Type of Companies in UAE Accessible to Foreign Investors

UAE OFFSHORE & ONSHORE FREE ZONE COMPANIES

Within each of the UAE’s Free Zones, two types of companies / entities are available. The first kind is the Offshore Company and the second the Onshore / Free Zone Company.

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TYPES OF UAE ONSHORE / FREE ZONE COMPANIES

There are overall three types of Onshore/Free Zone companies:

1. The first are known as the Fee Zone Companies (FZ CO);
2. The second type are Foreign Company Branches or Companies found in other Free Zones;
3. The third type are Free Zone Establishments (FZE), where there can be only one shareholder and is viewed as a personal unlimited liability structure.

Costs and expenses differ according to the Free Zone. The cheapest Free Zone in the UAE is RAKIA Free Zone.

UAE OFFSHORE COMPANIES – LTD COMPANIES

It is significant to mention that the offshore company option is only available in the UAE Free Zones.

Ras Al Khaimah Offshore Company, also referred to as RAK Offshore, is located in Ras Al Khaimah’s RAK Free Zone. The Free Zones Regulatory Authority is RAK Investment Authority (RAKIA) which also oversees and controls Licensed Corporate Services Providers. The beneficial owners’ details are not compulsory allowing owners to remain anonymous. This is the best, cheapest and most flexible structure regarding Offshore Companies.

RAK Free Zone offers the best offshore regime throughout the UAE. This is because it offers complete confidentiality, where beneficial owners are offered complete anonymity and guarantee no disclosure of UBO to local authorities. Additionally, since RAK’s intention is to enhance its growth, it offers offshore companies minimum number of restrictions and regulations and full flexibility. Further, the costs required and procedures needed to set up an offshore company are low and simple respectively.
The RAK Free Zone offers the lowest set up and operational costs annually throughout the UAE.

KEY BENEFITS OF THE OFFSHORE COMPANY

  • Fast incorporation process (2-3 days);
  • No corporate, personal or capital gains tax;
  • 100% foreign ownership;
  • No exchange controls;
  • All income and profits may be repatriated;
  • No requirement for an office in Free-Zone;
  • No public records, hence privacy protection;
  • Open and operate bank account in the UAE;
  • Able to own property in Dubai;
  • Can own investments inside and outside of the UAE.

POPULAR STRUCTURES

Initially an offshore company can be set up for instance in RAK Free Zone, which is then used as the Holding Co of an Onshore Free Zone Company located in any Free Zone in the UAE. The benefits offered are complete anonymity, an investor visa for a three-year period as well as an onshore tax resident status, allowing accessibility to tax treaties and the issuing of a tax residence certificate. Apparently, a foreign individual may also be appointed as a shareholder of a Free Zone Company.

BENEFITS OF FREE ZONE COMPANY IN COMPARISON TO AN OFFSHORE COMPANY

  • Investors and dependants are granted a three-year investor visa;
  • Obtain a tax resident status-allowing accessibility to tax treaties and the issuing of a tax residence certificate;
  • Company is regarded as having commercial and economic substance, which helps in terms of tax planning. Companies are offered real presence, where they have offices (premises), employees and equipment. A flexi office, with a virtual office is also allowed for a low yearly rate of approximately 1000 Euros, in a business friendly and well-organised Free Zone market amongst other actively operating companies. Additional commercial substance is offered for companies which choose to set up in specialised free zones and engage in the specific field or sector. For instance, establish a Media Company in Media City.
  • Ideal for clients who wish to move from the European Union to Dubai where they can benefit from the UAE tax residency status (0% tax jurisdiction).