SHANDA CONSULT

United Arab Emirates

Important note: if requested, Shanda Consult and its local cooperation partners are able to fulfil all prerequisites for UAE companies that are listed in the following text and can offer the necessary services required , including bookkeeping and similar services.  

The United Arab Emirates (UAE) comprising the emirates Abu-Dhabi, Dubai, Sharjah, Ajman, Umm Al-Quwain, Ras Al-Khaimah and Fujairah are certainly a well-known location which needs no introduction.

Founded in 1971, the United Arab Emirates can look back at a 2000 year old tradition of overseas trading. The early main sources of revenue were the trade with spices as well as exporting natural pearls. Through the domestication of the camel, long distance trading gained significance already at the end of the 2nd millennium B.C. Dibba for instance (in the Emirate Fujairah), organised frequent fairs for overseas trading which was even visited by Chinese merchants.

The United Arab Emirates are a union of seven Emirates creating a state based on a high degree of compromise. The fact that largely autonomy has been granted to the different emirates with regard to political and economic decision making, does result in differing societal and economic models. 

While alcohol is strictly prohibited in Sharjah, one can find foreigners and locals in numerous bars in Dubai which borders Sharjah in the south. While income from oil revenues contributes approximately 94% of Abu Dhabi´s income, Dubai on the other hand has managed to boost its income from non-oil related businesses to over 80% of its overall income. Four out of seven emirates do not have oil occurrence. The emirates practise a solidarity based income equalisation between each other.

The UAE offers a high professional standard in business related areas and generally a high standard of living as well as an excellent infrastructure.

All emirates apply the concept of the free trade zone, which can be implemented by separating them according to industry sectors, as is the case in Dubai and a few other emirates. Capacities of many free trade zones have already been completely exhausted. There are waiting lists of entrepreneurs and business men wishing to commence business activities. One common alternative is moving to free trade zones of neighbouring emirates.

Aside from some offshore companies in a few emirates, the Free trade zone companies (FZCs) present the only possibility to form a company without the ownership participation of UAE citizens, which makes FZC an attractive concept.

However, said Free Trade Companies (FZCs) do require slightly more effort due to the fact that the renting of office spaces, factory space or land are mandatory within the free trade zones.

The most affordable solution in some free trade zones is thus the so called “Flexi Desk” solution. Here, one can rent the right to use an office desk within a completely furbished shared office space.

Licenses granted to Free Trade Companies include –depending on free trade zone and emirate- different visa rights for a permanent residence of one or several of the free trade zone`s managers. Such visa right also includes a residence permit for family members of the visa holder(s) (i.e spouse or children).

Persons who prefer to have less effort for their international business activities and who are not interested in a permanent residence within the UAE, often opt for offshore companies. Such offshore companies can for instance be formed in the northernmost of the UAE, in Ras Al-Khaimah (RAK) (literal translation: “head of the tent”, which describes a small tent shaped cover above the vent in the highest part of a tent ). Alternatively, offshore companies can also be formed in Dubai.

However, incorporating offshore companies in Dubai has become increasingly unattractive due to the relatively high costs and the administrative as well as legal requirements. These unfavourable circumstances can be attributed to the waning interest of Dubai’s political leaders in this industry.

Instead, within the last few years there has been a steadily increasing interest in forming offshore companies in Ras Al-Khaimah (RAK). The emirate of Ras Al-Khaimah (RAK) has established a government authority especially designated to the incorporation and supervision of offshore companies. This authority deals with all relevant processes in an extraordinarily professional and swift manner.

Due to above mentioned factors, the following text will exclusively deal with the features of offshore companies in Ras Al-Khaimah (RAK).

The United Arab Emirates and Ras Al-Khaimah are not on the OECD`s and FATF`s lists of countries with damaging tax legislation (= tax haven).

No information sharing agreement for offshore companies exists.

Should you nevertheless be interested in Free Trade Zone companies of the UAE, please kindly get in touch with us with a short yet meaningful description of your project or endeavour. We will gladly advise you accordingly and will realise the incorporation of your Free Trade Zone if possible.

Please pay attention to the fact that the company´s signatories and/or beneficial owners are required to appear in person in the United Arab Emirates for the purpose of opening a bank account.

 

General information regarding offshore companies in Ras Al-Khaimah (RAK), United Arab Emirates

Legal System

The United Arab Emirates have a dual legal system in place consisting of secular as well as Islamic law (Shari`a). In day to day issues as well as in matters of business laws, the Shari`a practically does not pay any role.

Economy

The UAE is amongst the wealthiest nations in the world, having a GDP of almost USD 50.000 per inhabitant. Income from oil-related activities are accounting to merely 25% of the nations GDP. Overall, the UAE comes with a highly diversified economy. The largest part of the GDP was contributed by the services sector. Important industries include amongst others the production of aluminium, glass, ceramic products and concrete.  The main source of revenue for Ajman and Umm Al-Quwain is fishing.

Currency

UAE Dirham (AED), pegged to USD.

Official language

Official language is Arabic. Aside from Arabic the following business languages are common: English, Farsi, Hindi and others.

Time zone

GMT + 4 hrs

 

Information regarding companies offshore companies in Ras Al-Khaimah

Types of company

International Business Company (IBC, for offshore companies)

Company Law

RAK Offshore Regulation 2006 (for offshore companies).

Minimum Capital Requirement 

There is no legally obligatory minimum capital requirement. No obligation of paying in capital exists. 
The company´s capital must be denominated in AED or USD.

Restrictions

ICCs are not allowed to pursue activities in the banking sector, may not pursue insurance business, may not be active as fund-or asset management company. IBCs must pursue their business activities outside the UAE. However, offshore companies are permitted to hold real estate and have employees in RAK, condition to the RAK`s offshore agency`s approval.

Taxation

None.

Double Taxation Treaties 

Existing Double Taxation Treaties do not apply to Offshore companies.

Annual Tax Declaration Filing

No.

Annual Financial Statement 

No (for offshore companies).

Company´s registered address and incorporation agent 

Registered company address must be in the UAE. An incorporation agent who resides in the UAE must be appointed.

Company secretary

Each RAK Offshore company must appoint a company secretary, who is not required to be a UAE resident.

Directors

Minimum one. Nationality and place of residence not relevant. Can be a natural or legal person.

Shareholders

Minimum one, natural or legal person.

Disclosure of Beneficial Owner

Yes, must be disclosed to the incorporating agency and are known to the offshore authority.

Directors publicly known

No, director`s names are not given to the offshore company. The offshore register not publicly accessible.

Shareholders publicly known 

No. The offshore register is not publicly accessible.

Bearer Shares

Yes, possible.

Foreign Currency Control

No.

Name of the Company

English , must end with “Limited” or “ Corporation”.

Language of Company documents 

English, partly English and Arabic.

Duration of Company formation

Registration of company takes around 2 days. The entire incorporation process takes approximately 4-7 working days.

Shelf Companies

Yes, however not very common.