Running a business is something that looks absurdly simple on paper, just a few steps and you will have a smooth-running business, but ask anyone who has ever run a business or tried to run a business and they will tell you that running a business is one of the most difficult things. There are just so many things that need to be taken into consideration before taking action and not to mention various small hidden changes that only show themselves once you have fully ented and have started running the business. One such additional cost is TAX This is something that is unavoidable it doesn’t matter if you are running the business or not you are doing a job in a company. You will have to pay taxes in one form or another. Even if you buy some products you are paying taxes. However, there is good news for the businesses owners. There is a concept that you can use to sidestep the issue of taxes. In this article, we will be talking about how you can use other countries and their laws to your advantage. So without any delay let’s get started.
What is an offshore company?
An offshore company is a legal business entity that is set up with the intention of operating outside its registered jurisdiction and/or the location of its ultimate ownership. Now to put this in layman’s terms. An offshore company is a company that is based in different countries from the one in which it does most of its business. So to better our understanding let’s say that we want to sell in India but I have registered my company in Dubai so this company will be an offshore company because my intention was to do business outside registered jurisdiction which in this case is India. There are a lot of different countries that allow companies to be set up in the country. However, in this article, we will talk about why your business needs to open an offshore company in UAE, and what advantage UAE has over other countries that offer similar services.
Note Offshore companies should not be confused with UAE Free Zone companies. Both of them are different and making a mistake in this might cause you a lot of tension in the future.
UAE is a big country and you just can not set up your company just anywhere in the UAE. The government of the UAE government has made different zone in which an individual can set up their company. Now there are different zone within Dubai in which you can set up your company. These different zones also offer different features that might be better for supporting certain businesses.
Here is the list of zones in which you can set up your company.
ZAFZA (Jebel Ali Free Zone)
RAKICC (RAK International Corporate Centre)
FAZ (Ajman Free Zone)
Now of these zones offer mostly similar things but there are some elements that help them stand out from other zones.
JAFZA
JAFZA was created in 1985 under a Ruler’s Decree. It was constructed in the Jebel Ali area at the far western end of Dubai, United Arab Emirates, near Abu Dhabi. Jebel Ali Port is one of the world’s biggest shipping ports. It is this very unique position that allows JAFZA to grow at an amazing pace. In 1985 JAFZA only had only 19 companies, but in 1995 the companies grew from 19 to more than 500, and today there are more than 8,000 companies working in JAFZA. There are more than 100 Global Fortune 500 enterprises in these 8,000 companies in companies.
Jebel Ali is located about an hour’s drive from Abu Dhabi. Al Maktoum International Airport, which is planned to be the largest airport in the world these offers extra benefits to the companies as it is extremely close to the capital city with the world’s biggest airport on its way.
JAFZA in conjunction with the Dubai Government introduced the Offshore Company in 2003 under the Jebel Ali Free Zone Offshore Companies Regulations 2003.
JAFZA Key features.
JAFZA was created in 1985 under a Ruler’s Decree. It was constructed in the Jebel Ali area at the far western end of Dubai, United A
Shareholders Minimum one (1) shareholder is required for operating the offshore company and along with that corporate shareholders are permitted. Corporate shareholders is a business entity that owns shares in another limited company. However International corporate shareholders are required to have all company documents attested. This reduces the number of people (shareholders) needed to open an offshore company in JAFZA.
Directors Minimum two (2) directors are needed to operate the offshore company and corporate directors are not permitted. If you like privacy hen you are going to love this. The details of directors are not available on the public register. His means that the public will not know the identity of the directors.
Secretary Every company in JAFZA needs to have a Secretary. However, JAFZA allows the director to act as the company secretary.
Share Capital There are no minimum Share Capital requirements in JAFZA.
Annual Reporting Every company in JAFZA must have records for 10 years from the date of preparation and the company must appoint an auditor to examine and report on accounts. This auditor should be from an approved list only.
rab Emirates, near Abu Dhabi. Jebel Ali Port is one of the world’s biggest shipping ports. It is this very unique position that allows JAFZA to grow at an amazing pace. In 1985 JAFZA only had only 19 companies, but in 1995 the companies grew from 19 to more than 500, and today there are more than 8,000 companies working in JAFZA. There are more than 100 Global Fortune 500 enterprises in these 8,000 companies in companies.
Jebel Ali is located about an hour’s drive from Abu Dhabi. Al Maktoum International Airport, which is planned to be the largest airport in the world these offers extra benefits to the companies as it is extremely close to the capital city with the world’s biggest airport on its way.
JAFZA in conjunction with the Dubai Government introduced the Offshore Company in 2003 under the Jebel Ali Free Zone Offshore Companies Regulations 2003.
Key benefits of JAZA
100% Foreign Ownership JAFZA does not require any local shareholding. His means that you don’t have to share any of your profit with the locals. You can keep all of the profits.
Local Real Estate Ownership Only JAFZA offshore companies are allowed to directly own local Dubai real estate. If your business model requires you to have a local office then this is the only way you can achieve this.
Shares in Local Companies There are very strict rule by the government that makes that the company do not do business with the persons resident in the UAE. However Offshore Companies are allowed to hold the shares of both Free Zone and Onshore (LLC) Companies. Just make sure that Documents for use in the UAE, Bahrain, Saudi Arabia, and Qatar do not need to be attested
Local Bank Account Offshore companies can hold multi-currency bank accounts in the UAE to carry out routine international transactions. This will be especially helpful if you do business in other countries and have to deal with multiple currencies.
Privacy If you are worried about privacy then the details of the shareholder and the directors are not shown on the public register.
The inspection registrar has the power to appoint inspectors to investigate the affairs of an Offshore Company. The owner of the company may be liable for all inspection fees.
Documents required
To set up your company JAFZA needs the following documents from all shareholders and directors.
- Certified Passport Copy (by Lawyer/Accountant/Sovereign Employee)
- 2 x Proof of Address documents
- Bank or Professional Reference Letter
- Bank or Professional Reference Letter
