Expanding a business internationally can be an exciting venture, and the United Arab Emirates (UAE) is a prime location for many entrepreneurs and investors. UAE offers various options for business expansion, including the option of obtaining an offshore license. An offshore license provides unique advantages for companies looking to expand their operations and tap into the UAE market. This article serves as a guide to understanding the offshore license in UAE and its benefits.
What is an offshore license?
An offshore license allows companies to establish an offshore entity in the UAE without having a physical presence. This means businesses can operate and conduct business outside the UAE but still benefit from the country’s favorable business environment and legal framework.
Tax efficiency: One of the main advantages of an offshore license in the UAE is its tax benefits. Offshore companies are exempt from corporate and income taxes, providing significant savings for businesses.
Asset protection: An offshore license allows businesses to protect their assets by keeping them separate from their onshore operations. This can benefit asset management, estate planning, and wealth protection.
Confidentiality: Offshore companies offer a higher level of confidentiality and privacy. The details of company shareholders and directors are not publicly disclosed, ensuring confidentiality for businesses and their stakeholders.
Ease of set-up: Obtaining an offshore license is relatively straightforward and streamlined. It involves minimal documentation and fewer regulatory requirements than onshore companies, making it a convenient option for business expansion.
International business: An offshore license in the UAE allows businesses to conduct international business and enter global markets. It provides credibility and opens doors for international transactions and partnerships.
Offshore companies in the UAE are typically limited to specific business activities. These activities include:
- Holding and managing investments
- Holding shares in other companies
- Owning intellectual property rights
- International trading and commerce
- Asset protection and estate planning
- Professional services such as consultancy, legal, accounting and more.
While offshore companies in the UAE offer numerous advantages, they also have certain restrictions. Offshore companies are not allowed to conduct business activities within the UAE market. They cannot obtain local UAE trade licenses or directly engage in commercial operations within the country.