An offshore company is defined as a company that is incorporated outside the jurisdiction other than where the beneficial owner resides. In other words, an offshore company is easily incorporated in a foreign jurisdiction. The term "offshore" is in contrast with the traditional "onshore" companies which often appears confusing to most people.
A general myth behind why offshore companies is incorporated is that they help evade taxes. On the contrary, an offshore company provides in safeguarding the clients’ interests and assets.
How Do Offshore Companies Work?
An Offshore Company is a legal business entity that is set up with the intention of safeguarding assets and Succession planning.
A corporate entity that is allowed to trade, hold assets, and conduct normal business activities legally outside of the jurisdiction where it is incorporated is called as Offshore Company. Offshore countries offer a robust tax structure to companies which are incorporated within the jurisdiction with a multi-fold governance structure.
Benefits of having an offshore company
Offshore companies offer numerous benefits for business owners.
To list a few:
- Greater asset protection
- Privacy
- Legal protections
- Simple Governance structure and corporate policies.
- Ease of operations
Topmost sought-after Offshore Company Jurisdictions:
- UAE
- Mauritius
- Caymen Islands
- Hong Kong
- Cyprus
Starting an offshore company in the UAE is an ideal and cost-effective way to expand your international business without enormous administrative obligations.
The United Arab Emirates: A Popular Offshore Jurisdiction UAE has been the most Preferred destination
for business owners and entrepreneurs to start their businesses in UAE. The United Arab Emirates has a well-
established reputation as a stable and tax-haven jurisdiction, UAE has never failed to comply with all international
requirement on anti-money laundering regulations and has never been black listed as a country.
The country also has not signed the directive agreement with the OCED (Organization for Economic Co-operation and Development).
About this fact, the offshore companies registered in the UAE today are one of the most competent protection instruments of
confidentiality and investors right. In addition to it, UAE has a dependable and balanced banking system for the business of
offshore companies in UAE.
RAK International Corporate Centre (RAK ICC)
Ras Al Khaimah (RAK) is approximately an hour’s drive from Dubai and is one of the fastest-growing Emirates in UAE. The Corporate Registry for offshoring companies was launched by the government of Ras al Khaimah in 2006 as RAK ICC. This authorized the formation of International Business Companies (IBC) in the UAE.
RAKK ICC is considered as one of the best in UAE for incorporating a Offshore Company. The following are the Key features of RAK International Corporate Centre (RAK ICC).
- A RAK offshore company does not require any local shareholding.
- Establishing a Foundation or Trust.
- Enhanced governance structure.
- Succession Planning and Asset protection.
- While there is a general prohibition on conducting business within UAE, RAK offshore companies can buy shares of local UAE companies.
- To perform regular international transactions a RAK offshore company can hold a multi-currency offshore bank account in the UAE.
- A RAK offshore company formation doesn’t require you to file your annual audit report.
Procedure to Start an Offshore Company in RAK ICC (UAE)
The United Arab Emirates needs to go through a certain set of processes for starting an offshore company Dubai has an easy and un-complicated process for the formation of an Offshore Company, which can be completed in a matter of weeks. The steps are as follows;
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1. Select a Company Name
The Registrar will initially verify the name of the company. The company name must not include the following words: insurance, bank, building society, cooperative, fund, Municipal, Chamber of Commerce, trust, Royal, chartered, finance, mutual fund,
Emirate, and Emirates. The word Ltd or Incorporated shall be mentioned at the end of the company’s name.
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2. Fill an application.
After selecting the respective company name, one needs to fill up the application form by submitting a set of relevant documents, which includes:
a. Identity proof of the shareholders and directors.
b. Address proof of the shareholders and directors.
c. CV of the shareholders and directors.
d. Well-drafted business plan.
e. Photocopies of the shareholders and directors.
f. The document submission differs between the individuals and the corporate business entities.
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Submission of the Concerned Documents
The concerned authority will review the respective document after submitting and the same, authority will issue the relevant approvals.
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4. Draft the MOA and AOA
The document is reviewed by the authority once prepared and submitted and upon approval the company can be started. The Memorandum of Association (MOA) and the Articles of Association (AOA) are to be drafted in the English language once the approval is obtained, which is practical for international business.
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5. Open an Offshore Bank Account
The final move is to open an offshore bank account, which helps the business owners to carry out the business transactions at ease. The offshore jurisdictions also help the business owners to open an offshore company and an offshore bank account in different locations. The same process can be applied to open an anonymous offshore bank account.
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6. Local Offshore Agent
A local offshore agent is registered under RAK Offshore Authority.
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7. Minimum Share Capital Required
There is no minimum share capital requirement for anyone to set up an offshore company in the UAE.
Forming an offshore company in the UAE is a legitimate medium to help your business grow. You can utilize the relaxed regulations and thrive in a tax-free business ecosystem. Offshore companies allow 100% foreign ownership and are great for asset protection and privacy. Though setting up an offshore company offers vast benefits from a business perspective, it is to be noted that there should be a proper structure in place. A structural advisory helps in understanding the current and future needs of the business.
Aspects such as business size, objectives, current requirement, and other factors all taken into consideration would amount to a detailed structure advisory that would enable you to decide whether an offshore company would be advisable. With great experience of setting up offshore companies in UAE, Water and Shark will assist you in all procedures from start to end for opening a foreign company UAE.
Water and Shark is Global Advisory firm that specializes in Structural Advisory, International Corporate Law, Tax and Regulatory Services and Accountancy. Our team of experts would assist and guide you through all the procedures and compliances. At Water and Shark, our top priority is delivering to customers requirements and providing world class services.
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