For an entrepreneur willing to live and work in the Middle East, it’s better to open an onshore company in Dubai, but for the investors who don’t want a permanent residence there, it’s preferably to set up offshore companies. Another interesting opportunity is to set up a company in a free zone, such as Ras Al Khaimah (RAK), that offers a wide range of facilities: 0% corporate tax, 100% foreign ownership allowed, 100% capital repatriation etc.
The appealing tax regime and many incentives offered to the foreign investors in Dubai make the entrepreneurs choose opening offshore companies in Dubai.
The law that governs the actions of an offshore company in Dubai is the Federal Law no. 8 from 1984, amended by the Federal Law no. 13 from 1988 (the Commercial Companies Law).
The main advantages of opening an offshore company in Dubai are the following:
- there are no personal, corporate, capital tax or VAT (except for the foreign banking branches or oil producers);
- anonymity and privacy protection are guaranteed;
- there is no obligation to deposit the capital in a bank;
- the foreign ownership is allowed 100%;
- there is no minimum share capital requested in the free zones;
- it’s not necessary to submit the company’s account. These accounts are only presented to the shareholders.
The name of an offshore company cannot contain the words: insurance, re-insurance or banking in its composition. Any name of the offshore company must contain the termination ‘’Ltd.” or “Limited”.
An offshore company in Dubai can be formed by at least one shareholder and it can have maximum 50 members. This type of company must be managed by at least two directors and a secretary. Their names are kept in the register of directors from the Dubai Registered Office, but their details are not available for the public. It’s not mandatory for the general meetings of the offshore company to take place in Dubai.
We invite you to watch a video about how you can open an offshore company in Dubai:
Onshore companies are used to operate within the UAE market unlike offshore companies that are mainly for performing business outside this country. While a license is required for an onshore company, for offshore ones there is no need to obtain any license. You also have to pay the corporate tax, establish a real office and have a local (UAE) shareholder. The procedure for incorporating an onshore company is more difficult than for an offshore one and the costs are higher.
If you want to benefit from different type of incentives, you may choose to open an onshore company in a free zone and this is the most common decision taken by businessmen.
There are a few types of onshore companies and the most common are:
- the limited liability company,
- private shareholding company,
- public shareholding company.
The foreign entrepreneurs who want to establish a limited liability company should know that they are required to have at least one UAE partner who will hold minimum 51% of the paid-up capital.
For onshore companies in Dubai, there is the obligation of obtaining a license, according to the type of activity to be performed.
The entrepreneurs who choose to open an onshore company in Dubai will have the possibility of purchasing real estate properties, benefit from a skilled workforce etc.
Foreign investors who want to benefit from opening a company in Dubai or in other emirate in UAE should know that there is a wide range of free zones in this country where they are offered special conditions for performing businesses.
One of the most chosen free zones in UAE is Ras Al Khaimah (RAK) where investors have multiple advantages: 0% corporate tax, a business-friendly jurisdiction, the possibility to repatriate all of their profits etc. This is situated in a strategic position for easy access to the markets from Africa, Asia and the Middle East.
For more information about the types of companies you can set up in Dubai, you may contact our specialists in company formation.
If you need to register an offshore company in Dubai or any other type of company, you may contact our specialists in company formation who will handle the entire procedure of company incorporation.