Dubai Offshore Companies and their Tax Liabilities
Dubai holds up well against the other tax haven states. As a bonus it also has about 45 tax treaties (as it’s classed as part of the United Arab Emirates), which is rare for a tax haven, although these tend to mainly benefit Dubai companies allowing reduced withholding taxes on dividends and restricting tax overseas. It’s also on the OECD ‘white list’ for having numerous exchange of information treaties.
GBC can incorporate Dubai companies with a choice of offshore bank accounts at the time of formation. We work closely with a number of banks, including Barclays, Standard Chartered,ENBD , RAKBANK, MASHREQ ,UAB and ADCB in UAE.
GBC are able to incorporate a Dubai offshore company (RAKIC or Jebel Ali Free Zone). Company formation normally takes up to 5 days to register.
A Dubai registered company offers very good privacy and confidentiality, particularly given the fact that Dubai has no information exchange treaties. A minimum of one shareholder and one director is required to comply with company formation regulations in Ras Al Khaimah Free Trade Zone. There is no restriction on the maximum number of shareholders, and corporate shareholders are allowed. There is no register of shareholders or directors with Ras Al Khaimah company formation and therefore complete anonymity.
As a result Dubai companies are favoured in asset protection schemes. If this was your motive in using a Dubai company though you would need to consider the impact of any double tax treaty. These will often contain exchange of information provisions and can be used by overseas tax authorities to request information from the Dubai tax authorities.
A common technique, particularly for e-commerce businesses, is to form an offshore company such as a Panama or British Virgin Islands IBC and to register it in one of the free trade zones. The Dubai Internet City (DIC) is a free trade zone specifically for ecommerce business. This would then guarantee no Dubai taxes for 50 years.
The combination of Dubai and a good offshore jurisdiction such as the British Virgin Islands would ensure that there would be no disclosure of shareholders and only limited disclosure of the directors (potentially only nominee directors) so reinforcing the asset protection benefits.
The minimum capital requirement of a RAKIC is AED1,000. Share capital must be denominated in UAE Dirhams (AED) divided into shares of AED1,000 each. Dubai offshore companies may create different classes of shares in one or more series having their own rights, privileges, restrictions and conditions specified. Bearer shares can be issued but must be lodged with the Registered Agent. The Registered Agent must maintain the particulars of the beneficial owners of the company.