The current world is subject to the most powerful globalization: the borders between many states have been erased, emigration has long been considered something shameful or dangerous, large banks open branches on different continents. And entrepreneurs today, in order to earn money, are not limited only to their country. You can set up a company almost anywhere. If the tax policy of your own state is unnecessarily cruel and squeezes the last juices out of your life’s work, then you can always turn your eyes to the powers that are more hospitable in relation to state extortions.
One of the most loyal in matters of taxes and comfortable for the activities of entrepreneurs states today is the United Arab Emirates. Opening a company here is the dream of many businessmen, and it may be easier than you think.
What is the easiest company to open in Dubai?
Since foreign entrepreneurs are a serious source of income for the state budget, the UAE government offers them various options for doing business in the UAE. Now foreign businessmen can open three types of companies in the UAE. Each of these variations has both advantages and, albeit fearless, but still disadvantages. You can find more information about offshore company registration at the our official website.
A local company is an enterprise that you can register in any corner of the country, and there are no geographical restrictions on doing business. Additional pluses:
- the possibility of lending by a local bank;
- participation in government orders and tenders;
- residence visa for you, your family and some of your employees.
However, this type of company has one, but a very serious drawback: it requires the involvement of a local sponsor, who will become the official owner of your company, since he will get at least 51% of the shares. Often foreign businessmen go to the trick: they are looking for a nominal partner with whom they conclude an additional agreement that he agrees to be content with an annual material reward (the government requires you to give at least 20% of your income) and undertakes not to interfere with your leadership. If you decide to do the same, then remember that such an agreement will not be legally binding, since the owner for the UAE government is the person indicated as the founder in the documents. Be serious about choosing a partner or look for other options for doing business in Dubai. For example, look at free economic zones.
Onshore company in SEZis an enterprise that is registered in specially designated, tax-free territories, of which today there are several dozen in Dubai itself. The FEZ has its own special rules: 100% of the shares can be owned by a foreigner, you can conduct international trade, you can do business within the FEZ itself, only access to the “mainland” (to the Arab territory outside the FEZ) will be closed. Don’t be put off by these restrictions, because the UAE’s free economic zones have one of the best infrastructures in the country, international ports and airports, so you won’t be disadvantaged in any way. Since you are opening an onshore company, it means that there will be a real office in the SEZ, from which you will conduct business. Not only you, but also several of your employees will receive a residence visa.
An offshore company in the UAE is a company that is registered in one of the free economic zones of the country and receives a local legal address, but you can conduct activities where it is convenient for you. At least at home.
What are the advantages of opening an offshore company in Dubai?
Offshore (translated from English as “out of borders”) industry was not invented by the Arabs. Territories free from taxes have existed for a long time in many powers, including European ones. But, unlike classic offshores, the UAE has never had a reputation as a tax haven, so this country has been chosen by businessmen who not only want to hide their income from state tax officials, but also want to continue doing business without interference.
The main advantages of registering an offshore company in Dubai are as follows:
- You, being a foreigner, can remain the sole owner of the company. There is no need to look for a local partner, and there is no need to share your annual profit with someone.
- In the United Arab Emirates, and in Dubai in particular, corruption schemes, bribery, nepotism, creation of artificial obstacles for entrepreneurs, etc. are not practiced, and this is very important for effective work.
- The state will not encroach on your profits. What you earn will not be taxed, and you can use all income as you wish.
- The government of Dubai does not practice any currency restrictions in relation to foreign businessmen.
- Dubai has international ports and airports, which is especially important for international trade and business relations with foreign partners.
- The UAE SEZ has an excellent infrastructure in the form of new and comfortable office buildings, warehouses, residential complexes and much more. And although this point is not relevant for you yet, it is likely that someday you will want to turn your offshore company into an onshore one.
- The opportunity to work in a familiar environment in a favorite office with a native team. You can use an offshore company in the UAE only as a means to optimize taxes.
- The confidentiality of your data, which will be under reliable protection, unless the tax department of your country requires it, presenting a court order, which is extremely rare.
- You do not need to submit annual returns to the Dubai government. You only have to keep internal records, which you can keep wherever you like.