Dubai is considered a tax heaven by a lot of foreign investors especially for the ones willing to open offshore companies in the free zones of it.
The main advantages of opening an offshore company in Dubai are the following: there are no personal, corporate, capital tax or VAT (except for the foreign banking branches or oil producers), anonymity and privacy protection are guaranteed, there is no obligation to deposit the capital in a bank, the foreign ownership is allowed 100%, there is no minimum share capital requested in the Free Zone and just a small amount of money requested as a share capital at opening in the Ras Al Khaimah.
Also, it’s not necessary to submit the company’s account. These accounts are only presented to the shareholders.
STEPS FOR COMPANY FORMATION IN DUBAI
An offshore company is a type of company opened in Dubai by foreign entrepreneurs, with most of it business carried out here instead of the country of origin.
There are two offshore authorities in Dubai located in Ras Al Khaimah and in Jebel Ali Free Zone. The regulations for opening offshore companies are slightly different but not significantly.
In order to incorporate an offshore company in Dubai, the following easy steps are required:
1. The name of an offshore company has to be chosen and reserved. This name cannot contain the words: Insurance, Re-insurance or Banking in their composition. Any name of the offshore company must contain the termination ‘’Ltd.” or “Limited”.
2. Submit the company registration application to the Department of Economic Development (DED).
3. Registering documents and information at the Registrar include provision of: the name and address of the offshore company, the type of business, the name and address of the founders, the amount of share capital, the articles of association and any other document the Registrar may ask. After registration the company receives a certificate of registration and an identification number.
4. Also, in the UAE, licenses are needed for performing commercial activities. There are three types of licenses: commercial, professional or industrial obtained from the Department of Economic Development.
5. A bank account needs to be opened after receiving the certificate of registration. There is no minimal share capital requested at registration in the free zone, the company can choose its own authorized capital. For the companies opened in the Ras Al Khaimah, a minimum share capital of 1,000 AED (around 210 EUR) is requested.
An offshore company can be incorporated in Dubai in approximately 1 week.
REQUIREMENTS FOR OFFSHORE COMPANY FORMATION IN DUBAI
- An offshore company in Dubai can be formed by at least one shareholder and can have maximum 50 members.
- This type of company must be managed by at least two directors and a secretary.
- Their names are kept in the register of directors from the Dubai Registered Office, but they’re details are not available for the public. It’s not mandatory for the general meetings of the offshore company to take place in Dubai.
- As a rule, any offshore company must have a local registered agent, approved by the Dubai Registered Office and the local authorities.
SERVICES PROVIDED FOR DUBAI COMPANY INCORPORATION
- drafting the Articles of Association (necessary for the company incorporation in DUBAI). The Articles of Association of the DUBAI Company can be signed through Power of Attorney;
- drafting all other documents required for the incorporation of the DUBAI company; these documents include: Specimen Signatures, Special Forms provided by the Company Registration Office in DUBAI, passport copies etc;
- offering a local registered agent;
- setting up a bank account for your DUBAI company.
DUBAI KEY FACTS
- The law that governs the actions of a offshore company in Dubai is the Federal Law no 8 from 1984, amended by the Federal Law No 13 from 1988 (the Commercial Companies Law). The offshore companies opened in the free zone are ruled by the Jabel Ali Free Zone Offshore Companies Regulations 2003.
- For an entrepreneur willing to live and work in Dubai it’s better to open a company, but for the investors who don’t want a permanent residence here, it’s preferably to open offshore companies.
- The investors willing to open a limited liability company in Dubai must know that 51% of the shareholders must be UAE citizens.
- A limited liability company in Dubai is based on a minimum share capital of 300,000 AED in cash or kind.
- The free zones of Dubai are different zones where taxes or restrictions on commercial activities are not applied.
- The most known free zones are: Jebel Ali Free Zone, Dubai Silicon Oasis, Dubai Airport Free Zone, Dubai Aid and Humanitarian City, Dubai Internet City and Dubai Media City.
- Dubai has signed or has in pending double tax treaties with more than 65 countries. As a particularity, Dubai hasn’t signed any exchange of information treaties.
- In Dubai, there are not many personal taxes, for example there is only a 5% tax on entertainment and hotel services and a 5% residential tax.
- Also, no VAT is payable for the goods, unlike other countries.
- The investors are also attracted by the advantageous tax system and the cheap workforce.
Bridgewest provides company incorporation services in DUBAI. Please contact us for more information and prices. If you need legal services in Dubai, you may talk to our local lawyers.