Since the introduction of offshore companies in the UAE in 2003, the UAE has become one of the most attractive jurisdictions to set up an offshore company for large corporations all over the world. An offshore company can be owned by individuals or a corporation and is a business entity which does not carry out any business operations in its country of origin. Mostly, offshore companies are a vehicle through which large corporations look to effectively manage their income and tax liabilities.
The following are the key advantages that make the UAE one of the top destinations in the world to set up an Offshore Company:
Most offshore companies in the UAE are exempt from paying any taxes including personal income tax or corporate tax. Offshore companies also enjoy a 100% exemption from import and export taxes. Value-added taxes (VAT) or taxes on capital gains or withholding tax are not applicable to offshore companies.
The Double Taxation Avoidance Agreement (DTAA) is a tax treaty signed between two or more countries to avoid paying double taxes on the same income. The DTAA comes into play when an individual is resident in one country, but the source of income arises in another. The UAE has signed and negotiated the DTAA with over 80 countries in the world, making offshore company formation more advantageous.
An offshore company is not required to publish financial information or the details of its directors or shareholders. Such information about the company is generally not revealed to any third party unless criminal or terrorist activities are suspected, thereby increasing the anonymity in the business operations of such a company.
Setting up an offshore company in the UAE can take around 3-7 working days and there are no minimum capital requirements. Having one director and one shareholder is obligatory for an offshore company with no restrictions on the citizenship of such director or shareholder. An offshore company is not required to have a physical office space in the UAE and may have a virtual office space. There are no audit requirements and very few regulatory compliances are required to be met by an offshore company.
An offshore company can set up multiple currency bank accounts with many local and international banks in the UAE which is advantageous as it gives MNC’s and international companies the flexibility with respect to the management of their funds in different parts of the world.
An offshore company in the UAE may, just as a natural person, hold assets such as real estate, intellectual property, securities and any other assets no matter where the asset is located. The information on the ownership of an offshore company in the UAE is completely anonymous which is very beneficial for foreign investors to protect their assets from creditors, third parties or lawsuits.
If you have any queries or would like to seek our advice on the setting up of an offshore company in the UAE, do get in touch with us at info@dandreapartners.com.
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