Hello, everyone, welcome to the 3rd video of Module 4. Today we talk about registering a company in UAE offshore.
As you know there are 3 major types of companies in the UAE: LLC, free-zone and offshore. If you still doubt which one to choose – you are welcome to come back to Module 1, Section 1.6. to refresh your knowledge.
So coming back to registering an offshore. There are only 3 offshore zones in the whole UAE available to register an offshore company. One in the emirate of Dubai (JAFZA offshore), one in the emirate of Ajman (Ajman offshore) and one in the emirate of Ras al Khaimah (RAK Offshore). So, what offshore to choose out of 3? What would suit you best?
The most expensive offshore is located in Dubai – JAFZA offshore – it will cost you around USD 5,500, Ajman offshore is the cheapest one - around USD 3,300, and RAK offshore is in the middle - around USD 3,900. Why all these figures are not fixed you may ask. Why I am saying “around” all the time? Because every time each service provider will charge you different price. Need more clarity? Ok.
You may ask: “Why do I need all these providers MT? “Can’t I just go directly to offshore registration center and do it on my own?” The answer is NO. Because if you decide to open an offshore company you will not be able to do it on your own as individual. The process is set in a way, that only AUTHORIZED companies, the so-call REGISTERED AGENTS, are allowed to register new companies in offshore. And this rules applies worldwide, not only in the UAE. Moreover, when you need a registered agent company to execute the procedure - there is one interesting peculiarity behind that. Offshore Registrar cannot provide you with its own address or address of its business center. So what address is mentioned there? Every offshore license has the address of the registered agent’s company. That is why you need registered agent.
If you come as individual to register your offshore company to governmental office you will not be able to do that (you are individual and don’t have corporate address). So, instead, you HAVE TO find an authorized agent that can help you register an offshore company, that is why I mentioned rough estimation rather than fixed prices for offshore company registration services. There are many companies that render such services – and the prices differ every single time. Hope now it became clearer.
Once you understand that the prices are different, you need to think about what is the main purpose of having an offshore company? In general, if you are planning to have some real estate in Dubai we always recommend having JAFZA offshore, as it allows you to have all your property registered onto your JAFZA offshore. If you plan to have international trading or services you are welcome to go for RAK offshore or Ajman offshore. In general, the activities for offshore companies are limited, where you can apply for Trading, Consultancy, Holding, Investments, Property Ownership, Shipping and Ship management, Intermediary Brokers, etc.
The overall process of registration steps looks as follows:
Step 1. Find a service provider on the market that has Offshore Agent’s license of your intended offshore and ask to provide his Offshore Agent’s license and the price.
! Be aware that there are many resellers and aggregating websites that do not provide the service by themselves, but rather have partnership agreements with real service providers and charge some margin on top of the final price. So, ask 5-7 companies for a quote, asses their time of reply, professionalism, understanding of the process and topic and make your final decision who you would like to work with.
Step 2. Providing required documents, namely its: Passport copy, Bank reference Letter (in original), Proof of Residency – Utility bill – in original, sometimes other documents requested by the Registrar during the Incorporation.
If you are a Corporate entity: you should be prepared to provide (1) a copy of license or incorporation certificate issued by the chamber of commerce of respective country or any other registering body attested by the Registrar where the company is incorporated. (2) Original board resolution with intention to open a company in the UAE and description of powers. (3) MoA and AoA of the parent company attested by the Registrar where the company is incorporated. (4) Good standing certificate (5) Filled in UBO form with passport copy of the ultimate beneficiary owner.
Step 3. Sign the relevant set of documents like Application form, Authorized Signatories Specimen signature form, Anti-money Laundering form, Ultimate Beneficiary Owner (UBO) form, etc. All of them you will have to submit in scanned copy or original.
The interesting point is that RAK and Ajman offshore allow to register a company remotely without personal visit to the UAE. Only JAFZA offshore remains to have such requirement. But you should be aware that to open a bank account – you will have to come in person, as no UAE bank opens account without physical presence of the applicant.
Step 4. Once everything is submitted it usually takes 3-5 working days to finalize the process. Then you receive the corporate set of documents of your newly established UAE offshore company: usually it is Certificate of Incorporation, MoA and AoA. In comparison with free zone or LLC company you get quite a few documents, but it is offshore, it’s a rule, so don’t worry about that.
We would like to bring your attention to the fact that registering an offshore company is not an issue, it will be very fast. The problem may arise at the time of the next step – opening a bank account. A company without account is a waste of money and non-operating instrument. So, what is the issue you may ask?
Due to recent KYC and compliance restrictions, most of the UAE banks do not open a bank account for offshore companies whose owner does not have a valid UAE resident visa. Moreover, offshore company does not have quote for resident visa, only in case you have a free-zone or mainland company you can apply for UAE resident visa. Therefore, beware of that and plan accordingly.
That is why in most of the cases we recommend considering opening a free zone company. It allows you to get a resident visa, get a bank account and start operating your business!
If you want to know more about Dubai freezone company formation, feel free to get in touch with our professional consultant team and we would be delighted to assist you and help you to compare Dubai freezone company setup costs and help you to find that free zone, which would suit your business needs the most.
Disclaimer: Business Boutique UAE-Consultants.com is not affiliated with any particular government or legal entity. Business Boutique does not give professional legal advice nor any other professional advice subject to a public office in the government. This article merely sets out a simple and basic idea as to the reasons of Dubai freezone company setup and Dubai free zone company formation cost. Business Boutique in no way holds nor imposes any official governmental or legal authority and the article herein is only to be taken as a guide. All further governmental or legal issues should be addressed to the corresponding authorities.
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