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Offshore company setup in Dubai: 2024 Guide

Dubai is an international business hub, and so it is no surprise that many companies and individual entrepreneurs choose to set up offshore companies in the emirate. With fantastic tax and privacy benefits, plus easy setup procedures, it can be a very attractive option.

Offshore company formation is just one of several opportunities for business setup in Dubai – others include mainland and free zone companies. So, what makes starting an offshore company in Dubai a good option, and who is it most suitable for? In this blog, you will learn all about offshore company setup in Dubai for 2022:

Table of Contents

    • • What is an offshore company in Dubai, UAE?
    • • Benefits of setting up an offshore company in Dubai, UAE
    • • Documents required to start an offshore company in Dubai, UAE
    • • Steps to start an offshore company in Dubai, UAE
    • How much does it cost to set up an offshore company in Dubai?

What is an offshore company in Dubai, UAE?

An offshore company in Dubai is a business that is registered in the UAE for tax purposes while carrying on its business activities outside the country. They are limited liability companies, which means your finances are well protected.

People choose to start offshore companies in Dubai for several different reasons, but perhaps the main reason is that they don’t need to pay any corporate tax in the UAE on profits generated elsewhere. If the company stayed in its original jurisdiction, it would pay more tax, so starting an offshore company here can potentially save thousands of dollars in tax.

For example, imagine an international business consultant who does lots of business in a few different countries in the Middle East. They don’t wish to pay tax on their profits in all those different countries or deal with all the complex paperwork and filing requirements. They therefore choose to set up an offshore company in Dubai where they pay no tax, and can continue working internationally.

A shipping company from another Middle Eastern country might decide on an offshore company registration in Dubai to avoid paying so much tax in their home country. A general trading firm might set up an offshore company to escape political volatility in its original base.

Meanwhile, an entrepreneur from Southeast Asia who does most of their business in the GCC might choose to base their offshore company in Dubai – this would let them carry on international trading from a regional trading hub rather than their home country, which is further from their main business partners.

Common types of businesses that start offshore companies in Dubai include:

    • • Property holding firms
    • • IP (intellectual property) holding companies
    • • Shipping firms
    • • General trading companies
    • • Online advertising companies
    • • Distribution and logistics firms
    • • General (international) trading companies
    • • Professional services and consulting
    • Various types of brokers

It’s important to be aware that offshore companies can be based in Dubai, but they cannot do any trading inside the country, or employ people in the UAE; all business they carry on must happen strictly outside the UAE. If you want to trade in the UAE or with partners here, you would need to open a mainland company or a free zone company.

It’s also important to know that offshore companies are prohibited from carrying on certain kinds of business – including things like aviation, media, or insurance, for instance. Finally, offshore companies must, of course, carry on legal business! You will be required to undergo Know Your Customer (KYC) checks when setting up your company. If the business is suspected of any illegal activities, it can be investigated by the authorities.

Benefits of setting up an offshore company in Dubai, UAE

Setting up an offshore company in Dubai provides a wide range of benefits to entrepreneurs, holding companies, and consultants. These include:

• Low or no tax

Offshore companies in Dubai pay no tax on their profits. You won’t pay corporate tax, income tax, sales tax, inheritance tax, property tax, or personal tax either. All this means more money to retain and reinvest in your business.

• Bank account
You will be able to open a UAE bank account and hold many different currencies.

• Expand internationally
Dubai offshore companies provide an opportunity for expanding internationally.

• Stable base
Dubai is regarded as an exceptionally stable place, in economic, social, and political terms. It also has a strong rule of law, so your assets will be protected.

• Privacy
An offshore company does not need to be audited, nor must it publish its accounts. This makes them very private vehicles.

• Access to funding
Since Dubai is a highly respected location, it means your business may find it easier to access global funding than if you were based in less trusted jurisdictions.

Documents required to start an offshore company in Dubai, UAE

If you would like to start an offshore company in Dubai, you will need to compile several key documents:

• A business plan
• Bank statements
• Your address (utility bills will do fine)
• Copies of all shareholders’ passports
• Three options for your business name that comply with local business naming rules
• A description of your business activities

Steps to start an offshore company in Dubai, UAE

If you would like to start an offshore company in Dubai, you must follow these steps:

1. Choose your company name

It must conform to certain rules around company naming in the UAE.

2. Fill in your application form

When applying to start an offshore company, you will need to submit an application form along with the documents mentioned above.

3. A draft MOA and AOA

You must draft your Memorandum of Association (MOA) and the Articles of Association (AOA).

4. Open your onshore bank account

Next, you need to open your onshore bank account.

At Creative Zone, we’ve helped many companies start offshore businesses in Dubai, and can advise you on all the steps required in greater detail.

How much does it cost to set up an offshore company in Dubai?

The cost of setting up an offshore company depends on the complexity of your business, how many shareholders you have, and if visas are required. That said, as a rule of thumb, you can expect to pay at least AED 12,500 to start an offshore company in Dubai. This might feel relatively expensive – but remember that the fees pay for themselves very quickly, since you won’t be paying tax on your profits elsewhere.

Working with Creative Zone

At Creative Zone, we have helped countless offshore companies who were looking to set up in Dubai over the last decade. Thanks to our expertise with business setup in UAE, we can advise you on all aspects of starting an offshore business in Dubai, including which forms and documents to provide, checking for mistakes, and walking you through every step of the process.

What is more, we can also provide you with several other services that will make running your company even easier:

• Dedicated business setup manager
• Tax Preparation
• Legal advice
• HR management
• Opportunities for business networking

Contact Creative Zone today for all the support you need with setting up an offshore business in Dubai in 2024!

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