Dubai (Jebel Ali)
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Special Status Non-Resident Company (Company limited by shares)
JAFZ Special Status Non-Resident Companies are offshore companies incorporated in the Jebel Ali Free Zone (Dubai).
JAFZA Non-resident companies are entitled to do business internationally and may not carry out trade or business within the UAE, or any free zone.
This includes rent offices or facilities within the territory. But they may exceptionally acquire real estate in UAE in designated areas and in government-approved development projects.
JAFZA Non-resident companies are also allowed to have relationships with residents providing certain professional services such as legal or consulting, and they have access to the banking system and can open corporate bank accounts in UAE.
The banking sector in UAE is considered solid and capitalized, being the main financial hub of the region, the Dubai International Financial Center, and another sizeable and expanding financial center, the Abu Dhabi Global Market.
Offshore companies in JAFZA are generally used to carry out activities such as international trade, overseas consulting and advisement, international professional services, holding company, hold intangible assets, investment, and joint investment company, intermediary brokers, overseas property owning, shipping and ship management.
Any activity related to banking, insurance, assurance, reinsurance, fund management, collective investment schemes, trust management or trusteeship, is strictly prohibited.
As they are considered non-residents for tax purposes, they cannot benefit from UAE tax treaties. However, they are usually authorized to own shares of FZ or local companies, or even establish a branch onshore.
A JAFZ Non-resident special status company is a powerful instrument for international trade, asset protection and wealth management.
Country code – AE
Legal basis – Although the legal code in UAE is based on Sharia and Civil Law, the Jebel Ali Free Zone is based on common law principles.
Legal framework - JAFZA Offshore Companies Regulations
Company form – Special Status Non-Resident Company (Company limited by shares).
Liability - The liability of its shareholders is limited to the amount of share capital.
Business restrictions – Special Status Non-resident companies are entitled to do business internationally and may not carry out any trade with residents or hold assets within the UAE, except real estate in certain approved areas.
Share capital – The law does not require a specific capital amount required, nor specifies a standard authorized capital. Shares may be in any currency and may be on a non-paid up basis. Bearer shares are not allowed.
Shareholders – Non-resident companies may be constituted from one up to fifty shareholders. Corporate shareholders are allowed, and there is no limitation on their nationality. Their details are not available to the public and the use of nominees is permitted.
Directors – A minimum of two directors are required, which must be natural persons and can be nonresidents. Their names are not publicly disclosed. Nominee directors are allowed.
Secretary – A local secretary must be appointed, who cannot be a corporation.
Registered Address – Non-resident companies must have a registered office address and a registered agent authorized by the Jebel Ali Free Zone Authority.
General Meeting – There is no requirement regarding annual meetings and their location.
Electronic Signature – Allowed.
Re-domiciliation – The re-domiciliation of a foreign company is allowed.
Compliance – JAFZ offshore companies must maintain accounting records, appoint an auditor and file the audited financial statements annually. They are subject to a registration fee, which must be renewed annually.
- Shareholders not disclosed
- Directors not disclosed
- Corporate shareholders permitted
- Corporate directors permitted
- Local director required
- Secretary required
- Local secretary required
- Annual general meetings required
- Redomiciliation permitted
- Electronic signature
- Annual return
- Audited accounts
- Audited accounts exemption
- Exchange controls
- Common law for corporate matters Legal basis
- 1 Minimum shareholders
- 1 Minimum directors
- USD 1 Minimum issued capital
- - Minimum paid up capital
- USDAny Capital currency
- Anywhere Location of annual general meeting
- 2018 AEOI
Corporate income tax – The UAE is introducing a tax regime that will tax worldwide income (excluding dividends and capital gains) at the following rates.
- 0%, for taxable income not exceeding AED 375,000;
- 9%, for taxable income exceeding AED 375,000.
Although MOF's FAQ addresses requirements for a 0% tax applicable to Freezone companies, it is silent on whether offshore companies will be subject to UAE corporate income tax. However, we would expect them to be treated in line with general free zone entities. Further details are provided below.
Other taxes – In U.A.E. there is no personal income tax, capital gains tax, real property tax, inheritance tax or estate duty, capital transfer tax, gifts tax or wealth tax.
There is a real property tax levied on the transfer of properties, at rates that vary from 2% to 4%, depending on the Emirate where the property is located. Some municipalities, e.g. Dubai, also levy an annual property tax on the assessed rental value of the property.
There is V.A.T. at 5% on most goods and services.
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- 0% Offshore Income Tax Rate
- 9% Corporate Tax Rate
- 0% Capital Gains Tax Rate
- 0% Dividends Received
- 0% Dividends Withholding Tax Rate
- 0% Interests Withholding Tax Rate
- 0% Royalties Withholding Tax Rate
- 0 Losses carryback (years)
- 0 Losses carryforward (years)
- 0% Personal Income Tax Rate
- 5% VAT Rate
- 76 Tax Treaties
The United Arab Emirates is a former British protectorate and currently a federation of the Middle East, located to the east of the Arabian Peninsula. It borders Oman to the southeast, with the Persian Gulf to the north and Saudi Arabia to the west and south. It is composed of a hybrid monarchy consisting of 7 emirates, Abu Dhabi, Ajman, Dubai, Fujairah, Ras al Khaimah, and Umm al Qaywayn.
It has a population of 9 million. Its capital is Abu Dhabi, but the most populated and popular city is Dubai. Arabic and English are their official languages. The official currency is the United Arab Emirates Dirham (AED), pegged to the US dollar at an exchange rate of 3.67:1.
The Supreme Council, made up of each emirate Sheikhs, is the highest political decision-making body in the country. Although each Emirate retains a considered political, economic and judicial autonomy, with different rules and regulations.
The federation is one of the richest countries in the world, supported by a liberal and open economy with the eighth highest per capita income worldwide and a considerable annual trade surplus.
Having the seventh largest oil reserve in the world, its economy is clearly dependent on this commodity fluctuations. In recent years efforts have been made to diversify the economy, be less oil-dependent and develop sectors such as retail, financial and tourism.
A clear example of this strategy is the establishment of free zones to attract foreign capital to invigorate the private business sector.
Especially in Dubai, where oil and gas, barely represent 3% of the economy. Positioning itself as the regional retail hub and a major player in the export market of industrial and manufactured goods, with the 9th largest port worldwide in terms of volume of goods.
As well as being the largest financial hub in the region and being positioned as a top tourist and entertainment destination, where the most luxurious hotels worldwide are located, which in turn is the engine of the real estate, infrastructure, and retail sectors.
The Jebel Ali Free Zone is in the Emirate of Dubai and is the main trading hub of the Middle East, located around the world’s largest artificial port and the ninth in volume of goods.
Although conceived for the distribution of goods throughout the Arabian Gulf, it currently supports the formation of companies from a wide range of activities ranging from commercial, manufacturing, e-commerce or professional services.
Tax treaties Map
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