Registration of an offshore company is a recognized and effective tool for tax planning and asset protection. Offshore companies in the UAE stand out from other alternative jurisdictions that offer registration of offshore companies.
Registration of an offshore in the UAE gives foreign shareholders – legal entities and individuals – 100% ownership with full tax exemption. There are no requirements for minimum share capital, no restrictions on capital and profits expatriation. UAE company law and banking regulation offers reliable mode of confidentiality, and a reliable and efficient banking system. The United Arab Emirates, in fact, being a tax-free country, do not fall under the category of “tax heavens” and have never been blacklisted by European countries as an offshore jurisdiction.
Apart from significant tax optimization, an onshore company in a Free Trade Zone can greatly minimize the cost of production and/or operational control of the operative business in the country. Due to the absence of corporate tax on most types of business activities and no income taxes, minimal deductions related to the payment of wages, the UAE are a very effective place to do business.
In addition to significant tax advantages, the UAE have well-developed infrastructure, cheap energy and a favorable geographical position in the region between the West and the developing East. The Emirates are favored from other countries by progressive and friendly legal framework for doing business.
The uniqueness of onshore companies registered in the UAE Free Zones is that there are no taxes despite the fact that a company can have a real working office and actually be managed in the UAE.
On-shore companies registered in the Free Trade Zones of the United Arab Emirates – is not offshore, but a full resident company with no taxes (except taxes on the oil industry and tourism).
A company that is registered in a Free Trade Zone allows its owner to get a resident visa of the UAE and benefit from the extensive network of double tax treaties available.
- 50 years ago special legal financial system created by Monaco, Luxembourg, Liechtenstein, Panama, Hong Kong and Switzerland.
- BVI joined.
- Allows wealthy individuals to move their wealth, or at least part of it, out of their home country where they were being taxed.
- The wealthy individuals benefited from low taxes and financial privacy. Nowadays, anyone can use and benefit from this system.
- The term "offshore" is now recognized widely in most sectors of the economy.
- Companies and individuals take advantage of the seclusion of wealth.
- Very low or no tax burdens are levied.
- International business can be less complicated allowing profitability to increase.
- IBC refers to International Business Company
- It is a company which does not conduct substantial business in its country of incorporation.
- It is registered in a tax free jurisdiction.
- It legally minimizes any type of tax burdens.
- It improves one's wealth management.
- Large numbers of high net worth Individuals and corporations are taking steps to incorporate overseas.
- Away from the area of their main business transactions.
To Save Tax
- An offshore company can form part of an overall taxation reduction strategy for certain individuals or entities.
- Combined with an offshore bank account or trust, for example, an offshore company can save an individual or company tax.
- If an offshore company is set up in a low/no tax area then profits can be realized in a tax efficient way increasing profitability.
Favorable Local Legislation Relating to Reporting
The amount of company information and accounting data that needs to be submitted and held on file is far reduced in the majority of offshore centers which goes hand in hand making an offshore company that much easier to manage and run.
Offshore Asset Protection
- An offshore company is the perfect entity for enabling individuals to achieve asset protection offshore.
- Assets can be owned by the company rather than directly by an individual, and the company can be placed in trust or foundation for example.
Achieve a higher level of anonymity
- A number of overseas centers offer the option of having nominee directors for the establishment of a company.
- Others also keep the names of directors and shareholders off public record.
- Those who transact through such a company can keep their affairs private.
Greater Ease of Operation
- Many offshore centers make it very easy for companies to trade.
- The aviation, media and financial sectors require specific licenses and much greater regulation.
- An offshore company can be far easier to manage than an onshore one.
A RAK Offshore IBC is an excellent corporate structure because:
- The IBC is tax-free;
- The IBC portrays a good image to your Clients and suppliers;
- There is no public register of shareholders and directors;
- The RAK Offshore IBC is quick to incorporate.
- It is strictly confidential.
However, our clients should note the following:
- The RAK Offshore IBC is not permitted to trade in the United Arab Emirates (UAE);
- The RAK Offshore IBC cannot rent local premises in the UAE;
In the current worldwide economic situation, RAK is becoming very efficient place to incorporate your offshore company. UAE looks set to reap the rewards of the EU ruling under which banks are now forced to reveal information to tax authorities.
