RAK Offshore Services

Offshore Formation

What is an Offshore IBC?

The definition of an Offshore Company is - a Company which rarely conducts business in its country of origin. In a jurisdiction where taxation is much lower and reporting restrictions are far more flexible than the country in which you reside. Other common names for this type of company are a 'non-resident Company' or 'IBC'. The term IBC stands for 'International Business Company' or 'International Business Corporation'.

Important information about Offshore Companies

An Offshore IBC is an entity (or Company) that can only operate outside the country of its incorporation BUT can trade or operate WITH established ‘mainland’ Companies which have been formed within the same jurisdiction. An example of this would be; an offshore company trading with an LLC or Limited company that has been formed in the jurisdiction of the Offshore Company.

Why incorporate a company offshore?

There are many features and benefits associated with the establishment of a non-resident company, and different individuals and organizations have their own specific reasons for incorporating in this way. Your financial affairs are YOUR business and as such, there should be a level of privacy and confidentiality. Going offshore provides these levels and this is one MAJOR FACTOR to consider when carrying out your ‘due diligence.’

Reasons to incorporate

• Tax Savings
• Confidentiality
• Wealth Protection
• Simplicity
• Cost Effective

Free Zones in the UAE

Free Trade Zones have been set up with the specific purpose of facilitating investment. The procedures for investing in the zones are relatively simple.
The Companies operating in the Free Zones are treated as being offshore, or outside the UAE for legal purposes.
The free zones are suitable for companies intending to use UAE as a regional manufacturing or distribution base, with the bulk of their business outside the UAE.

Free Zone Incentives

• 100% foreign ownership;
• Exemption from all import duties;
• 100% repatriation of capital and profits;
• Freedom from corporate taxation for 50 year;
• Inexpensive energy;
• Efficient recruitment procedures ensuring the availability of a skilled and experienced workforce;
• A high level of administrative support.

LLC’s & Professional Companies

Limited Liability Companies

A limited liability company can be formed by a minimum of two and a maximum of 50 persons whose liability is limited to their shares in the company’s capital. Most companies with expatriate partners have opted for this form of company. In Dubai, the minimum capital is currently Dh. 300,000 (US$ 82,000), contributed in cash. While foreign equity in the company may not exceed 49%, profit and loss distribution can be mutually agreed. Responsibility for the management of a limited liability company can be vested in the foreign or national partners or a third party.

Professional Firms

In setting up a professional firm, 100% foreign ownership, sole proprietorships or civil companies are permitted. Such firms may engage in professional or artisan activities but the number of staff members that may be employed is limited. A UAE national must be appointed as local service agent, but he has no direct involvement in the business and is paid a lump sum and/or percentage of profits or turnover. The role of the local service agent is to assist in obtaining licenses, visas, labor cards, etc…