The Jebel Ali Free Zone in the United Arab Emirates is one of the most well-known and respected locations for setting up a company offshore. JAFZA, situated in Dubai’s Western End, commenced operations in 1985 to provide an ideal business environment for entrepreneurs and investors in the Middle East and Africa.
With a population of over 100,000, it is also one of the nation’s largest and fastest-growing free zones. In addition, the container port of Jebel Ali, which is the world’s seventh-largest, is only a short drive from here as well.
JAFZA is responsible for 23.9 percent of Dubai’s G.D.P. and 32 percent of Dubai’s G.D.P., with over 100 nations represented and 135,000 people employed there. In 1985, there were only 19 companies, but now there are 8,700+, with 100 of them on the Fortune Global 500 list.
Offshore companies are those that are not based in the United Arab Emirates and are registered in the JAFZA. These offshore companies have the right to set up their bank accounts for business purposes. An offshore corporation in the Jebel Ali Free Zone demonstrates that you are doing lawful business in the U.A.E. “If you don’t live in the United Arab Emirates, you may still do business in the Middle East thanks to this.
Companies located outside the U.A.E. can own property in Dubai, but only in areas that the government has sanctioned. In addition, you won’t have to pay any taxes and will be able to bring back all of your earnings. There are also other reasons why it is good to set up a business in the U.A.E.
However, in this article, we will be discussing the steps and various factors involved in JAFZA offshore company formation.
What activities are allowed and not allowed for a JAFZA Offshore Company?
There is legislation in place in the Emirate of Dubai that permits offshore firms to be set up in Dubai’s Jebel Ali Freezone. As a result of the restrictions, the authority is able to maintain a clean image of the companies before the world’s financial authorities and regulatory agencies.
A certificate of incorporation is all that is given to a Jafza offshore company, not a business license. Because of this, the offshore company will be unable to do business with UAE citizens. This is unfortunate. Likewise, no bearer shares are allowed either. Furthermore, no business or activity of the JAFZA offshore company is permitted in the UAE, although it is eligible to purchase freehold property in certain areas of Dubai that are authorized for this purpose.
Activities Permitted For JAFZA Offshore Companies
Following is the permitted JAFZA activity list:
- Offshore firms registered in the JAFZA are permitted to maintain professional contact with legal advisers, attorneys, accountants, and auditors.
- They are entitled to convene shareholder and board of directors meetings in the United Arab Emirates.
- Furthermore, JAFZA offshore corporations have the authority to lease property for use as a registered office or to possess real estate in locations such as the Palm Islands or the Jumeirah Islands, among other places.
- Offshore firms registered in the JAFZA may also become shareholders in Freezones and Limited Liability Companies (LLCs).
- JAFZA offshore firms may also open a bank account in the United Arab Emirates to facilitate the conduct of their regular business operations. Offshore businesses can open multi-currency bank accounts in the country to conduct international business.
Benefits Of Opening an Offshore Company In JAFZA
JAFZA is one of the world’s leading Free Zones and offers a wide range of benefits for businesses that choose to set up here. Some of the key benefits include:
- JAFZA offers a tax-free environment for companies, which means they can keep more of their profits. There will be no corporate, capital gains, capital repatriation, or any other kind of tax charged on the offshore corporation or its shareholders.
- JAFZA is strategically located in the UAE, making it a gateway to markets in the Middle East, Africa, and Asia.
- It is permissible to have 100 percent foreign ownership.
- JAFZA has a strong infrastructure and offers a range of facilities for businesses.
- Located in close proximity to major ports and airports.
- You have the right to complete anonymity and confidentiality in your business.
- There is no need for a minimum amount of capital.
- Businesses have the opportunity to make investments in the international market.
How to Set Up an Offshore Company in JAFZA?
Are you thinking of setting up an offshore company in JAFZA? If so, there are a few things you need to know. Here’s a quick guide on how to set up an offshore company in JAFZA:
1. First, you need to choose the type of company you want to set up. There are two main types of offshore companies in JAFZA: free zone companies and non-free zone companies.
2. Free zone companies are fully owned by foreign investors, and they are exempt from corporate taxes. Non-free zone companies, on the other hand, are owned by UAE nationals and are subject to corporate taxes.
3. Once you’ve decided on the type of company you want to set up, you need to choose a name for your company. The name should be unique and should not be similar to any existing company in JAFZA.
4. Next, you need to submit the required documents to JAFZA. These include the company’s Articles of Association, Memorandum of Association, and Certificate of Incorporation.
List of Required Documents
- Applicant’s Passport
- Applicant’s CV
- Applicant’s UAE Visa Copy
- Applicant’s UAE Entry Stamp
- Applicant’s N.O.C. from UAE Sponsor or shareholder
- Bank Reference letter
- Applicant’s Proof of Residence
- Certificate of Incorporation of the respective offshore company
- Certificate of Incumbency of the offshore company
- Memorandum / Articles of Association of the parent company
- Board Resolution
- Company’s Authorized Power of Attorney
- Certificate of Incumbency of the offshore company
- Certificate of Good Standing of the respective company
5. Once your documents have been approved, you will be given a trade license. This license allows you to operate your business in JAFZA.
6. Finally, you need to open a bank account in JAFZA. This is necessary in order to conduct business in JAFZA.
The Cost of Setting Up a JAFZA Offshore Company
The official cost of setting up an offshore company in JAFZA on average is between 15,000 AED ($4,083 USD) to 18,000 AED ($4900 USD) as it includes:
- Registration fees
- Application Fee
- General Trading License Fee
- Industrial License Fee
- Service License Fee
- Logistics License Fee
- Miscellaneous Fee, Etc.
Depending on who you choose to be your registered agent, the cost of setting up a business in JAFZA can be very different from one company to another. The Jebel Ali Free Zone Authority (JAFZA) is a good place for businesses to start in the United Arab Emirates because it’s easy to get to, flexible, and cheap.
The laws and regulations for business registration in the Jebel Ali free zone have been written to make it easy for investors from all over the world to set up businesses there. JAFZA is the only free zone region that allows people to invest in real estate in this way, and it is the only free zone region that allows this. Also check out the Offshore Company formation in RAK
FAQs About JAFZA Offshore Company Formation
1. Is JAFZA Offshore Company Eligible for a UAE resident visa?
No, like any other offshore company in UAE, JAFZA offshore company is also not eligible for a resident visa.
2. How is JAFZA offshore renewal done?
Your registered agent is in charge of renewing your JAFZA offshore company. You are not required to attend in person. The paperwork will be handled by the agent. All you have to do is transfer the required fee to your agent. When you renew your license, you will get a certificate of good standing, which is a formal certification that your company is still in existence.
3. What to do in case of Closure?
Following are the steps to deregister a company:
- Give an exit interview with the customer service department
- Submit the deregistration form at the JAFZA head office
- Submit the keys to the office or facility
- Submit the lease termination form
- A clearance letter from DEWA (Dubai Electricity and Water Authority)
- Customs clearance
- Submitting Outstanding dues to telecommunication providers
- RTA clearance to be submitted if the lease of the property was held
4. How can I start a company in the Jebel Ali Free Zone?
- Select a registered agent
- Choose a company name
- Create a bank account
- Provide AOA & MOA
- Submit all required documents and pay all the expenses
5. How many companies are there in JAFZA?
Jafza is home to the headquarters of almost 8,700 worldwide enterprises. These companies are among the Fortune Global 500’s top 100. Some are as follows:
- Reckitt Benckiser Arabia.
- LG Electronics.
- Mitsubishi Motors Middle East and Africa.
- Nissan Autos limited.
- Swarovski Middle East.