How to Set Up an Offshore Business in Dubai?

For global entrepreneurs and investors alike, the UAE represents a valid contender for setting up an offshore company. Such entities may be registered in the UAE, but carry their business activities in another country outside its borders, thus offering a package of financial privacy, asset protection, and tax advantages. This guide aims to provide an all-inclusive outlook on the setup of an offshore company in Dubai in 2025.

1. Introduction: What Is an Offshore Company & Why Dubai?

An offshore company in the UAE constitutes a legal business entity set up in a jurisdiction such as Dubai in order to operate internationally. Unlike mainland or free zone companies, they are prohibited from conducting business within the UAE; they are, however, perfect for international trade, wealth management, and asset protection.

Some principal advantages of a Dubai offshore company include:

• 0% Corporate Tax: On income generated outside the UAE.
• 100% Foreign Ownership:  No local sponsor or partner is required;
• Privacy and Asset Protection: The names of shareholders and directors remain undisclosed to the public, thus providing a high level of confidentiality. 
• Global Recognition:  An offshore company registered in Dubai proves all credibility over the globe. 

2. Offshore Jurisdictions in the UAE: Which to Choose?

The UAE has different offshore company setting-up options that offer their regulations and benefits. 

• Jebel Ali Free Zone (JAFZA) Offshore: The offshore jurisdiction with great repute is well placed for big businesses and holding companies. The prominent merit is that JAFZA offshore-registered companies can own freehold property in Dubai, in designated areas.
• RAK International Corporate Centre (RAK ICC):  Cost-effective, fast incorporation, and a modern legal framework make the possibility of business formation in Ras Al Khaimah a quite attractive feature of setting up an offshore company there. Hence, it turns into a highly estimable jurisdiction for international trading, asset holding, and consultancy services.
• Ajman Offshore: Regulated by the Ajman Free Zone Authority, registered at record speed and extremely affordable costs, this is particularly well-suited for new and small businesses.
• Abu Dhabi Global Market (ADGM): A financial free zone, ADGM also has an extremely sophisticated offshore regime, especially for special purpose vehicles and holding structures.

3. Who Should Use an Offshore Structure? Use Cases & Restrictions

A UAE offshore company may be utilized for many purposes regarding international business.

Suitable Use Cases:

• Holding Company: Owns shares or global assets like properties or investments.
• Intellectual Property (IP) Ownership: Best suited to hold and license patents, trademarks, and copyrights.
• International Trading: Import-export businesses with global e-commerce platforms.
• Investment and Fund Management: A safe environment for hosting global investments.

Restrictions:

• No Local Trade: Offshore companies cannot conduct business within the UAE mainland.
• No Physical Office: They cannot lease a physical office in the UAE.
• No Visa Sponsorship: Offshore companies are not eligible to sponsor residency visas for their employees.

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4. Legal Structure & Ownership Rules

The legal framework relating to an offshore company is flexible in the UAE and easy to operate.

• Structure: A typical offshore company normally requires a minimum of one shareholder, one director who may be the same person, and a legal secretary is also compulsory.
• Shareholders: Can be individuals or corporate entities.
• Minimum Capital: There is normally no minimum capital requirement, but it can differ from jurisdiction to jurisdiction.
• Anonymity:  Shareholder and director details are kept secret and not in any public registry, ensuring a high privacy level.
• No Local Sponsor: 100% foreign ownership is allowed with no need for a UAE national as a partner.

5. Required Documents & Setup Process

Streamlined and fast process of setting up an offshore company:

Required Documents for Individual Shareholders:

• Copies of passports of shareholders and directors;
• Proof of address (recent utility bill);
• Short CV or professional history of the shareholders;
• A bank reference letter.

Required Documents for Corporate Shareholders:

• Full set of attested incorporation documents of the parent company.
• Board resolution to set up the offshore company.
• Certificate of good standing of the parent company.

Setup Process:

1. Choose a Jurisdiction and Registered Agent: Choose an offshore authority and appoint a licensed registered agent; this is a mandatory requirement.
2. Name Approval: Propose and reserve a unique company name.
3. Submit Documents: Your registered agent will apply with the required documents.
4. Incorporation: You will get the certificate of incorporation and other corporate documents.

6. Timeline: How Fast Can You Incorporate?

Generally, it takes no more than 3 to 7 business days for incorporation. Expedited options may be available. This should be considered on a case-by-case basis since you might have to allow some extra time for the opening of the corporate bank account, as the process requires enhanced due diligence.

