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Oneworld MidEast
01 July, 2015

For an outsider it might be difficult to understand what different offshore companies the UAE has to offer.

In this paper the offshore companies currently available in UAE are discussed.

We will elucidate you what the benefits and downsides are, and which offshore companies are recommended.

Definition of an offshore company

Offshore companies normally are statutorily exempt from taxation in their jurisdiction of registration provided that they do not undertake business with persons resident in that jurisdiction.

A UAE offshore company cannot engage in business inside the UAE. It cannot import goods or render services.

This is different from other types of companies in UAE such as the free zone establishment (FZE), free zone company (FZC) - both owned 100 percent by expatriates - and the local LLC, a partnership with local emirati. These companies conduct business in UAE, rent office space and can apply for visas for their staff and shareholders.

UAE offshore companies are 100 percent foreign owned and can open bank accounts inside the UAE as well as abroad.

The Jebel Ali offshore company

Historically the first offshore company in the UAE was the Jebel Ali offshore company.

Jebel Ali is the free zone where Dubai’s main port, the Jebel Ali port is located. This is a major international trading hub of Dubai. Therefore, an offshore company is located in a main business hub.

A Jebel Ali offshore company cannot conduct business inside the UAE.

However, there are a number of benefits:

First of all, this is the only foreign owned company that can hold real estate in Dubai. So if you are looking to set up an investment company with 100 percent foreign ownership to hold real estate in Dubai, this is the best option you have.

Another benefit is that with this company you can rent an office space in the Jebel Ali Free Zone. This entitles you to one residence permit.

The downside of the Jebel Ali offshore company is that the costs are higher than for the other similar options available.

The incorporation process is more time consuming and requires the shareholder to visit the UAE in person, or to issue a legalized power of attorney. This adds to the costs and the paperwork.

An annual audit is obligatory.

The Ajman Offshore Company

Recently, Ajman has created its own offshore regime.

Ajman already offers a very competitively priced and easy to set up free zones entities regime.

The main characteristics of this type of company is the quick incorporation time.

An individual is not obliged to visit the office of the free zone as this can be done by the registered agent. And they have an office in downtown Dubai where one can go to talk to the administrators in person.

The RAK Free Trade Zone (FTZ) Offshore Company

The most popular offshore company in the UAE is the RAK international company offered by the RAK Free Trade Zone (FTZ).

There are a number of reasons why:

  • the set up procedure is relatively easy, and can even be done remotely
  • the costs are low compared to other UAE companies. The same no tax regime applies and these companies can open bank accounts in Dubai
  • all types of business activities can be performed with the RAK offshore company
  • management of RAK FTZ is actively working on getting rules and regulations up to date to make sure they keep providing a very attractive product. They listen to rational arguments of the registered agents and look for improvements

In addition to the above, if you set up a RAK offshore company, you will get a registered office in Dubai. This means that for the outside world it appears as if you have a Dubai-based business and this is a major advantage.

A downside of the RAK offshore company is that amendments to the structure (like a shareholder change) can take a significant time to process.

The RAK Investment Authority (RAKIA) Offshore Company

A company very similar to the RAK FTZ Offshore company is the RAKIA offshore company.

The difference in price and ways to use it is very small.

The set up of RAKIA company is somewhat simpler than that of the RAK FTZ and the requirements somewhat less.

Both RAK FTZ and RAKIA can attest resolutions passed by the board or shareholders after they have been witnessed by the registered agent. Those can be used in order to open a bank account or set up a subsidiary.

Also, getting extracts like a certificate of good standing and incumbency is easy and cheap at RAKIA.

The downside of the RAKIA company is that the procedures with regards to changes in the structure are very opaque.

Since one of the most important aspects of running a business is having clear rules and procedures, this is a very important reason to prefer the RAK FTZ offshore company over the RAKIA offshore company.


International Business Company (“IBC”)

Local Limited Liability Company (“LLC”)

Free Zone Limited Liability Company (“FZE”)





100% foreign ownership allowed

51% of the shares must be held by a UAE national (the “local partner”)

100% foreign ownership allowed

Minimum number of shareholders






Minimum capital




AED 10,000 – 1,000,000 depending from zone to zone


Capital pay-up at inception


Not required


Not required, in principle

Depending from zone to zone

Type of shares

Registered and bearer




Directors: Minimum required Director(s) location


No restriction




At least one director must be UAE resident

1-2, depending on zone

At least one director must be UAE resident

Audited accounts

Not required

Required. To be filed yearly at the time of licencerenewal

Required. To be filed yearly at the time of licence renewal


Prior approval required, some wording sensitive. Ends with “Ltd”



Prior approval required, some wording sensitive. Ends with “LLC”

Prior approval required, some wording sensitive. Ends with “FZE”, FZC” or FZ-LLC”

Time frame for incorporation

1-3 days upon receipt of full documentation

4 weeks upon receipt of full documentation

2-8 weeks upon receipt of full documentation, depending on the zone








Legalization process of POA & corporate documents


Apostile sufficient for RAK IBC. Legalization and super-legalization mandatory for JAFZA

Legalization and super-legalization mandatory

Legalization and super-legalization mandatory


Registered office


Registered agent

Mandatory tenancy agreement on physical premises

Mandatory tenancy agreement on physical premises – virtual office facility available


Shelf companies



Not available

Not available

About the Author

Oneworld MidEast

Oneworld MidEast can offer your business, start up or established the support you need to plan for the future and take make your goals reality. We are a team of specialist staff with extensive experience in international tax planning, corporate planning and support, financial reporting, management consultancy. www.oneworldmideast.net


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