- →
-
Contact Form
-
The phrase covers two different instruments, and the distance between them is the reason this page exists. An offshore company in Dubai means JAFZA Offshore, registered with the Jebel Ali Free Zone Authority, and the other main option is RAK ICC in Ras Al Khaimah. Both are international vehicles and both allow full foreign ownership. Registration does not come with a trade licence: under JAFZA’s Offshore Companies Regulations 2023 an offshore company must obtain the appropriate licence or permit from the competent authority for any business activity it carries on, in the zone or elsewhere.
The difference takes three lines. A free zone company is an onshore UAE company: it holds a trade licence, takes premises in the zone, can hold an establishment card and can sponsor residence visas. An offshore company is registered rather than licensed: it needs a separate licence or permit for any business activity, including trading inside the UAE market, and under JAFZA’s rules it can apply for residence visas for its members only if it owns property in a designated freehold area. An offshore company exists to own things rather than to operate: shares, intellectual property, vessels, and property where the relevant authority permits it.
So if the plan involves invoicing UAE customers, hiring staff, renting an office or living in the Emirates, the page you want is free zone company formation in the UAE, and the mainland alternative sits under company formation in the UAE. If the plan is to hold an asset cleanly across borders, read on.
What those have in common is ownership without operations. The moment a plan requires staff, premises or a UAE customer, the offshore register stops being the answer.
| Point of comparison | Offshore company: RAK ICC, JAFZA Offshore | Free zone company |
|---|---|---|
| Trade licence | Not issued with registration; any business activity needs its own licence or permit | Yes, listing the permitted activities |
| Premises in the UAE | No | Yes, from a flexi desk to a full office |
| Residence visas | Only for members of a JAFZA offshore company that owns property in a designated freehold area, on application and subject to eligibility | Yes, sponsored through the establishment card |
| Trading inside the UAE | Only with the licence or permit the activity requires | Through a mainland distributor, agent or entity |
| Typical use | Holding shares, intellectual property, vessels and permitted property | Operating, invoicing, employing |
| Registered agent | Required, and the only channel to the registry | Not required |
| Ownership visible to the public | No | No |
No trade licence comes with registration, so there is no permitted activity inside the country and no invoicing of UAE customers until the company holds the licence or permit the activity requires. No office, desk or warehouse in the Emirates, because premises follow a licence. No establishment card either, so no residence visas for a manager or employees; the one route JAFZA’s 2023 regulations open is a residency visa for the company’s members where the company owns property in a designated freehold area, on application and subject to the Authority’s eligibility requirements. And in the normal case no tax residency certificate from the Federal Tax Authority, which is the document that opens the treaty network. Any provider who implies otherwise is describing the free zone product and selling it under the offshore name.
An offshore company is formed and maintained through a registered agent approved by the registry, and it stays that way for life. The agent provides the registered office, files with the registry and is the channel through which changes of shareholder, director and constitution are made. You do not deal with the registry directly, which is why the choice of agent matters more here than in a free zone.
On ownership there is no secrecy to sell. The UAE requires a beneficial owner register and does not publish it. Under Cabinet Decision No. 109 of 2023 companies keep a register of beneficial owners and a register of partners or shareholders and file them with their licensing authority, on a threshold of 25 per cent or more of the capital or the voting rights, directly or indirectly, or control by other means such as the right to appoint or remove a majority of the directors. The data stays confidential and reaches competent UAE authorities on request. The financial free zones, DIFC and ADGM, run their own regimes, equally private. Nothing in that framework leaves an offshore vehicle outside it: the registered agent must know the beneficial owner, and so must any bank.
Two further frameworks are better stated now than discovered later. Economic substance rules attach to relevant activities, with a reduced test for pure holding companies and the full test for active income generating work. And FATCA and the Common Reporting Standard mean financial account information is exchanged automatically with the tax authority where the beneficial owner is resident. A UAE offshore company is a legitimate instrument in 2026. It is not a private one.
