An offshore company is incorporated in one jurisdiction but runs its business somewhere else. In the UAE it is mainly used to hold assets and manage international trade, and it works very differently from a company that trades locally.
What it is
An offshore company is registered in one place and operates elsewhere. In the UAE, the people who use them are usually looking for a simple holding or international trading vehicle with a clean structure and good privacy practices.
Why Dubai is popular
- Competitive tax environment
- Political stability
- Proximity to trading partners
- A mature business community
- Access to wealth and investment management
- Confidentiality
What it can and cannot do
It can: hold assets such as intellectual property, shares or real estate, run international trading, own a bank account in the company's name and act as a holding or investment company.
It cannot: trade inside the UAE, hold a UAE trade licence or employ staff under a local licence.
Typical uses
Holding companies, international trading companies, investment vehicles, intellectual property holding, shipping, distribution and logistics, software and online businesses, professional consulting, brokerage and real estate holding.
Restricted activities
Some sectors, such as aviation, media and insurance, are generally not allowed. Every application goes through know-your-customer checks to confirm that the activities are lawful.
Benefits
- Up to 100% foreign ownership
- Multi-currency bank accounts
- A stable business environment
- Privacy over ownership records, within the law
- A route to holding intellectual property and property
Be careful with claims that an offshore company is tax-free or cannot be audited. The tax position depends on where the company is managed and controlled and on the UAE and foreign rules that apply to its owners. Take advice before you rely on any tax outcome. See our corporate tax services.
How to open one
1. Choose the company name, with three options in case the first is taken. 2. Submit the application with a short description of the business. 3. Prepare the required documents. 4. Draft the memorandum and articles of association. 5. Open a bank account. 6. Pay the setup fees. Fees vary by registrar and structure, so ask for a written quote.
Documents
- A business plan (not always mandatory)
- A six-month bank statement or an original bank reference letter
- Shareholder CVs and passport copies
- Proof of address, such as a utility bill
- Three business name options that meet the naming rules
- A description of the company's operations
Banking can be the hardest part, because banks run their own checks. See our article on offshore companies in the UAE and our business setup service.
Key takeaways
- An offshore company can hold assets and trade internationally but cannot trade inside the UAE.
- Banks run their own checks, so plan the banking early.
- Get tax advice before assuming any tax outcome.
Frequently asked questions
Can an offshore company trade in the UAE?
No.
Can it employ staff?
Not under a local licence.
Is an offshore company automatically tax-free?
Not automatically. The tax position depends on the structure and where it is managed and controlled.
Talk to a chartered accountant
Questions about your own situation? Reach us directly and we will reply with clear next steps.
This article is general information and not advice for your specific circumstances. Rules and thresholds change, so confirm the current position before you act.
