Offshore Financial Centres - Dubai

General Information

Dubai is part of the United Arab Emirates, a constitutional federation of seven emirates located along the southeastern tip of the Arabian Peninsula. Qatar lies to the west, Saudi Arabia to the south and west and Oman to the north and east. The federation was formally established on 2 December 1971.

The initial development of Dubai was funded by its oil wealth but reserves are rapidly becoming depleted and the government has devoted enormous resources to developing an economy, which will prosper in the future without requiring the support of oil revenues. It has been spectacularly successful in its efforts. The national airline, Emirates, is one of the fastest growing in the world and there has been massive investment in hotels and property of all descriptions, shopping centres and other facilities for tourists. Restrictions on the ownership of land and businesses by foreigners are being relaxed.

Dubai has long been a major port and the Jebel Ali Free Zone has attracted multinationals from around the world to take advantage of its strategic location for servicing the Gulf markets and its situation midway between east and west.

The Dubai International Financial Centre is expanding rapidly and providing stiff competition for the longer established banking institutions of Bahrain. A more recent innovation has been the adoption of the Offshore Company Regulations 2003, which introduced the Dubai Offshore Company, also known as the Jebel Ali Offshore Company. Dubai is already a formidable rival, in this area, to the longer established offshore financial centres such as the Bahamas, British Virgin Islands, Channel Islands, Isle of Man etc.

Taxation

Dubai does not impose income tax, capital gains tax or estate or inheritance taxes. It is said to be considering a value added tax.

Legal system

The legal system of Dubai is based on the Sharia law and this needs to be borne in mind by non- Moslems acquiring assets in the Emirate. Sharia law incorporates strict rules, for example, in the matter of inheritance and this can result in unintended consequences for the unwary.

The Dubai International Company

Referred to above, the Dubai Offshore Company incorporates most of the features to be expected in an offshore company. Its main characteristics are set out in the table below. Some of the other salient features are,

• 100% foreign ownership permitted
• It must have a Registered Office and a Registered Agent in Dubai. The Registered Agent must be an approved person
• It can own real estate on the Palm Islands and in various other developments by certain government owned development companies. It may not otherwise trade in Dubai.
• The company name must end with the word "Limited". Licensable activities such as banking, insurance and investment management are not permitted.
• It can maintain banking accounts in the U.A.E. and elsewhere.
• If the company maintains an office, as opposed to a Registered Agent in the Free Zone, a residence visa may be obtained for one director
• The Registrar has power to investigate its affairs and charge the costs to any office bearer of the company.

The Dubai offshore company regulations

Why not talk to us about forming an offshore company in Dubai? Call +353 1 431 9663 or Click Here to contact us.