Dealing in Dubai –– the New Offshoring Hot Spot
Skyscrapers, dune buggies, 6-star luxury and exotic bazaars. Dubai has it all and more…like, for instance, mainland LLCs, free zones and offshore companies.
First, it’s important to understand the requirements and benefits of these three different options:
- Offshore Companies are permitted to open multi-currency accounts in the UAE and carry out business internationally (the UAE has Double Tax Treaty agreements with over 40 other countries). They may not, however, carry on business with persons resident in the UAE or have physical premises within the UAE.
- The two principal jurisdictions offering Offshore Companies in the UAE are Ras Al Khaimah (RAK) and the Jebel Ali Free Zone (JAFZA). Both RAK and JAFZA have their own specific benefits. RAK is the more cost-effective of the two, but JAFZA is the only Offshore Company that is legally permitted to own property situated in Dubai. Both are “tax-free” jurisdictions that levy no income tax or corporate tax and permit 100% foreign ownership.
- Free Zone
- On the other hand, Free Zone Companies are onshore entities permitted to carry out business in Dubai with certain restrictions. They are similarly subject to the 0% rate of corporate tax but they enable their shareholders, directors and employees to obtain residency in the UAE.
In this month’s edition of LIBpreneur, we look at Dubai and why it’s still one of the best places to open a foreign bank account and incorporate an offshore business –– especially now that the country is not on the EU blacklist anymore.
For non-subscribers, here is the short version, as well as reasons why Dubai is probably not the best place to raise your residency flag if you’re libertarian minded. Well, not if you plan to actually “live” where you have residency that is.
Offshoring to protect your assets and your privacy is becoming increasingly important. If you want 100% tax exemption, 100% ownership and low operational costs Dubai is the new hot spot for business and banking diversification.
And if you don’t mind the heat or the fact that flashing a middle finger in traffic could get you deported, spending a year in the most luxurious city in the world doesn’t sound too bad.