Offshore Company formation, a complete guide

1. Offshore Company formation, a complete guide
Expanding and shifting your business activity through a UAE Offshore
Company set up
The Emirate of Ras Al Khaimah (RAK) has launched an offshore facility - The
second in the UAE.
The International Business Companies (IBC) Registry allows foreign
investors to register offshore companies as RAK Offshore, a division of RAK
Investment Authority (RAKIA) without the need to establish a physical
presence in the UAE.
Companies are usually incorporated within 24 hours. Any non-resident
individual or corporate entity can register a company.
Many jurisdictions are considered only as tax havens. The United Arab
Emirates is a 'real' country with a 'real economy' with a population of
approximately 4 million. It has an established history of international trade,
finance and business, and today it is one of the fastest growing countries in
the world with one of the highest standards of living.
The choice of a suitable jurisdiction is an important decision and requires
careful considerations. Important aspects to be examined and which RAK
offers may be outlined as follows:
Political and economic stability of the jurisdiction
• The availability of a modern and flexible legislative framework
• Simple incorporation and filing requirements

2. • The availability of Double Taxation Avoidance Agreement (DTAA)
• State of the art banking system
• State of the art telecommunication facilities
Uniqueness
UAE is not a dependent or 'overseas' territory of another country
Pressure has been put on traditional low tax jurisdictions by the Commission
of the European Community (EU) in conjunction with the Organization for
Economic Cooperation and Development (OECD). The UK parliament has
converted British Dependent Territories to British 'Overseas' Territories (in
1998). The UK government may apply greater control over its tax haven
progeny (ie Bermuda, BVI, Caymans, Gibraltar, Turks & Caicos)
UAE has Double Taxation Avoidance Agreements (DTAA) with a number of
countries
Double taxation agreements prevent individuals and corporations from being
susceptible to paying tax on the same item during the same time period.
These agreements determine which of the two states concerned should levy
tax in a particular situation: Austria, Belarus, Belgium, Canada, China, Czech
Rep., Egypt, Finland, France, Germany, India, Indonesia, Italy, Lebanon,
Malaysia, Malta, Morocco, New Zealand, Pakistan, Poland, Romania,
Singapore, Sudan, Thailand, Tunisia, Turkey, Ukraine.
UAE is not a member of the Organization for Economic Cooperation and
Development (OECD)
No foreign exchange of information.
UAE is not on the OECD 'blacklist' of tax havens (nor the FATF blacklist)
UAE is not a member of the EU, and is not subject to EU regulation
Main activities of UAE OFFSHORE COMPANY
• General Trading
• Consulting and Advisory Services
• Holding Company (Buy/Hold/Sell stakes of companies)
• Investments and Joint Investments Company
• Property Owning
• International services
• Professional Services
• Shipping and ship management companies
• Commission Agents Company – Intermediary Brokers (IB's)

3. Fiscal & Regulatory benefits of UAE OFFSHORE COMPANY
• 100% income tax exemption
• 100% corporate tax exemption
• 100% capital and profit repatriation
• 100% ownership in Free Zones
• No Import or Export taxes
• No capital gains tax
• No Value-added tax
• No Withholding tax
• Proximity to entire Gulf and global markets
Main features of UAE OFFSHORE COMPANY
• It does not need to have physical offices in the UAE.
• It may not carry on business within the UAE.
• It may not obtain UAE Residency Visa.
• It may have non UAE resident as director or shareholder.
• It may have UAE resident as director or shareholder.
• It may have corporate shareholder/corporate director
• It does not require the shareholder/director to be physically present in the
UAE for incorporation
• It may own real estate in the UAE, with prior authorization from RAK
Investment Authority.
• It may not do banking and insurance business without special license.
• It may maintain bank accounts and deposits in the UAE or worldwide.
• It is not obliged to maintain its books and records.
• It may hold shares in other UAE and worldwide companies.
• It may own yachts registered in the UAE.
In Brief
Location Gulf
RAK Offshore is the first comprehensive
offshore centre in the Gulf region.

4. Time Zone GMT+4
Between Europe and Asia. Open on
Sundays.
International Business
Companies
Yes
First centre in the Middle East to offer IBC
registration.
Trusts No Not offered yet.
Offshore Banking Yes
Authorized to open bank account with UAE
banks.
You can register International Business Companies bearing the status of
'Limited' or 'Ltd.' at RAK Offshore.
Middle East and the Gulf
Thanks to geographical proximity and cultural similarities, RAK Offshore is
an attractive location for businesses from countries in the Gulf and the
Middle East. These countries already have strong business links with the
United Arab Emirates. RAK Offshore is also likely to benefit from the fact
that some countries in the region suffer from political unrest and/or asset
protection issues.
Russia & CIS Countries
Confidentiality and financial privacy coupled with issues such as political
uncertainty, weak currencies, taxes, severe foreign exchange controls and
asset protection in Russia and CIS countries make RAK Offshore a viable
option for businesses from these regions who seek an offshore location.
Europe, India & Other Countries
Companies in this region have a favorable image of the UAE as a business
centre. Add to that their interest in investing in the booming economies and
financial markets of the GCC and it is not hard to see why RAK Offshore is a
perfect offshore location for these companies.
Statutory description of
private limited company
International Business Company (IBC).
Governing corporate
legislation
RAK Investment Authority (RAKIA) is the
governing body and the companies is regulated
under RAK Offshore Regulations 2006.

