Offshore company formation in Dubai (2023 guide)

person starting an offshore company in the UAE

Dubai’s business landscape is much admired around the world. The emirate’s thriving and diverse economy, strategic location and incredibly attractive tax regime make it the ideal place from which to do business.

Dubai welcomes businesses of all sort, those requiring traditional commercial, industrial or professional licenses, as well as those requiring rather more specialised setups.

The emirate’s free zones, for example, are particularly popular with international entrepreneurs. UAE free zones allow business owners to take advantage of full customs tax exemption, no currency restrictions and the ability to repatriate 100% of your capital and profit.

Some free zones, such as Ras Al Khaimah Free Trade Zone (RAK FTZ) and Jebel Ali Free Zone (JAFZA), also offer offshore company setup.

Offshore companies differ from standard free zone setups as they are not permitted to carry out business activities within the UAE. However, offshore companies are permitted to hold shares in other UAE companies and invest in UAE real estate. If this sounds like the setup for you. Here’s a handy guide on the ins and outs of offshore company ownership in Dubai.

What is a Dubai offshore company?

There are a few key differences between a Dubai offshore company and a standard free zone setup. Offshore companies cannot undertake business activities inside the UAE and are not permitted to have a physical office in the country. Offshore company owners are also not eligible for UAE residency visas.

Benefits of an offshore company in Dubai

There are several significant benefits to operating a Dubai offshore company. Perhaps the most attractive is confidentiality.

Investors in offshore companies are able to remain anonymous. Unlike free zone setups, details of offshore company owners and shareholders are not publicly disclosed.

Offshore businesses also offer a number of tax advantages. All offshore setups benefit from the UAE’s incredibly low tax regime – which still stands at 0% on corporate and personal income.

Finally, offshore company setup can be an affordable option. With no premises permitted and affordable licensing and registration, overheads are low.

Offshore companies are also not required to pay up share capital.

Dubai offshore companies – key facts

What activities are available for an offshore company in Dubai?

Offshore companies are permitted to carry out very few activities.

Offshore companies are permitted to purchase and manage real estate and hold stakes in other businesses among other similar activities.

Other permitted activities include advisory and consultancy services, wealth management and some brokerage services.

Documents required for starting an offshore company in Dubai

There are several documents required to start an offshore company in Dubai. These include:

  • Copy of a valid passport for all shareholders
  • Last six months of banks statements
  • Attested financial documents

What is the key difference between an offshore and free zone company?

Free zone companies are free to trade from within their chosen free zone, within the UAE.

Offshore companies, however, must have no presence in the mainland and cannot conduct any business activities within the UAE.

Is it legal to have an offshore company?

Absolutely. Providing your business in incorporated in line with the latest UAE regulations, it is perfectly legal to form and run an offshore company in Dubai.

How long does it take to register a UAE offshore company?

When working with an offshore company setup expert such as Trade License Zone, it is possible to form your company in a week or two.

Can an offshore company lease office space in the UAE?

No. Offshore companies are not permitted to occupy physical premises within the mainland UAE.

Can an offshore company in Dubai open a bank account in the UAE?

Yes. One of the key advantages of offshore company ownership is that it affords access to a range of UAE banking facilities.

How to form an offshore company in Dubai

The first decision to make when starting an offshore company in Dubai is to decide in which free zone to register.

As previously mentioned, RAK FTZ and JAFZA are the most popular. In both cases, you will be required to meet certain requirements in order to successfully establish your business.

All offshore companies must be formed with at least two directors. You will also be required to appoint a company secretary.

When making your application to your chosen jurisdiction, you will be required to submit an application along with your official documentation. You will also need to choose and provide your company name.

Choosing a company name takes extra care here in Dubai due to the UAE’s company naming conventions. You cannot include any offensive or blasphemous language and if you wish to include your name in your company name, you must use it in full rather than just your surname or initials. You must also check that your chosen name is available to be registered.

You must also open an offshore bank account in Dubai in order to start trading. An offshore company formation expert can also help with this step to ensure a fast and straightforward account opening.

Understanding offshore company setup in Dubai

Offshore company setup in Dubai has been designed with simplicity in mind. That said, it does take some in-depth knowledge of the UAE and its many customs and regulations.

That’s why it’s always advisable to acquire the services of a business setup company who can not only advise on the process but also seek out the most suitable license and setup type for your business, based on your needs and your budget.

By making use of a business setup service, you also gain peace of mind that your license and visa applications are free from errors and omissions – both of which can lead to delays and rejection.

When you work with a company formation specialist, all you need to provide is some basic documentation and a little information about the nature of your business. Then, sit back and let the experts take care of the rest – managing your license and visa applications, communicating with all relevant departments and authorities, and reporting back when you’re ready to start trading. It really is that simple.

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