The United Arab Emirates (UAE) is a top destination for business owners looking to establish offshore companies.
Offshore companies are legally recognized entities headquartered outside the country where they are based and owned by individuals and corporations.
Non-resident firms, which do not have headquarters in the country where most of their operations are based, can benefit from offshore jurisdictions, which offer tax efficiency, asset protection, and privacy.
In the UAE, all states, including Dubai, Abu Dhabi, Ras Al Khaimah, the Jebel Ali Free Zone, and Ajman, offer offshore company formation services, making it a popular destination for businesses looking to access the global commercial arena.
So let’s find out the prerequisites for offshore company formation in the UAE!
How to Setup Offshore Company In The UAE?
Setting up an offshore company in the UAE is pretty easy. You just need to follow the following steps.
Step 1: Choose your company name
The first step in setting up a UAE offshore company is to choose a company name. The company name should be unique and not similar to any existing company in the UAE. The name should also reflect the nature of the business the company intends to carry out.
Step 2: Fill in your application form
The second step is filling out the application form for offshore company formation in the UAE. The application form typically includes information about the company’s shareholders, directors, registered office address, and the nature of the business the company intends to carry out.
Step 3: A draft MOA and AOA
The third step is to prepare a draft Memorandum of Association (MOA) and Articles of Association (AOA). The MOA is a legal document that outlines the company’s objectives, the scope of activities, and the shareholders’ rights and obligations. The AOA defines the company’s internal regulations and the rules for the management of the company.
Step 4: Open your onshore bank account
The fourth step is to open an onshore bank account for the offshore company. This is necessary to carry out the company’s financial transactions. The bank will typically require documents such as the company’s MOA, AOA, and a copy of the company’s trade license.
Once these four steps are completed, the application for offshore company formation in the UAE can be submitted to the relevant authorities. The application will be reviewed, and if approved, the company will be issued with a trade license and a certificate of incorporation, enabling it to conduct business as an offshore entity in UAE.
Documents Required To Setup Offshore Company In the UAE
Setting up a UAE offshore company requires several documents. Here are some of the most important documents that are typically required:
- Passport Copies: Passport copies of all shareholders and directors of the company are required.
- Proof of Address: A utility bill or bank statement that confirms the address of each shareholder and director.
- Bank Reference Letter: A letter from the shareholder’s or director’s bank confirming their account details, activity, and status.
- No Objection Certificate (NOC): A NOC is required from the shareholder’s or director’s current employer if they are employed.
- Power of Attorney (POA): A POA is required if the shareholder or director is not physically present for the company setup in UAE.
- Memorandum of Association (MOA): The MOA is a legal document that outlines the company’s objectives, the scope of activities, and the shareholders’ rights and obligations.
- Articles of Association (AOA): The AOA defines the company’s internal regulations and the rules for the management of the company.
- Share Certificate: A share certificate is issued to each shareholder and represents their ownership in the company.
- Certificate of Incorporation: The certificate of incorporation is issued once the company is registered with the relevant authorities and confirms the company’s legal status.
- Trade License: The trade license is issued once the company is registered and allows it to carry out its business activities legally.
The exact documents required may vary depending on the type of business activity, the jurisdiction in which the company is established, and the specific requirements of the relevant authorities.
Therefore, it is essential to seek professional advice to ensure all necessary documents are in order before proceeding with UAE offshore company setup.
How much does it cost to set up an offshore company in the UAE?
The cost of setting up an offshore company in the UAE can vary depending on several factors, such as the type of company, the business activities, the jurisdiction, and the level of professional assistance required. However, here are some of the main costs to consider:
- Incorporation Fees: The fees for incorporating a UAE offshore company can range from AED 10,000 to AED 25,000 (approximately USD 2,725 to USD 6,810), depending on the jurisdiction and the level of professional assistance required.
- Annual Renewal Fees: The annual renewal fees for a UAE offshore company can range from AED 7,000 to AED 15,000 (approximately USD 1,910 to USD 4,090), depending on the jurisdiction and the level of professional assistance required.
- Registered Agent Fees: A registered agent is required for a UAE offshore company, and their fees can range from AED 5,000 to AED 10,000 (approximately USD 1,365 to USD 2,725) per year.
- Bank Account Opening Fees: The fees for opening an offshore bank account in UAE can range from AED 2,000 to AED 5,000 (approximately USD 545 to USD 1,365), depending on the bank and the level of professional assistance required.
- Professional Fees: Hiring a professional service provider for a UAE offshore company’s setup and ongoing management can cost from AED 15,000 to AED 25,000 (approximately USD 4,090 to USD 6,810) per year.
It is essential to note that these are approximate costs. The actual cost of setting up and maintaining a UAE offshore company can vary depending on the specific requirements and circumstances. Therefore, consulting with a professional service provider is recommended to obtain a more accurate estimate of the costs involved.
FAQs About Offshore Company Formation In UAE
How can I register my offshore company in the UAE?
- Application in the requisite format
- Address proof
- Documents from Bank indicating the details and bank reference letter
- Copies of passports of owner and shareholders
- Copy of passport of the designated manager
- Notarized Memorandum of Association (MOA)
- Business plan
- Curriculum Vitae indicating the owner’s professional data
What is an offshore license in UAE?
Entrepreneurs and investors who wish to keep their transactions and assets confidential often use an offshore organization. Non-resident companies, sometimes known as offshore businesses, are not permitted to do business in the UAE. Offshore Companies may be formed in two jurisdictions in the United Arab Emirates. RAK and JAFZA (Jebel Ali Free Zone Authority) are also two of the most influential organizations in this field (Rasal Al-Khaimah).
What is the difference between offshore and onshore companies?
Onshore refers to commercial activity that takes place in your home country, whether it be operating a firm or keeping assets and investments. By contrast, offshore indicates that these operations occur in a different nation, region, or jurisdiction.
Is an offshore company in UAE Illegal?
Setting up an offshore company in UAE is legal, as that company has the status of a legal business entity that has been set up with the intention of operating in its registered jurisdiction.
What is the minimal amount of money that must be invested in order to form an offshore company in Dubai?
A minimum investment of between AED 1,000 and AED 1,000,000 is needed to register an offshore company in Dubai. The minimum investment amount depends on the nature of the business operations and the license type.
How long does it take to register an Offshore company in the UAE?
Registering a UAE offshore company typically takes around 2-3 weeks.
Do I need to visit the UAE to register a UAE Offshore company?
No, it is not necessary to visit the UAE to register a UAE offshore company, as the process can be completed remotely.
Conclusion
The UAE has established itself as a leading destination for offshore company formation due to its favorable business environment, strategic location, and modern infrastructure.
Offshore company formation in the UAE can provide various benefits, such as tax efficiency, asset protection, and privacy while allowing businesses to access the global market. However, establishing an offshore company can be complex and requires professional assistance to ensure compliance with local regulations.
By following the steps outlined in this blog and seeking the guidance of experienced professionals, businesses can successfully navigate the process and enjoy the advantages of a UAE offshore company.