UAE Types of Companies / Entities are available to Foreign Investors
Within each Free Zone there are 2 types of entities: Offshore and Onshore / Free Zone.
In the case of Onshore / Free Zone type, generally there are:
- Free Zone Companies “FZ CO”,
- Branches of Foreign Companies or Companies in other Free Zones and
- Free Zone Establishments “FZE” (unlimited liability personal establishment / one shareholder)
Costs vary from Free Zone to Free Zone with the cheapest being RAK Free Zone.
Offshore Companies (Ltd companies)
Note that only some Free Zones have the offshore company option.
- Ras Al Khaimah Offshore Company (“RAK Offshore”) at the RAK Free Zone in Ras Al Khaimah Emirate (40” drive from Dubai), the Regulatory Authority being RAK Investment Authority (“RAKIA”), which also regulates Licensed Corporate Services Providers, such as ourselves. No details of beneficial owners are required / anonymity. This is a better, cheaper and more flexible regime for Offshore Companies.
- Jebel Ali Offshore Company at the Jebel Ali Free Zone in Dubai, the Regulatory Authority being the Jebel Ali Free Zone Authority (“JAFZA”). Details and bank references of beneficiaries are submitted to the authority.
Popular structure for Free Zone Companies
A very popular structure is to first set up offshore co (e.g. in RAK) and then use THAT to be the holding co of a free zone onshore co in any free zone of choice. Result: anonymity PLUS 3 year investor visa PLUS onshore tax resident status with access to tax treaties and issue of certificate of tax residence.
Costs and fees for this structure start from 31.000 USD$ (euro: 23.000) in the first year and 17.000 $USD (euro: 12.500) in subsequent years.
Advantages of a Free Zone Company compared to an Offshore Company
- Entitlement to a 3-year investor visa for each investor (and dependants)
- Onshore tax resident status with access to tax treaties and issue of certificate of tax residence
- Commercial and economic substance which is VERY useful for tax planning: real presence (with premises, staff and equipment – ‘flexi office’ with virtual office permitted for a low annual cost – apprx. 1.000 Euro per year) in an organised market / free zone with local presence among other active companies. Added commercial substance also if we opt for specialised free zones in the specific field of our activity (e.g a media company operating in “Media City” Free Zone where hundreds of companies in that sector are established and operating). Surely this is better that a P.O. Box address in an empty apartment in Malta or Cyprus.
- Perfect if the client also wants to move out of EU and also live in Dubai and pay no tax (non EU tax resident = best and most effective tax planning nowadays)
Why do we prefer RAK Offshore and RAK Free Zone Companies
(Note: We are authorised and in a position set up structures in ALL regimes / Free Zones)
- Its offshore regime is the best in UAE as it was allowed to give total confidentiality (100% anonymity and no disclosure of UBO to authorities) and minimum rules / restrictions and maximum flexibility as this is a developing, poorer, emirate so to boost its growth – offshore company set up costs are the lowest and quick / simple procedures
- The set up cost and cost of operation of its free zone companies per year is the LOWEST in the UAE
- Note here that in some cases we choose and set up a different Free Zone because of commercial reasons, usually the existence of a special free zone to exactly match the type of the client’s business. For example Hedge Funds in the DIFC, Gold traders in the DMCC etc.
Can FBS set up UAE offshore companies and ALL forms of companies AT ALL THE FREE ZONES?
Yes, we have all necessary regulatory licenses and expertise.