The concept of offshore was first introduced in Dubai in late
2001 but it took concrete shape on January 15, 2003 when Jebel Ali
Free Zone Offshore Companies Regulations 2003 came into
force.
Jebel Ali Free Zone Offshore Companies Regulations 2003 laid down
detailed rules and regulations for establishing offshore companies
in JAFZA.
An offshore company is defined as a non-resident company having a
corporate legal entity. Jebel Ali Free Zone Offshore
Companies
Regulations 2003 allows the formation of an offshore company by
individuals or a corporate body.
Distinctive benefits of Jebel Ali Offshore Companies include:
- No requirement to acquire office premises.
- Easy and simple procedure for registration.
- Minimum operating cost.
- Highest asset protection.
- 0% tax environment.
- Opportunity to invest in property and stocks worldwide.
- Unrestricted flow of capital.
- Transfer of assets, stocks, etc.
- 100% foreign ownership.
- No minimum capital requirement.
Bank accounts can be opened and operated in the name of the
offshore company subject to the requirements and approval of such
local and international banks where such an account can be
opened.
In addition to the above, upon registration of a Jebel Ali Free
Zone Offshore Company, you are permitted to open a branch office of
the same outside the UAE with office premises and employees subject
to the approval and requirements of the proposed branch
jurisdiction.
Distinctive features & Restrictions of the Jebel Ali
Free Zone Offshore Company
Shareholders
- A minimum of one shareholder is required.
- Corporate shareholders are permitted.
- Shareholders will decide capital structure of the Company.
- No fiscal minimum capital requirements have been stipulated.
- Bearer shares are not permitted.
- Different classes of shares are not permitted and shares have to be fully paid when allotted.
- A shareholders meeting should be conducted periodically (at least once in a year).
- Every offshore company shall maintain minutes of all proceedings at general meetings.
- The Register of Members shall be open for inspection by any member of the offshore company.
- If inspection is refused, the company commits an offence.
Currency
Where previously the denominated currency of the share capital was
to be stipulated and paid up in UAE Dirhams, the capital can now be
denominated in U.S. Dollars.
Directors & Company Secretary
A minimum of two individual directors are required to be appointed
and corporate directors are not permitted to be appointed or act as
directors of an offshore company. Every company shall have a
secretary who may also be a director of the offshore company.
Furthermore proposed directors of an offshore company who have
valid residency visas will require a no-objection letter from their
sponsor to take up the position of a director in an offshore
company.
Criminal Investigation Department (CID)
Approval
When registering an offshore company the shareholders, directors
and company secretary are screened by the CID Department in the
Jebel Ali Free Zone for security clearance to ensure the
shareholders, directors and secretary are able and suitable to take
up such positions within the offshore company. The CID screening
and approval process should be undertaken as a first step prior to
commencing the registration process of the offshore company.
Confidentiality
The details of the offshore company including the details of the
shareholders, directors and company secretary are not available for
public inspection. Only the registered agent of an offshore company
has access to information and details of the offshore
company.
Restrictions
- To carry on certain business activities such as Banking, Insurance, Re-Insurance, Insurance Agency or Insurance brokerages etc. are closed for offshore companies.
- To carry on business with persons resident in the United
Arab
Emirates. - To carry on any other business which may, by regulations made by the authority, be prohibited.
- Names of offshore companies must end with limited.
The Registered Agent
In order to register an offshore company there is a requirement to
appoint a registered agent. The registered agents role will provide
the offshore company with its registered office address and act as
the intermediary between the offshore company and the free zone
authority where communication can be maintained in fulfilling the
offshore company's filing requirements and obtaining necessary
documentation and attestation of documents as and when required for
the operation of the company.
Developments
Recent developments with the JAFZA Offshore Registrations
Department have seen the implementation of an online application
system which registered agent's have access to in order to
process changes to offshore companies, obtain copies of official
documentation and attestations on behalf of their client's
company. The new online system has the intention of increasing
administrative efficiency to a much higher level
Penalties have also been implemented and commenced towards offshore
companies who do not fulfill their obligations to renew their
offshore registrations on an annual basis. Where offshore companies
have failed to renew their annual renewal registrations at the time
of expiry, the free zone authority have further taken steps to
halting all assignments to process actions and changes to offshore
companies when requested by the client. The result of this action
would no doubt create problems towards the operation of such
business which are in use and operational inside and outside the
UAE.
The offshore companies registration department in the Jebel Ali
Free Zone have also implemented a procedure whereby in the event
that an offshore company is to be liquidated / wound up, that
particular offshore company should have a valid registration. In
the event the registration has expired the offshore company will be
required to renew its registration for an additional year prior to
applying for liquidation.
Requirements for registration of JAFZA Offshore
Company
Individual Applicant |
Non-Individual Applicant |
Applicants personal profile (short CV) |
Certificate of registration of the company (N&A)* |
Passport Copy |
Certificate of good standing of the company (N&A)* |
Bank Reference |
Memorandum and Articles of Association of the company (N&A)* |
Proof of Residence (copy of utility bill) |
Board Resolution calling for the establishment of the offshore company with a power of attorney authorizing individual to sign on behalf of the company to establish offshore company (N&A)* |
NOC Letter from Director / Secretary sponsor company (if such director or secretary is resident in the UAE). |
NOC Letter from Director / Secretary sponsor company (if such
director or secretary is resident in the UAE). |
Note
(N&A)* to be Notarized and Attested by the UAE Consulate where
outside the U.A.E.
Cost
Registration costs are currently AED 10,000 payable to the Jebel
Ali Free Zone Authority with an annual renewal cost of AED 2,500
per annum from the date of registration.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.