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Guide to Starting an Offshore Company in the UAE

Dubai provides a stable and secure environment to international investors and offers them steady returns for setting up their business. Moreover, it offers choices to them for setting up a Mainland, Free Zone, or Offshore Company in any region in the UAE. The selection, however, completely depends on different factors including the location of the business. In the same way, offshore company formation in UAE offers exclusive benefits to the ex-pats and budding entrepreneurs.  Also referred to as International Business Corporations (IBCs), offshore companies are established outside of the registered jurisdiction, and their formation and operation are also different from other conventional types of companies.

Since big corporations and small start-ups are making their way into the Arab land through offshore companies, it’s important to learn everything about offshore company setup in UAE. This article will discuss all the key aspects and basic requirements for forming an offshore company in the United Arab Emirates. 

What is an Offshore Company? 

Offshore companies are legal entities that are allowed to operate outside the location of their ultimate ownership. In simple words, an international business company registered in one jurisdiction can physically exist and operate outside of that registered jurisdiction. 

The mechanism of offshore company formation in UAE was introduced in the year 2003 in order to expand its hold on the business and commercial world. An offshore business setup can undertake international business transactions and deals while operating outside of its jurisdiction. In addition, it offers a plethora of tax benefits and lenient policies that attract entrepreneurs to initiate the idea of the offshore company set up in the UAE. 

Benefits of offshore company formation in UAE 

Several factors come together and make offshore company formation more attractive, such as – 

  • Business anonymity 

Offshore company setup in UAE provides business anonymity by keeping the company information confidential. In other words, the owner need not publish the company’s financial information or portfolio in any public domain. The authorities ensure that such sensitive information is unrevealed to any third party unless the company is suspected of criminal activities. 

  • Global market expansion 

If you want a cost-effective gateway to expand your business on an international level, then offshore company formation in UAE  is your best catch. It can indeed open doors for new international deals and collaborations for your business. 

  • Tax benefits 

When you set up an offshore company in the UAE, you are exempted from paying several different taxes such as corporate tax, income tax, sales tax, personal tax, and many others. In that case, the returns company generates from the investment completely belong to the company itself. So, that’s yet another advantage of starting an offshore company in the UAE. 

  • Convenient and simplified procedures 

Undoubtedly, UAE offers the most favorable business setup in the whole world. However, an offshore company formation in the UAE is much more convenient and easy than other business structures. Apart from tax exemption, an offshore company is also free from filing audited financial statements every year. Moreover, they also do not need to apply for a company license, rather a certificate of incorporation is issued to them from the relevant department. 

  • Ownership 

A freezone company setup allows 100% foreign ownership without the involvement of a local sponsor. Similarly, offshore companies also promote full ownership of the business to the foreign investor, so that they do not have to share the stakes of the company with a local partner. This trait along with others attracts more investment into offshore company formation. 

  • Access to global funding 

The offshore company set up in the United Arab Emirates is worldwide popular. Thus, it has a positive impact on the incoming investment as well as potential investments from global investors. Additionally, the present economic environment in the UAE is booming and can help new businesses to grow. 

  • Limited liability 

Although the offshore business setup in the UAE offers 100% ownership of the business, it is also treated as a limited liability company (LLC). That simply means that the owner’s legal liability is reduced, thus, adding a further level of security to their investment. 

  • Asset security 

The inheritance laws in the UAE allow expats and foreign investors to purchase property in the UAE through their offshore company and make it their corporate asset. In this way, they are free from paying inheritance taxes, and in addition, gain control over the transfer of property for future purposes.

You may like it: Who Are The Best Business Setup Consultants in the UAE?

Challenges of offshore company formation in UAE 

While offshore companies in the UAE have many advantages, they come with a fair set of challenges as well. For instance,

  • Since offshore companies have no access to the business license, they do not have the authority to carry out any business activity within the UAE. These activities include conducting trade, hiring staff, etc. 
  • Even though offshore company owners have the permission to buy real estate assets in the name of their company, they still have limited options for purchase. For example, companies residing in RAK International Corporate Centre and Jebel Ali Free Zone can benefit from this law.
  • Offshore companies can carry out any activities outside of the UAE, except for a few commercial activities. For example, they can engage in international trade, property holding, general trading, etc., but they cannot involve in activities related to insurance, media, aviation, etc. 
  • An offshore company set up in the UAE is relatively more expensive as compared to other tax havens, owing to all the advantages it offers to the investors. 

Key jurisdictions that offer offshore companies set up in the UAE 

  • Ras Al Khaimah International Corporate Centre (RAK ICC)
  • Jebel Ali Free Zone (JAFZA) 
  • Ajman Free Zone 

Key requirements for offshore company formation in the UAE 

  • Name of the company
  • Local offshore agent 
  • Minimum share capital 

Process of offshore company formation in UAE 

An offshore company formation in UAE doesn’t involve license application, but still, the owner has to follow certain steps to commence the business in the UAE. These steps include – 

  • Determine a business activity 
  • Select a company name 
  • Open a bank account for business transactions 
  • Draft AOA(Articles of Association) and MOA(Memorandum of Association) 
  • Apply with all the required documents 

Documents required for offshore company setup 

  • Passport copies of the shareholders 
  • Residence proof 
  • Updated CV of the directors and shareholders
  • Passport-sized photograph 
  • Business plan 
  • Original bank reference 
  • Company name 
  • Board resolution
  • AOA and MOA 
  • Hierarchy of beneficiaries 

Wrapping up 

Establishing an offshore company in the UAE is a reasonable medium to help your business grow. The relaxed regulations and a tax-free business ecosystem form great factors to invite investments from all around the globe for offshore company formation. The consultants at Shuraa Business Setup can help you with your offshore company formation in UAE. 

Shuraa has been established for over 20 years to guide, support, and encourage entrepreneurs in setting up businesses in UAE. Thus, our professionals have several years of experience in the commercial and industrial fields of the UAE. moreover, they possess in-depth knowledge about the in and out of the company setup undertakings. Hence, we can be your best guide as well as a companion in starting an offshore company in UAE. 

So, without any delays, share your queries with our advisory team and utilize the outstanding services of Shuraa. 

Call – +97144081900

WhatsApp – +971507775554 

Email – info@shuraa.com


Sakina Burhan is a good experience writer, blogger and social media promoter by providing valuable information which helps readers to get more ideas.

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