The UAE is probably one of the most exciting options of 2024 and, as the country continues to mature as an offshore finance hub, could morph into being seen as the Switzerland of the Middle East. From Free Trade Zone companies (RAK) to UAE offshore entities, the offshore sector really offers something for everyone. However, there is some mystique over the process and cost. So, I will do my best to explain how to go about a formation and what the Offshore Companies UAE Prices are.

UPDATE August 2024: The UAE Is Now beginning to Levy a Low Corporate Income Tax on Entities

Introduction to the UAE as a Jurisdiction

The UAE started setting up as an offshore hub around in early 1985 with the advent of the Jebel Free Zone Company (JAFZA). This allowed offshore companies to effectively trade within the zone on a tax-free basis and was fairly revolutionary for the time. However, the UAE didn’t really factor as one of the leaders that it is today until the early 2000s.

2003 saw a major change with the UAE and legislation was passed which introduced the Offshore Company as a legal entity. This was really the start of the Emirates as being seen as a true offshore jurisdiction. From this point onwards, the Middle Eastern nation continued to grow both in the banking and finance sectors to where it is today.

The UAE really is an excellent place to do business in and, whilst it definitely has some quirks, it provides superior services to entrepreneurs and businesses looking to operate within the Emirates. Local governments are very encouraging of start-up businesses and established companies moving into their districts. In fact, you will rapidly discover that there is quite a bit of competition, and differences, amongst the various zones and what they offer.

Additionally, it is relatively easy to obtain a long-term visa for those wishing to fully operate out of the UAE. This has proved to be a very large drawcard for entrepreneurs looking to move their companies to more business-friendly jurisdictions.

In short, the UAE has a great business and professional service sector that can fully support any manner of offshore setup. The major cities are comfortable to reside in and you will find that the people are relatively friendly. However, like all locations, it is not without some downsides as well including the general cost of living within the Emirates.

What are the Offshore Company Types?

There is a plethora of options between Freezone companies and pure offshore companies in the UAE. Initially, considering just the offshore companies gives us three main locations of incorporation, Dubai (Jebel), Ras Al Khaimah (RAK), and Ajman. They all have minor differences between them with, for instance, the Jebel offshore entities being the only ones that are allowed to own property within the UAE.

UAE Offshore Companies

However, from a pure offshore perspective, they all offer an effective tax structure with 0% corporate and personal taxes levied. Capital Gains Tax (CGT) is also zero-rated, and you can expect to not even have to lodge an annual tax or profits return for these companies.

Additionally, despite Dubai having signed numerous tax treaties they have executed no Tax Information Exchange Agreements (TIEA). This means that your private information will not be forwarded around the world and subject to the risk of data leaks.

Also, full foreign ownership is also allowed and banking facilities within the Emirates are plentiful which is another reason that the number of offshore companies has increased massively over the past decade.

In short, UAE offshore companies are extremely easy to set up and, as long as the requisite fees are paid, easy to maintain in the long term.

Free Zone Companies – Offshore Companies and UAE Prices

Emirates Free Zone Companies are a slightly different beast and are offered more on the basis of allowing duty-free import/export out of the UAE. There are over 47 different locations/jurisdictions for these companies which are literally too many to detail here. However, they all tend to have mainly the same benefits with some slight differences between their treatment.

Similar to offshore companies, they are also tax-efficient entities and are treated as zero-tax companies for both personal and corporate taxes. No duties apply for import/export into the UAE and also expect to pay no capital gains taxes for any asset disposals made.

However, probably the biggest difference to the standard offshore companies is the fact that Free Zone entities need a business license. The business licenses specifically spell out what you can and can’t do with your operations. This is enforced and you will need to only operate your business under the restrictions contained within your business license.

Ultimately, Free Zone Companies have very broad operating requirements and cover everything from crypto to physical import/export operations. It simply takes picking the right FRZ that fits the needs of your business and then adhering to your license conditions.

Advantages of Basing in the UAE

I have already touched on some of the benefits in the previous section. However, the following points are the key advantages to basing your new offshore company within the UAE:

• No-Tax levied on Corporate or Personal Income
• Full Foreign Ownership Allowed (100%)
• Easy to fully repatriate all capital
• Local and international banks are widely available
• No sharing of Tax information
• Easy access to a long-term visa

Disadvantages of the UAE as an Offshore Jurisdiction

I always hate completing this section because, as always, it really depends on your personal circumstances and goals in moving offshore. However, some of the issues I have run up against in the UAE are as follows:

• Expensive Cost of Living for Entrepreneurs Relocating
• Offshore Companies Are Unable to Trade Domestically
• Cost of Formation is on the Higher Side
• Banks May Require Significant AML Information
• Offshore Companies Can Not Rent Local Premises Directly

In short, I really struggled to come up with a range of cons to describe because most of these negatives can be easily overcome with some planning. However, from a pure asset protection and privacy perspective, the UAE provides excellent offshore options.

Offshore Company UAE Price & Costs

Type of Company	Expected Service Fee	Government Fees	Estimated Total
Offshore IBC	Circa US$1,700	US$1,730	US$3,430
RAK Free Zone	Circa US$2,600	US$1,350	US$3,950
Dubai Free Zone	Circa US$4,500	US$8,988	US$13,488
Ajman Free Zone	Circa US$2,400	US$1,350	US$3,750

As you can see, there is a big difference between the various free zone companies and much of this is down to the local government fees and charges. This is why, if you choose to move forward with starting a UAE Free Zone entity, you need to be sure that the local zone fits your needs.

Conclusion – Offshore Companies and UAE Prices

The UAE may seem like an expensive jurisdiction to operate in but it brings with a strong reputation and the ease of global banking. This is something you are not going to see when using an $800 Belize IBC/Offshore Company and is worth the additional costs.

Ultimately, the Emirates is a great location that enjoys significant privacy protections through the non-sharing of tax information, and this is why it continues to flourish as a key offshore hub in 2024.

Obviously, the above prices may change in the future but are reasonably current as of the time of publishing this article.