages are:

  • Economic option
  • Repatriation of Profits
  • 100% ownership
  • Exemption from corporate and personal income tax
  • No minimum share capital

Comparative Summary of AFZ, RAK ICC and JAFZA

AFZRAK ICCJAFZA
CostAjman Free Zone (AFZ) is more cost-efficient than JAFZA for businesses requiring a physical presence and UAE residency visas, especially for SMEs and startups. The lower setup and operational costs make AFZ attractive for small to medium-sized enterprises.RAK ICC is the most cost-efficient for businesses that do not require a physical presence in the UAE or UAE residency visas. It’s ideal for holding companies and international business without the need for local operations.JAFZA offers high prestige, excellent infrastructure, and extensive networking opportunities but at a higher cost. It’s suitable for larger businesses with significant operational needs and those benefiting from proximity to Jebel Ali Port.
Reputation• Cost-effective and ideal for SMEs and startups.
• Simplified business setup processes.
• Adequate infrastructure for various business needs.

• Strong reputation in offshore business and asset protection.
• Cost-effective for international operations without physical presence in the UAE.
• Efficient and quick incorporation processes.
• High prestige and global recognition.
• Extensive networking opportunities with leading international companies.
• Excellent infrastructure and strategic location.
LocationProvides an economical location for SMEs and startups. Proximity to Ajman Port supports import and export activities, but on a smaller scale compared to JAFZA.Location is less relevant for RAK ICC as it mainly serves international, non-resident companies.Ideal for businesses requiring extensive logistics, warehousing, and manufacturing facilities. The location supports a high volume of trade activities.

Why Cleritbiz for Your Offshore Business in Dubai

Offshore company formation in Dubai offers numerous benefits such as tax advantages, enhanced privacy, asset protection, and hassle-free administration. By choosing the right offshore jurisdiction in the UAE you can establish your business efficiently and enjoy the perks of operating in a global business hub like Dubai. Cleritbiz is an experienced business consultant who could help register your offshore company in Dubai in just 7 days. Book a free consultation now!

Frequently Asked Questions on Offshore Setup in Dubai

1. What are the main uses of an offshore company in Dubai?

Holding Company: For holding shares of other companies and investments.
Asset Protection: Protecting personal and corporate assets.
Tax Planning: Optimizing tax liabilities.
International Trading: Facilitating trade operations globally.
Intellectual Property: Holding and managing intellectual property rights.

2. What are the annual maintenance requirements for an offshore company in Dubai?

Annual Renewal Fees: Pay annual renewal fees to maintain the company’s good standing.
Registered Agent: Maintain a registered agent in the UAE.
Compliance: Ensure compliance with local and international regulations.

3. What is the difference between a free zone company and an offshore company in Dubai?

Free Zone Company: Can conduct business within the UAE and enjoy various incentives like 100% foreign ownership and tax exemptions. Requires physical presence and office space.
Offshore Company: Primarily for international business and cannot conduct business within the UAE. Offers privacy, tax benefits, and does not require physical presence.