JAFZA Offshore Company Formation

JAFZA offshore companies are permitted to conduct a wide range of lawful business activities, with some specific restrictions. Here are the key points regarding allowed activities for JAFZA offshore companies:

Permitted Activities

JAFZA offshore companies can engage in various international business activities, including: International trade and commerce Formation of holding companies Owning real estate (in approved areas) Registration of copyrights and patents International consulting services

Restrictions

While JAFZA offshore companies have significant flexibility, they are prohibited from: Carrying on business with persons resident in the United Arab Emirates Conducting banking business Engaging in insurance or reinsurance activities, or acting as an insurance agent or broker Carrying out any activities prohibited by the Jebel Ali Free Zone Authority

Important Considerations

JAFZA offshore companies are primarily designed for international business operations They can own property in Dubai, but only in designated freehold areas approved by JAFZA If a JAFZA offshore company wishes to conduct trade or other business within the UAE, it must obtain the appropriate license from competent authorities

Clarifications

  • It’s worth noting that certain activities are not considered as “carrying on business with persons resident in the UAE”:
  • Maintaining professional contact with legal consultants, accountants, or management companies in the UAE
  • Preparing and maintaining books and records within the UAE
  • Holding meetings of directors or members in the UAE
  • Maintaining a bank account in the UAE for routine operational transactions

  • Recent Developments

     

Recent Developments

The New Offshore Regulations have introduced some changes, including:

  • The ability to apply for residence visas for members (shareholders and/or directors) if the company owns property in designated freehold areas
  • Introduction of different classes of shares
  • Clarification on permitted activities
  • Option to convert into an onshore Free Zone Company

These regulations aim to align JAFZA offshore companies with the best international practices and address market needs. JAFZA offshore company registration is a streamlined process that offers numerous benefits for international businesses. JAFZA (Jebel Ali Free Zone Authority) offshore companies offer flexible requirements for shareholders and share capital, making them an attractive option for international business setup.

Here’s an overview of the procedures and costs involved:

Shareholders

  • Minimum requirement: At least one shareholder is mandatory
  • Types of shareholders: Shareholders can be individuals (natural persons) or corporate entities (legal persons)
  • Nationality restrictions: There are no restrictions on the nationality of shareholders
  • Maximum number: There is no restriction on the maximum number of shareholders

Share Capital

Minimum share capital: There is no prescribed minimum share capital requirement

Currency: The share capital is denominated in United Arab Emirates Dirham (AED)

Sufficiency: The company must have share capital that is sufficient for the activities for which it is licensed

Additional Details

Classes of shares: Different classes of shares are permitted

Share certificates: The company can issue share certificates, with a fee of AED 200 for each new share certificate (if share capital is deposited)

Capital increase/decrease: Companies can increase or decrease their share capital through a specific process, which includes submitting required documentation and paying applicable fees

Key Points to Note

The flexibility in shareholder requirements allows for various ownership structures, including sole ownership or multiple shareholders.

While there’s no minimum share capital requirement, it’s advisable to consult with JAFZA’s sales team to determine the appropriate capital for your specific business activities

JAFZA offshore companies enjoy zero corporate tax, capital gains tax, and no restrictions on capital repatriation

By offering such flexible requirements, JAFZA offshore companies provide an attractive option for international businesses looking to establish a presence in the UAE while maintaining financial efficiency and operational flexibility.

Registration Procedures

    1. Select a Registered Agent: You must appoint a registered agent in Dubai to handle the administrative requirements and interactions with JAFZA authorities
    2. Choose a Company Name: Submit at least three company names to JAFZA for approval. This helps avoid potential delays in the registration process
    3. Submit Application: Apply through registered agent with Jebel Ali Free Zone Authority
    4. Prepare and Submit Documents: Your registered agent will prepare and submit the following documents
      • Offshore Application
      • Memorandum and Articles of Association
      • Letter of Appointment of Registered Agent
      • Board (Director(s) & secretary) Passport Copy
      • Additional documents for individual or non-individual applicants
    5. Pay Required Fees: Submit the necessary fees to the authorities
    6. Obtain Certificate of Incorporation: Once approved, JAFZA will issue a certificate of incorporation
    7. Open a Corporate Bank Account: After registration, you can open a corporate bank account in the UAE

    Company Structure Requirements

    • Shareholders: Minimum one shareholder (can be individual or corporate)
    • Directors: At least two directors (must be individuals, not corporate entities)
    • Secretary: Appointment of a company secretary is mandatory
    • Registered Office: Must have a registered office within JAFZA

Costs

The cost of setting up a JAFZA offshore company varies depending on several factors:

  • Average Setup Cost: Approximately AED 18,000 ($4,900)
  • Comprehensive Package: Some providers offer packages starting at $6,000, which include
    • Certificate of Incorporation
    • Company Registration Certificate
    • Memorandum and Articles of Association
    • Official Address and Documents
    • Share Certificate(s)
    • Resolution for Director(s) Nomination and Share Distribution
    • Dedicated Account Manager for 1 Year

Additional Considerations

  • Timeframe: The registration process typically takes 7-8 days after approval from the compliance department
  • Accounting Requirements: Companies must prepare accounts within 18 months of incorporation and maintain records for 10 years
  • Audit: JAFZA offshore companies must hire an approved auditor to review and report on the accounts
  • Tax Benefits: JAFZA offshore companies enjoy tax exemptions as they operate outside the UAE
By following these procedures and meeting the requirements, Alpha Equity MC can support to register a JAFZA offshore company and take advantage of the benefits offered by this strategic business location.
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