However, there are a few differences in the company structure, company setup procedures, and nature of business operations for Free Zones and the Offshore jurisdictions in UAE.

What are the Advantages of a Free Zone Company?

The Free Zone company has many business advantages when compared to Offshore companies. The investor can easily setup a Free Zone company in UAE with the help of an experienced business consultant.

A Free Zone company can take an office space in the Free Zone if necessary and coordinate the business operations. The Free Zone company is eligible to can hire employees depending on the visa quota availability.

Free Zones are a preferred investment destination for foreign investors due to the 100% foreign ownership for the company. The investor can also repatriate 100% of the business profits and capital to the home country.

There is no income tax and certain Free Zones in UAE are VAT exempted. The business license in UAE Free Zones starts at AED 11,500 for zero visa quota to up to 6 visa quotas and more.

Free Zone Company – Key Highlights

The Free Zone Company is an onshore company governed by the respective Free Zone jurisdiction and eligible to apply for a UAE residence visa, hire employees, set up an office, open a corporate bank account, buy property, sponsor employee & investor visa, etc.

The Free Zones offer customized office spaces (Flexi-desk, shared office, furnished office -12 sq.m, 25sq.m, 50 sq.m, office + warehouse) and a host of other business benefits for the investors.

The company formation in Free Zones is easy with minimal documentation. However, it becomes quite confusing for the investors to choose the right business activity and Free Zone company package.

Also, depending on the nature of the business activity, it requires a few approvals from the Free Zone authorities and other government authorities in the UAE. It is best advisable for the investor to get the assistance of an expert Business Consultant to carry out the process of the company set up in the Free Zones of UAE.

Top Four Free Zones to explore in UAE

• Dubai Airport Free Zone
• Dubai Silicon Oasis – IFZA
• Sharjah Media City
• Sharjah Publishing City

What is an Offshore Company in UAE?

Offshore company in UAE is a type of business entity that is setup with the UAE offshore jurisdictions. In UAE there are mainly three offshore jurisdictions – JAFZA, RAKICC, and Ajman Offshore.

Offshore Company in UAE – Key Highlights

Offshore companies in UAE are governed by the respective Offshore jurisdictions and are non-resident companies. An offshore company is not eligible for applying UAE residence visa for the investors or the employees.

Also, the Offshore company cannot trade or involve in any trade operations with the mainland of UAE. Offshore companies are aimed at facilitating global trade only and they fall out of the UAE VAT regime and other local company governance.

Companies registered with the RAKICC Offshore have the provision to purchase a property in the Free Hold area in Dubai under the company name. 

Offshore Company Formation in UAE – Key Business Benefits

1. Tax Advantage

Offshore Companies do not fall into the tax regime of any business jurisdiction or country. They enjoy Zero taxation for the revenue generated.

Zero taxation for offshore companies is one of the major driving factors for global investors to choose offshore business.

2. Business Anonymity

One of the key reasons global investors prefer to register an offshore entity is to keep their ownership and assets invested confidentially. There is no requirement for keeping public records for an offshore company.

However, with the new law of global taxation, economic substance regulation filings, anti-money laundering, etc; the anonymity of offshore companies is subject to respective authorities’ inquiry. The company documents, transactions, and other trade details will have to be shared upon request by the Government authorities.

3. Ease of Formation and Low Maintenance Cost

The steps involved in setting up an offshore company are relatively straightforward with minimum documentation. It just takes 2 working days in UAE to complete the process of the offshore company registration. Offshore allows remote company registration without the presence of the shareholder (Ajman & RAKICC).

Also, the company is not eligible to open a physical office in UAE nor apply for an employee residence visa. The maintenance cost of an offshore company is relatively lower than an onshore company.

4. Access to Bank Accounts

Offshore companies registered in RAKICC, UAE are eligible to open a bank account in UAE and other global business locations. Individuals can protect their assets by opening a holding company and moving all the assets under the company name.

Also, by opening a corporate bank account in UAE the offshore company can handle all the business transactions via the bank account and successfully run the business.

To know more about the difference between Free Zone, Mainland, and Offshore Companies in UAE, talk to our expert team right away!

Contact Us: Aurion Business Consultants

The post Free Zones vs. Offshore Companies in UAE – Key Differences appeared first on AURION.

RAK is investing heavily in infrastructure and industrial setups such as warehouses, office buildings, business parks, etc., to transform it into one of the busiest places to do business in UAE.

There are several factors driving the business infrastructure investment in RAK. The liberal government policies towards business set up by foreign investors is a major reason for the rapid growth of RAK into a business hub of UAE.

Type of Business Setup in RAK

The business setup in RAK is similar to the processes followed in Dubai, and the other Emirates of UAE. To conduct any form of trade in UAE be it online or physically, one must be having a valid trade license here in UAE.