The EU Savings Directive obliges financial institutions in all EU member states to either disclose tax and bank information to the relevant tax authority, or charge clients a heavy withholding tax.
Though the new directives will specifically affect EU residents, a number of banks in 'tax havens' have also agreed to exchange customer information, including Jersey, Guernsey, the Isle of Man, the British Virgin Islands, the Cayman Islands, Switzerland, Liechtenstein, Monaco and San Marino.
The reputation of discretion for some of these countries is being eroded. In order to keep details of their wealth private, bank customers now have the option of paying a withholding tax which will be levied directly in the country in which their savings are held.
UAE has long enjoyed a reputation as a secure, tax-free jurisdiction for international banking and company incorporation. With this latest development from Europe, RAK company registration and corporate and personal banking options are becoming more popular with international businesses and high net worth individuals.
8. Is there any requirement/regulations governing availability of names for the RAK Offshore companies?
RAK Offshore International Business Companies (IBC) must use the suffix Limited or Ltd. to denote limited liability.
RAK Offshore IBC can have minimum one shareholder and a maximum limit of 15 shareholders whose liability is limited to their shares in the company's capital. 100% foreign ownership of the company is allowed. There is no public register of shareholders and directors. Shareholders don't need to visit RAK to sign the incorporation documents.
Minimum capital is not required for the incorporation of an offshore company. But it has to be mentioned on the MOA. Bearer shares are not allowed. AE Dirham and US Dollar can be used as the denomination for the capital.
A minimum of one director and one secretary are required and they can be bodies corporate. The director can also be a secretary. A register of directors must be held at the registered office, but it is not a matter of public record.
Registered office and local agent
RAK Offshore IBC must maintain a local registered agent approved by the local authorities and a local registered office, which is usually provided by the registered agent.
RAK Offshore IBC doesn't pay taxes on profit and capital gains, No value-added tax, No withholding tax.
All information, documents are strictly kept confidential.
Audit and financial returns
No annual reports or accounts need to be filed. Accounts must be audited and accounts must be distributed to shareholders (but NOT filed with the authorities). RAK Offshore IBC may retain their accounting records wherever in the world the directors deem appropriate.
Businesses, that want to be registered in the United Arab Emirates, but do not intend to conduct any substantial business in the country, can opt for RAK Offshore international registry service. This service is particularly suitable for companies looking for minimizing their overall tax liability, seeking asset protection or in need of establishing an exchange control trading vehicle.
The companies are regulated under RAK Offshore Regulations 2006.
- It may have non UAE resident as director or shareholder.
- It may have UAE resident as director or shareholder.
- It may have corporate shareholder/corporate director
- It does not require the shareholder/director to be physically present in the UAE for incorporation
- It may hold shares in other UAE and worldwide companies.
- It may maintain bank accounts and deposits in the UAE or worldwide.
- It may own real estate in the UAE, with prior authorization.
- It is not obliged to maintain its books and records.
- It cannot have physical offices in the UAE.
- It may not carry on business within the UAE.
- It may not obtain UAE Residency Visa.
- It may not do banking and insurance business without special license.
- Holding Assets
- Holding Bank Account
- Property Owning (Freehold Areas)
- General Trading
- Consulting and Advisory Services
- Holding Company
- Property Owning
- International business services
- Professional Services
- Shipping and ship management companies
- 100% income tax exemption
- 100% corporate tax exemption
- 100% capital and profit repatriation
- 100% ownership in Free Zones
- No capital gains tax
- No Value-added tax
- No Withholding tax
- Proximity to entire Gulf and global markets
- Low start-up costs
- Absolute privacy, confidentiality and protection of assets and information
- 100% foreign ownership
- Ability to maintain bank accounts (Current Account) in the UAE
- Limited liability company
- Minimum one director required, one shareholder and one secretary ( it can be the same person )
- Own real properties in the UAE
- Annual Audit Report not required to be submitted to the Authority
- It does not require the shareholder/director to be physically present in the UAE for incorporation
- No restriction on nationalities
AE Dirham and US Dollar can be used as the denomination for the capital.
Yes. Corporate entities are even permitted to hold shares in a RAK Offshore companies.
The director can be a resident or any foreign citizen but is required to submit the proof of residence and other relevant documents
There is no public register of directors, although the company may voluntarily file its register of directors with the Registrar.
Yes, a company must have a common seal