7. Cost Breakdown: Setup & Annual Renewal Fees

It varies according to the jurisdiction where you intend to set up your offshore company.

• JAFZA Offshore: Start-up costs about AED 18,000 for one-time setup.
• RAK ICC and Ajman Offshore: Setup costs are generally lower, probably as low as around AED 12,000.
• Annual Renewal Fees: They usually range between AED 5,000 and AED 10,000.
• Registered Agent Fees: There will be additional fees for registered agent services and documentation.

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8. Banking & Compliance Considerations

Opening a corporate bank account, offshore companies can qualify to open corporate bank accounts in the UAE; however, the process has a higher level of due diligence by the financial institutions concerned.

• Bank Account Opening: You require comprehensive documentation, including corporate documents, details of shareholders and directors, and a business plan. The banks known to be offshore-friendly are Emirates NBD, Mashreq Bank, and RAKBANK.
• Annual Record Keeping: Most offshore jurisdictions do not need a formal audit; however, they still require proper financial documentation for auditing.
• Compliance: Offshore companies must comply with the UAE provisions against money laundering and the ultimate beneficial owner regulations.

9. Comparison: Offshore vs. Free Zone vs. Mainland

Feature	Offshore Company	Free Zone Company	Mainland Company
Visa Eligibility	No	Yes	Yes
UAE Market Access	No	Limited to the free zone	Full access
Cost	Lower	Moderate	Higher
Office Requirement	No physical office	Required within the free zone	Mandatory physical office
Foreign Ownership	100%	100%	100% for most activities
Corporate Tax	0% on foreign income	0% for qualifying income	9% on taxable income above AED 375,000

10. Advantages & Limitations of an Offshore Setup

Advantages:

• Privacy and Confidentiality: A high level of protection for the identity of the owner.
• Cost-Efficiency: Lower setup and maintenance costs as compared to the onshore option.
• Asset Protection: The strong legal framework to protect assets against claims from outside.

Limitations:

• No UAE Visa: The owners and employees are not eligible for visas for residency.
• No Local Trading: Forbidden to trade within the UAE.
• Limited Activities: Mostly appropriate for international and holding activities.

11. Real-World Insights & Cautions

User testimonies often underscore the importance of a clear understanding of the total cost of ownership. While setup fees are a once-off charge, annual renewal expenses will run about $4,000-a-setting, including registered agent fees. It is equally important to be cautious about scams and work only with agents who are duly licensed and registered.

12. Scenarios: When to Choose Each Jurisdiction

Scenario	Recommended Jurisdiction	Estimated Budget (Setup)
Holding Company for Dubai Real Estate	JAFZA Offshore	AED 18,000+
International Consulting or E-commerce	RAK ICC	AED 12,000+
Intellectual Property Holding	RAK ICC or Ajman Offshore	AED 12,000+
Cost-Sensitive Startup	Ajman Offshore	AED 11,500+

13. Tips to Maximize Value & Avoid Pitfalls

• Use a Licensed Agent: Always verify that your corporate service provider is a licensed registered agent.
• Separate Government Fees: Request a clear breakdown of all government fees and agent service charges.
• Confirm Renewal Structure: Understand the annual renewal costs and clearly stated, before choosing your agent, in order to avoid surprises.
• Maintain Records: Maintain truthful financial and corporate records for at least 10 years.
• Due Diligence: Conduct thorough searches on the reputation and performance of your chosen registered agent.

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14. Next Steps & Incorporation Checklist

1. Select Jurisdiction: Choose the offshore jurisdiction that suits your business requirements the best.
2. Prepare Documents: Collect all personal and corporate documents.
3. Engage a Registered Agent: This is a licensed agent to carry out all aspects of the incorporation process.
4. Submit Application: Your agent will apply to the relevant authority.
5. Open Bank Account: Upon incorporation, commence the corporate bank account opening procedure.
6. Plan for Compliance: Ensure you have a system for annual renewals and record keeping.

15. How Arnifi Can Help

For navigating the intricacies of establishing an offshore company in Dubai with an expert touch, rnifi partners with you in this endeavor. Our experienced consultants support you end-to-end, from identifying the best jurisdiction for your company-whether it be JAFZA, RAK ICC, or Ajman-to handling your entire documentation and application process. Also, we will act as your registered agent to keep the incorporation process seamless and compliant. Beyond the setup, Arnifi helps with an important step in the process: the opening of a corporate bank account. Furthermore, our advisory services are aimed at ensuring that your offshore entity always remains in good standing, allowing you, with peace of mind, to maximize its benefits of privacy, asset protection, and tax efficiency.