Dubai

Dubai & Ras Al Khaimah Tax Free Companies

Tax Haven Jurisdictions

For Western clients they are generally suitable for holding and passive activities or as part of a tax planning structure. Excellent reputation with little of the traditional offshore stigma associated with the Caribbean jurisdictions. However, they do not benefit from tax treaty protection but are very popular with Arabic and Muslim clients as the governing law is Sharia and tax treaty protection is not as important for non-Western clients.

Synopsis

Historically the Emirates were British colonies up to and until 1971, when six of the Trucial States off the Persian Gulf - Abu Zaby, Ajman, Al Fujayrah, Ash Shariqah, Dubayy, and Umm al Qaywayn - merged to form the United Arab Emirates (UAE). In 1972 by Ra's al Khaymah (RAK) became the seventh member of the UAE. With the exception of Dubai and Ra's al Khaymah all the Emirates operate a unified legal system but in the case of the former they kept legal autonomy and created their own respective international tax free companies, which are the subject of this leaflet. It should be noted it is also possible to form domestic companies in the UAE, which are compulsory where business is conducted locally and/or when local residency permits are required. Economically, the UAE is one of the World's largest oil producers but by way of diversification it has also developed itself into a luxury holiday destination and a Gulf financial centre.

Star Ratings

Corporate registration efficiency

4

Cost

4

Confidentiality

5

Local Banking facilities

5

Legal system

3 (Sharia)

Political stability

5

Reputation

5

abudabi

Location

The United Arab Emirates is located in the Persian Gulf bordered by Oman and Saudi Arabia. Size wise the UAE occupies 82,880 sq km and is approximately the size of the Republic of Ireland.

Relationship with the UK

The UAE has a particularly close relationship with the United Kingdom and especially with the British Royal Family. In addition, Britain has a large number of mostly highly skilled expatriates working in the country's petroleum industry whilst there is also a highly developed defence industry relationship. The national currency is the Dirham with (at the time of writing) the currency exchange rate being that a Dirham was worth approximately US 25ยข.

Advantages and Disadvantages & Ras Al Khaimah (RAK) International Business Corporations (IBC'S-)

The principal legislation for RAK companies is the International Companies Regulations Act, 2006 and the Registered Agents Regulations Act, also of 2006. In Dubai, the legislation, which governs Dubai Offshore Companies, was enacted in Jebel Ali Free Zone (Jafza) in Dubai in May 2003. Both sets of legislation effectively sought to codify and guarantee the rights, principally that of being tax free, for those wishing to establish a UAE IBC company.

The Benefits of Dubai & Ras Al Khaimah (RAK) IBC Companies

UAE IBC companies need only pay registration and annual license/franchise fees. In particular, they do not have to appoint an accountant or submit annual accounts although the normal know your client (KYC) rules are in place. However, IBC's have severe restrictions on carrying out business within the UAE.

All IBC's are required to have a registered agent and office in the UAE. Although not required under local law nominee directors will be employed to allow anonymity to be maintained when dealing with third parties. Otherwise, it may be necessary for an ultimate beneficial owner to reveal his or her identity.

  • Both registered and bearer shares can be issued but the latter must be kept by the registered agent.
  • A company will normally have at least one shareholder.
  • Only one director is required. A company may serve as director.
  • There are no nationality requirements for either directors or shareholders.
  • Annual general meetings must be held but can take place in any jurisdiction and may even be concluded by means of a conference telephone call.
  • Directors have the power to protect the assets of the company by transferring them to trustees, another company or other legal entities for the benefit of the IBC, its beneficial owner(s) and/or creditor(s).
  • The register of members must be maintained at the registered office of the company in the UAE
  • No accounts or annual summaries have to be filed with the Government, with the exception of the annual franchise tax to be completed and filed by the registered agent
  • A company incorporated outside of the UAE may be re-domiciled in the UAE under the 'Continuation' Principal

Domestic Corporate Tax

Not none

Personal Tax

The UAE does not impose income, capital gains, gift or inheritance tax on individuals.

Administration & Accountancy Services

Managed & Non-Managed Companies

The SCF Group can provide Dubai & Ras Al Khaimah (RAK) companies either in a non-managed or managed format. However, in general like all 'international business corporation' (IBC) jurisdictions UAE companies are generally used for 'holding' or low level consultancy purposes so full management services are not common, especially as the UAE has limited tax treaty protection. However, virtually all UAE companies avail of our administration services from a convenient tax free location or sub-contracted out provider to ensure that corporate activities are separate from those of the beneficial owner

Fully Managed & Branch Registrations

Where required SCF can provide fully managed services and even branch registration in another jurisdiction where tax treaty protection is required. For further details please consult with a SCF sales office

Set-up & Annual Maintenance Fees

Please request the separate Dubai & Ras Al Khaimah (RAK) Quotation Leaflets

The Ownership of Dubai & Ras Al Khaimah (RAK) Companies

'Overhead' Discretionary Trusts or Private Interest Foundations

For tax planning reasons, normally pertaining to anti-avoidance provisions in a beneficial owners 'home' country or place of fiscal residence, and/or because of a need to 'ring fence' IBC assets many Western clients owning a Dubai or Ras Al Khaimah (RAK) company select to have it owned not be themselves but by an overhead discretionary trust or a Jersey Private Interest Foundation, Seychelles Private Interest Foundation or a Liechtenstein Private Interest Foundation (locally known as a Stiftung).

For more information on discretionary trusts and/or private interest foundations please refer to the trust and private interest foundation sections.