In RAK there are three types of business setup options available for investors. It is the Mainland, RAKEZ Free Trade Zone, and the RAKICC Offshore (operating at the same premises of RAKEZ Free Trade Zone).

Specialist Consultants such as AURION is well equipped with the latest business laws governing the business setup in RAK and the whole of UAE.

In RAK, there are several Business License Types Available:

• Industrial License
• Commercial License
• General Trading Licensee
• Professional License
• Ecommerce License

Advantages of Setting Up a Company in RAK

• Long term good relations with neighboring emirates
• Trust among the local population and business-friendly measures by the RAK Government
• Ease of setting up a company in RAK
• No personal or income tax
• No trade barriers for international trade
• No customs duty on imports into RAKEZ
• Corporate friendly business laws and framework to promote trade and economy
• 100% foreign ownership and profit repatriation
• World-class infrastructure, fully furnished office spaces,
• Easy access to the Sea Port – Port Saqr is one of the prominent ports of UAE facilitating global trade

1. RAK Economic Zone (RAKEZ)

The Ras Al Khaimah Economic Zone is a popular investor destination mainly for trading companies.

There are customizable warehouse facilities and plots of industrial land for development. Also, there are spaces for staff accommodation, all at an affordable package.

Custom Made Office Space, Warehouses and Industry Facility

RAKEZ also offers a host of business activities for the investors and suitable office spaces ranging from Flexi-desk to fully furnished offices.

To cater to a wide audience group of investors with varying business activities, the RAKEZ Free Trade Zone consists of three Industrial Zones.

They are specifically built for establishing large scale, heavy-duty manufacturing, and light manufacturing industries. RAKEZ also has two Business Centres for Small and Medium Companies and freelancers.

To know more, read about: RAKEZ Free Trade Zone

2. RAKICC Offshore

The RAK International Corporate Centre (RAKICC) is the Corporate Registry operating in Ras Al Khaimah, UAE that governs the offshore (International Business Companies) company formation and allied services.

RAKICC is one of the most trusted and secure jurisdictions for setting up an International Business Company.

Types of License Categories in RAKICC

There are three types of license categories in RAKICC for Offshore Company setup.

• Company Limited by Share
• A company limited by Guarantee
• Unlimited Company

All these companies have distinct characteristics and are formed for various purposes. The companies can be structure into:

• Holding Company (Limited by shares)
• A Tax-Saving Mechanism (unlimited),
• Tenant Associations (limited by guarantee), real estate development companies, etc.

There is a wide range of business activities such as general trading, consulting, construction, marketing, manufacturing activities, etc., available in RAKICC.

It is to be noted that companies operating in RAKICC Offshore can only conduct international trade and not directly sell inside UAE.

Also, the Offshore Company is out of the purview of local UAE legal laws and governance and there is no resident visa issued under the offshore company in UAE.

RAK Premium Product Package – Host of Investor Benefits

RAK Premium Product Package allows RAKICC Company to set up a subsidiary in RAKEZ and carry out activities onshore in UAE. Also, the RAKICC Company is now eligible for property purchases in Dubai under the company name.

Read to know more: How to Purchase a Property in Dubai through a RAKICC Company

Hence, there are several key advantages for the investors to register an offshore company in RAKICC. The choice has to be made with thorough research on the limitations too. With the premium package, offshore company investors can enjoy the onshore status, conduct business in UAE, rent out space in RAKEZ, apply for a bank account, continue business locally and internationally.

3. RAK Mainland Company Formation

RAK is allowing 100% foreign ownership in the mainland. In measures to promote trade and drive in more investors. RAK has improved the ease of doing business in the mainland. RAK also allows investors to add partners and transfer ownership to new investors.

100% Foreign Investment in Mainland Companies in RAK

Companies setting up under this FDI structure will be considered national companies and will have full confidentially of technical, economic, and investment information.

The RAK Economic Zone (RAKEZ) and RAK’s Department of Economic Development (RAK DED) have agreed on a new company formation structure under the Emirates’ program.

New Company Formation Structure by RAKEZ & RAK DED

The program aims to drive in more foreign investment into key industrial sectors and services. For those business activities that fall under the eligible sectors for 100% FDI issued by UAE Cabinet, the RAK DED will reserve the trade name and issue the FDI license.

After which, RAKEZ will issue the required business license and documentation to the investors. There are huge opportunities across various industrial sectors like agriculture, manufacturing, transport and storage, food services, information and communications, healthcare, entertainment, construction, etc.

To know more about company formation in Ras Al Khaimah and the business opportunities, talk to our expert team right away!

The post Business Setup in Ras Al Khaimah (RAK) – Company Formation Options appeared first on AURION.