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If you are planning to set up a business in the UAE then, you can consider the possibility of offshore company setup in UAE. As an offshore companies offer benefits that regular companies lack. But, before you decide the type of organization you must have some knowledge about offshore companies like what is an offshore company, how it operates, what documentation and legal formalities are required and what benefits offshore companies offers.
This article will brief you about the unlimited benefits of an offshore company and a suitable location.
Let’s start by answering a very basic question that is
An offshore company is a corporation that is formed in a foreign entity and operates outside of its country formation. Offshore the word itself means that the company is set up beyond one’s National boundary. An offshore company has two different definitions, depending on the perspective:
1) If a company is set up outside the country where its principles reside.
2) If a company has been set up for the purpose of operating outside the jurisdiction.
The reason behind it is the advantages or laws which are favorable to offshore companies. For instance, an offshore company which is registered in the Caribbean island in Nevis attracts investor with the benefits and favourable law terms they offer.
A company registered in this capital can open a bank account in that country, or other countries but cannot operate within the country. Nevis has comparatively fewer resources so this is done to protect the assets of the country from getting seized by lawsuits or investors.
An offshore company can carry out the following activities:
1) They can perform advisory services.
2) They can buy, sell and hold stalks of the company.
3) They offer International and professional services.
4) They can perform shipping and ship management.
5) Working as an Intermediate broker or consultancy agency.
6) They can perform general trading activities.
Offshore companies offer various benefits and those benefits are described below:
1) You are not required to pay any corporate tax. The International Companies Regulation requires no shareholding in an offshore company.
2) Offshore companies are cost-effective and the registration process is quite simple and quick, you can complete registration within 3-4 working days.
3) The director of an offshore company is nominal for citizenship.
4) You don’t require any minimum shared capital, however, the registrar may require that the paid-up capital of the company is to be commensurate with its proposed activities.
5) Transferring shares in an offshore company is easy and free, all you need to be a written instrument.
6) There is an abundance of the advanced banking system, telecommunication facilities and the flexible legislative framework for offshore companies.
Here are some steps that will help you establish an offshore Company.
The first and foremost step is to decide the name of the company. Dubai is very particular about the name convention. Choose the name carefully. Make sure that the companies name end with LTD or Limited. Once the name is finalized decide the nature and scope of your company. Generally, Offshore companies are trading companies. The next important aspect is you require one director, shareholder, and secretary. There is no fixed or minimum capital investment.
There are some following documentations required for registration:
1) A passport copy of shareholders and directors.
2) A short resume of the shareholder.
3) Banking reference letter and original proof of address.
Submit the application form with the signatures of the above-mentioned dignitaries. Don’t forget to add the signature of MOA (Memorandum of Association). Submit the documents and your company registration process normally takes 3-4 working days.
Offshore company formation in Dubai, Certain rules and regulation vary from location to locations so here we have shortlisted three locations which are most suitable for the new entrepreneurs and investor.
Rak place is an hour drive away from Dubai and has the highest level of industrialization. They offer a business-friendly environment and is cost-efficient. It allows you to have foreign ownership of the company. Know more about: business setup in Rak.
Jafza is situated in the Middle East, JAFZA is one of the most preferred locations and most popular destination for first offshore companies. This place is surrounded by Jebel Ali Port. It is more customers driven and the business-oriented hub where you experience a vibrant and dynamic work culture.
Ajman is one of the cheapest and the most prominent spot for off Shore Company set up in Dubai. This place offers various benefits as well as is a competitive environment. Know more about: business setup in Ajman.
How long it takes to register an offshore company?
It generally takes 3-4 working days.
Do I need to visit UAE for company registration?
No, you can go for Dubai IBC and in that case you are not required to be present in the country. However, for a bank account opening, you are required to stay for one day.
Is it possible to get residency Visa on registration of an offshore company?
This option is not available in this type of company formation.
What is the difference between an onshore company and an offshore company?
For the registration, onshore companies require at least two weeks here as an offshore company takes 2-3 days. Obtaining a residency visa in case of an onshore company is possible not in offshore. Offshore company registration and maintenance costs are low whereas in the case of onshore company registration and maintenance cost is high.
Work hard and no road is difficult. Be passionate and do thorough research before setting up your business. Look for every other possibility which helps you gain maximum benefits from less investment.
I hope this article helped you out in briefing about the basic concept of offshore company and company formation in UAE.