The old assumption that a UAE offshore company simply sits outside tax stopped being safe in June 2023, when the federal corporate tax arrived with a headline rate of 9 per cent. The 0 per cent rate that fills UAE marketing is not an offshore feature at all. It belongs to a qualifying free zone person on qualifying income and comes with conditions on substance, dealings between related parties, audited accounts and a de minimis limit on non qualifying revenue, all set out on the free zone page. Whether a particular offshore vehicle falls inside the corporate tax regime depends on its register and on what it does, and it is a question to settle with advice before incorporation.
For most owners the larger exposure is not UAE tax at all. A company managed and controlled from the owner’s own country can be tax resident there under that country’s rules whatever its certificate of incorporation says, and controlled foreign company rules can attribute its profits to the owner directly. Without UAE substance the company will not in the normal case obtain a tax residency certificate, so the UAE treaty network, which the Ministry of Finance reports as 137 double taxation agreements concluded with most in force, is not available to it. That calculation belongs at the start of the exercise.
Almost everything a UAE bank looks for is something an offshore company does not have. Compliance teams decide on the profile: ownership, source of funds, counterparties, and whether the activity on the trade licence matches the business narrative. An offshore company has no licence, no premises and no local manager, so the file is thinner and the questions run longer, particularly on source of funds and on the assets the company is to hold. Fewer banks take the profile at all, and a sensible planning assumption is that it takes longer than the 5 to 10 weeks a licensed free zone company should expect. Our page on bank accounts for UAE companies sets out the document pack and the sequence. Plan the structure around the account rather than the other way round.
It is the right vehicle when the company exists to own something: shares in operating companies across several countries, a joint venture holding, intellectual property, a vessel, or UAE property where the authority permits it, and where the owner already understands the substance and residence position in their own country.
It is the wrong vehicle when the objective is a residence visa, an office, staff, UAE customers, a tax residency certificate, or privacy from your own tax authority. Each of those points somewhere else, usually to a free zone company and occasionally to the mainland. If an offshore company is right but the UAE is not obviously the right register, our guide to setting up an offshore company covers the process and the choice of jurisdiction, and offshore shelf companies covers the ready made route where timing is what decides.
A free zone company is an onshore UAE company: a trade licence, premises in the zone, an establishment card, residence visas, and a place inside the corporate tax regime with a route to 0 per cent as a qualifying free zone person on qualifying income. An offshore company on the RAK ICC or JAFZA Offshore register is registered rather than licensed: under JAFZA’s 2023 regulations it needs a separate licence or permit for any business activity, and it can apply for residence visas for its members only if it owns property in a designated freehold area.
In one case. JAFZA’s Offshore Companies Regulations 2023 let an offshore company that owns property in a designated freehold area apply to the Authority for residency visas for its members, subject to the Authority’s eligibility requirements. Otherwise residence visas are sponsored through a company’s establishment card, which follows a trade licence that registration as an offshore company does not provide. If residence in the Emirates is the aim and no freehold property is involved, a free zone or mainland company is the better starting point.
Not on its registration alone. JAFZA’s Offshore Companies Regulations 2023 require an offshore company to obtain the appropriate licence or permit from the competent authority for any business activity in the zone or elsewhere, so invoicing UAE customers or running local operations needs that licence first. It can hold shares, intellectual property, vessels and, where the authority permits, UAE property, and it can invoice internationally. Selling locally usually means a mainland entity, a branch or a licensed distributor.
The federal corporate tax has applied since June 2023 at a headline 9 per cent, so the pre 2023 assumption that an offshore register sits outside tax no longer holds by default. The 0 per cent rate belongs to a qualifying free zone person on qualifying income, not to offshore vehicles. How a given company falls in scope depends on its register and its activity, a question for advice before incorporation.
No, and that is true of UAE companies generally rather than a feature of the offshore register. Under Cabinet Decision No. 109 of 2023 beneficial ownership is recorded and filed with the licensing authority on a 25 per cent threshold, and released to competent authorities on request rather than to the public. The registered agent and any bank will know the owner, and account information is exchanged under FATCA and the Common Reporting Standard.
In the normal case, no. Claiming under one of the 137 agreements the Ministry of Finance reports as concluded needs a tax residency certificate from the Federal Tax Authority, and a company with no UAE substance, premises or staff will not normally be given one. If treaty access is the point of the structure, it has to carry real substance somewhere.