5. Time-scale for
incorporation
24 hours. There is a time difference of +4 hours
to GMT.
Availability of ready-
made companies
No.
The regulations
governing availability of
names
Generally the nature of the company has to be
indicated through the words "Limited" or "Ltd.".
Minimum and maximum
number of shareholders
A company may be formed with minimum of one
shareholder and there is no limitation as of
maximum.
Statutory minimum paid-
up capital requirements
Capital is required for the incorporation of an
offshore company but there is no minimum
capital requirement.
Classes of share
available
Share capital may be divided into different
classes. Bearer shares are not allowed. Shares
may be issued fully, partly or nil paid.
Denomination of share
capital
AE Dirham and US Dollar can be used as the
denomination for the capital. Any foreign
currency is acceptable but prior consent has to
be approved by the RAK Authority.
Annual Costs As per request.
Residency requirement
on shareholders or
shareholders' meetings
No requirement for a local resident to be a
Shareholder, only proof of residence is required
to be submitted.
Information published
relating to shares and
shareholders
The company must keep a copy of the share
register at the registered office address. This is
available for inspection by the members and is
not publicly available. The company may
voluntarily file at the Registrar the copies of the
register of members.
Minimum and maximum
number of directors
Sole directors are permissible. There is no
statutory limitation for maximum number of
directors permitted, although the articles may
impose a limit.
Are corporate directors
or corporate
shareholders permitted?
Yes. Corporate entities are even permitted to
hold shares in a RAK Offshore companies.

6. Nationality and residency
requirements of directors
The director can be a resident or any foreign
citizen but is required to submit the proof of
residence and other relevant documents.
Nature of the powers of
the directors
The directors have all the powers of the
company that are not reserved to the members
under the Regulation or in the memorandum and
articles.
Directors' meetings
The directors may meet at such times and
places within or outside the UAE as the directors
may determine to be necessary or desirable.
Telephone and other electronic meetings are
allowed. Subject to a requirement in the
memorandum and articles the director shall be
given reasonable notice of meetings of directors,
although this rule is subject to a waiver of
notice.
The presence of a director at a meeting shall be
deemed to constitute a waiver on his part. The
quorum of a meeting of directors is fixed by the
memorandum and articles but where no quorum
is fixed, a meeting of directors is properly
constituted if one half of the total number of
directors is present in person or by alternate.
Information published
relating to directors
There is no public register of directors, although
the company may voluntarily file its register of
directors with the Registrar.
Must accounts be
prepared by the
directors?
A company incorporated under the Regulation
shall keep such accounts and records as the
directors consider necessary or desirable in
order to reflect the financial position of the
company.
Must such accounts be
filed with the financial
authorities?
No.
Must such accounts be
audited, and if so by
whom?
No. They may be audited by persons approved
by the directors.
Must the company have
a registered presence in
Yes. The company must at all times have a
registered office and registered agent within Ras

7. the territory of
incorporation?
Al Khaimah. The registered office must be
maintained either by the company or its
registered agent.
What records must be
maintained in the
territory and are they
available for public
inspection?
A copy of the share register and the register of
directors and an imprint of the common seal
must be kept at the registered agent's address.
Other records such as minutes of meetings of
directors, members and copies of all resolutions
may be kept at such places as the directors
determine, but copies must be kept at the
registered agent's address.
These are not available for public inspection,
other than by members or directors. If copies of
these registers and documents are kept other
than by the registered agent, the registered
agent must be notified of the location of the
original.
If the company fails to comply with these
provisions it is liable to a fine.
Can the company make
secured loans?
Yes.
Can the company make
unsecured loans?
Yes.
What are the limits
placed on the company's
borrowing powers?
None. There are no debt/equity ratios under the
law.
Is there a register of
company charges?
A company may maintain at its registered office
a register charges and other encumbrances. This
is not mandatory. Similarly, a public register
may be maintained at the option of the
company.
Company seal A company must have a common seal.
Re-domiciliation
provisions
A company incorporated under the laws of a
foreign jurisdiction may continue its existence as
a company registered under the Act. Similarly,
RAK Offshore business companies may transfer
their domicile to foreign territories that permit
such procedures.

8. Vithul V Murali MBA
Asst. Vice President | ADAM Global
Dubai Mobile : +971 50 55 73 538
Email : vithul.murali@adamglobal.com
Skype : Vithul.murali
www.adamglobal.com