Offshore or offshore zone is the territory of the state, in which entrepreneurs are given the opportunity to register companies and conduct business on favorable terms. Companies that are open in such zones are also called offshore. Thus, the country’s leadership gets an opportunity to attract investment in the economy. One of the most important features of the offshore zone is a ban on doing business in the rest of the country. The opportunity to avoid paying high taxes on the territory of their state attracts the capitals of businessmen from all over the world to offshore. Today, we know about 80 offshore zones, which, according to rough estimates, managed to attract about 20 trillion dollars of investment. In this list, a special place is occupied by the offshore companies in the UAE.
Offshores in the UAE
In the middle of the twentieth century, the UAE was a deserted desert with a small number of poorly developed cities. After the beginning of hydrocarbon production, the revenues from their sale flowed into the treasury. The cities’ development stimulated the economy and pushed the country’s leadership to create Free Economic Zones. The advantages of investing in the FEZ attract more and more entrepreneurs every year.
Advantages of an offshore company in the UAE
The next advantage is the minimum number of visited instances. The company’s opening in an offshore can be done quickly and easily thanks to a simplified registration procedure. The activities of enterprises in offshore are not subject to strict regulation, so the entrepreneur saves significant funds for obtaining licenses, performing audits, etc.
One of the most important advantages that attract businessmen to offshore zones is the low tax rate. Usually taxes either have a fixed rate, which does not depend on the company’s cash turnover, or its size is zero. In the UAE’s Free Economic Zones, the second version of the tax system operates, which is the reason for opening the company in a Free Economic Zone.
Specificity of the offshore company
There should be at least three employees in the staff. There are no special claims to citizenship, but they must occupy the positions of the head of the enterprise and the secretary. Another member of the company must own shares. The enterprise can arrange the issue of shares of different types. This can be both registered shares, and bearers’. At the same time, the possibility of conversion is preserved.
The enterprise has no restrictions on the right to own assets of other companies and to place accounts in other countries. All disputable issues that arise between shareholders can be resolved according to the legislation of another country, if such decision is taken by all the shareholders of the enterprise.
There are no requirements to the size of the authorized capital, but its size should be indicated in a fixed currency. The activity of the enterprise does not require licenses, but there are restrictions. The company cannot conduct business in such areas as banking and insurance. Another feature of the offshore company is the absence of requirements to conduct audit and shareholder meetings in the UAE.
Free Economic Zones
Before visiting an offshore in the UAE and open an offshore company, you need to choose a Free Economic Zone. Today, 31 Free Economic Zones operate in the UAE, which attracts both entrepreneurs and wage workers. FEZ works in such cities as Abu Dhabi, Dubai, Sharjah, Fujairah, Ajman, Ras Al-Khaimahh and Um al-Quwain.
The total costs for the registration of the enterprise start from 2.5 thousand dollars. The following should be submitted to the registration commission:
- the enterprise founder’s passport copy;
- a document that confirms the information on the place of residence and registration of the founder;
- information on financial activities from the banking structure.
Entrepreneurs can open the enterprise personally, but it is also possible to use the services of other companies that will be engaged in processing all necessary documents.