JAFZA Offshore Company Setup
An Offshore Company is a legal business entity. It is formed with the goal of conducting business outside of its registered jurisdiction and/or ultimate ownership location. JAFZA offshore company setup is an example of these offshore companies. There are a variety of reasons to form an offshore corporation; however, the following are some of the most common advantages:
- Providing a market entry point for worldwide expansion;
- Access to a judicial system that is both reliable and business-friendly;
- Access to a more accommodating regulatory environment;
- Offering tax neutrality on overseas earnings in terms of personal or corporate income, capital gains, and inheritance taxes (depending on the jurisdiction);
- Providing easier access to global capital;
- Providing a vehicle for separating or protecting assets from functioning entities, such as Intellectual Property.
Ras Al Khaimah (RAK) and the Jebel Ali Free Zone are the two main jurisdictions in the UAE that offer Offshore Companies (JAFZA). Both are “tax-free” jurisdictions. Hence, they have no income or corporation taxes and allow 100% foreign ownership.
JAFZA Offshore company setup can open multi-currency accounts in the UAE and conduct international business. The other offshore companies are, however, prohibited from doing business with UAE residents or having physical locations in the UAE.
JAFZA has its own set of advantages as JAFZA is the only Offshore Company that is legally able to acquire property in Dubai.
Offshore companies in the UAE are not like free zone companies in the UAE. Onshore companies that are allowed to do business in Dubai under certain circumstances are known as free zone companies. They are likewise subject to a corporate tax rate of 0%. They can, however, apply for residence in the UAE for their shareholders, directors, and employees.
JAFZA Offshore Company setup is required by local company legislation to hire an approved registered agent (Sovereign Corporate Services is approved for this purpose).
Incorporation Of The JAFZA Offshore Company Setup
In 1985, the JAFZA was established. It is an industrial region surrounding the Jebel Ali Port, one of the world’s largest shipping ports. This allows multinational enterprises based there to take advantage of the free zone’s specific benefits. Corporations have a 15-year tax-free period, there is no personal income tax, no import or export taxes, no currency restrictions, and labour recruitment is simple.
Jebel Ali is located just outside of Dubai and is roughly an hour’s drive from Abu Dhabi, the country’s capital. The Al Maktoum International Airport, which is planned to be the world’s biggest airport in terms of both passenger and freight volume, is located just beyond the port region.
Under the Jebel Ali Free Zone Offshore Companies Regulations 2003, the Offshore Company was founded in 2003 by the Jebel Ali Free Zone Authority (JAFZA) in partnership with the Dubai Government.
Main Characters Of JAFZA Offshore Company Setup
- Shareholder — There must be the presence of at least one shareholder at all times. Stakeholders are allowed in corporations. International corporate stakeholders must authenticate all corporate paperwork.
- Corporate directors are not permissible, although a minimum of one director is necessary. No information about the directors is provided by the public registration
- A secretary is required in every business.
- Capital of Share – There is no minimum share capital required.
- Annual Reporting – Financial records must be retained for 10 years from the date they were created. The company must appoint an auditor to examine and report on accounts (from a pre-approved list).
Advantages Of Registering An Offshore Corporation In JAFZA
- 100% Foreign Ownership – The JAFZA Offshore Companies Regulations allow for 100% foreign ownership;
- Local Real Estate Ownership – The JAFZA Offshore Firm is the only offshore firm that is permitted to directly own local Dubai real estate. Most properties in Dubai can be owned by JAFZA offshore businesses, however both Free Zone and developer authorization is required.
- Offshore Companies are allowed to own shares in both Free Zone and Onshore (LLC) Companies, despite the fact that they are forbidden from doing business with UAE residents. Attestation is not required for documents used in the United Arab Emirates, Bahrain, Saudi Arabia, or Qatar.
- Local Bank Account – An offshore corporation can create multi-currency bank accounts in the UAE to perform routine international transactions.
- Information about shareholders and directors – The names of shareholders and directors are not obliged to be placed on a public registry.
- Examination – The registrar has the power to appoint inspectors to examine the business of an Offshore Company. All inspection costs may be borne by the company’s owner.