If you are looking to expand into the Middle East region, offshore company registration in Dubai offers a plethora of advantages for entrepreneurs. The UAE was ranked 9th in the IMD World Competitiveness Yearbook 2020 for its tax system and efficiency. With a growing economy, strong infrastructure and low tax rates, and paired with the convenient and easy process to register a company in Dubai, it is no wonder that numerous entrepreneurs are choosing Dubai for their offshore business. In this article, we will explore the top benefits of offshore company in Dubai.
Top benefits of an offshore company in Dubai:
- Double Tax Agreements (DTA)
- Asset Protection
- Ideal social conditions
- Business Anonymity
- Free Trade Zones (FTZ)
#1 Zero taxation
- Having zero taxation for businesses is one of the most important benefits of offshore company registration in Dubai. Dubai is 100% tax-free, which means that most offshore companies in the UAE are exempted from paying corporate and personal income tax. Offshore companies are also not required to pay value-added taxes, withholding tax, taxes on capital gains and import/export taxes. Moreover, with no trade barrier quotas or foreign exchange controls imposed, profits earned may be repatriated.
- Therefore, the legally minimized taxation obligations make Dubai an ideal jurisdiction to start a new business, allowing firms to enjoy substantial cost savings.
#2 Double Tax Agreements
- Double Tax Agreements (DTA) are tax treaties signed between 2 or more countries. They provide tax relief for businesses where income arises from cross-border economic activities between the two jurisdictions. The UAE has signed Double Tax Agreements with more than 40 countries in the world. Therefore, having an extensive network of DTAs promotes the country’s global competitiveness as a business hub and makes choosing to set up company in Dubai more advantageous.
#3 Asset Protection
- If entrepreneurs are seeking asset protection, offshore company registration in Dubai is the ideal way to achieve it. Business owners can protect their physical assets and funds raised out of international invoicing or trading. Through asset protection to foreign trustees, this legally creates a separation between the creditors and the company-secured assets. Your assets are well protected even if the company incurs outstanding debts or goes bankrupt. This would be ideal for those who own assets such as real estate investments and intellectual properties.
#4 Ideal social conditions
- With the UAE ranked as the third safest country in the World, Dubai is known for its low crime rates and enhanced security system. Dubai’s strong reputation as a safe city can be attributed to its strict punishments and well-publicised convictions. This makes doing business in Dubai safe and the increased level of security will provide businesses with a greater peace of mind.
- Moreover, Dubai is also classified as the country with the best quality of life in the Middle East. While businesses are able to gain access to an affluent consumer market, investors can also benefit from the high quality of life and living conditions.
- If you are looking for a residency visa, incorporating your business in Dubai will earn you a UAE Residency Visa. This allows expatriates to lease apartments, own properties and travel freely within the UAE.
#5 Business Anonymity
- Offshore business registration in Dubai provides anonymity when conducting business operations in Dubai. This means that businesses are able to enjoy confidentiality. Unless there are suspicions of illegal activities such as money laundering, it is not mandatory for companies to have their financial information published. Companies are able to protect their assets from creditors and third parties, therefore secrecy is one of the most important benefits when opening an offshore company in Dubai
#6 Free Trade Zones
- Dubai has more than 30 Free Trade Zones (FTZ) which provide tax concessions and customs duty benefits to businesses operating in the FTZ. As the Dubai Free Zone Council (DFZC) provides a plethora of lucrative tax and regulation benefits for businesses, this helps to stimulate and catalyse the growth of companies. Moreover, during the DFZC’s 15th meeting held virtually on 11 July 2020, the council examined the development of a comprehensive post-COVID-19 action plan for free zones. Additionally, the council also reviewed steps taken to reduce the incidence of illegal activities, such as money laundering and tax evasion.
- Therefore, this further strengthens Dubai’s commitment to build a favourable economic environment and positions it as a preferred jurisdiction for foreigners to set up their businesses.
In conclusion, apart from the aforementioned benefits, Dubai’s excellent infrastructure, favourable shipping connections and investment climate make it one of the most ideal jurisdictions to set up an offshore company in. Coupled with a stable political climate and safe environment, it is no wonder that the UAE is the crown jewel of the Middle East.
Find out more about the benefits of offshore company in Dubai now
Tetra Consultants’ team of dedicated professionals will guide you through the full process of offshore incorporation in Dubai, from identifying the best business structure for your company’s unique needs to Dubai company registration and opening an offshore corporate bank account.
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