One of the latest initiatives by the Dubai government has been the setting up of offshore companies, which will be covered under Jebel Ali Free Zone offshore Companies Regulations 2003 with effect from January 15, 2003. The regulations are made by the Chairman of the Dubai Port, Customs and Free Zone Corporation in accordance with the authority given to him by Dubai laws Numbers 1 and 4 of 2001.

Salient Features

• 100% foreign ownership
• Company can own real estate properties on Palm islands or any properties owned by Nakheel Company LLC or any other real estate properties approved by the Jebel Ali Free Zone Authority (JAFZA)
• Company can hold an account in a bank in the UAE for the purpose of conducting routine operational transactions.
• One residence visa will be issued for one director, if the Offshore Company is maintaining an office in the Free Zone.
• The Company will not be allowed to carry on business with people who are resident in the UAE or carry out any trade in the free zone or in the UAE, unless they have first obtained the appropriate license from the relevant competent authority.
• The registrar has the power to appoint competent inspectors to investigate the affairs of the offshore Company. Upon discretion of the registrar, inspection costs may be charged to any office bearer of the Company.

Proposal for Jebel Ali – Offshore Company

SCOPE OF WORK:

The following documents shall be arranged upon incorporating the company.

1. Memorandum of Association and Article of Association
2. Certificate of Incorporation
3. Share Certificate
4. Bank Account Opening Letter issued from JAFZA
5. Rubber Stamp

Setup requirements for Offshore Company in Jebel Ali

1. Minimum number of shareholder required- one (1).
2. Minimum number of Directors-2 (two)
3. Secretary required-1(one).
4. Director can also be a Secretary.
5. Directors or Secretary must be natural persons.
6. No minimum capital is prescribed.

Shareholders need to visit Jafza and sign the incorporation documents in the presence of Jafza-alternatively a power of attorney, notarized and legalized by UAE Embassy, can be issued to a nominated person who can then sign before Jafza.

LIST OF LEGAL DOCUMENTS REQUIRED FOR JEBEL ALI OFFSHORE COMPANY FORMATION

The following documents are required from the applicant before a certificate of formation can be issued. As indicated, they will have to be Notarized Attested by UAE Embassy or Consulate or any Arabic Embassies.

ALL APPLICANTS SHOULD SUBMIT AN APPLICATION FORM ALONG WITH THE MEMORANDUM AND ARTICLE OF ASSOCIATION AND ALL OTHER REQUIRED DOCUMENTS AND A CHEQUE FOR AED 10,000/- TOWARDS REGISTRATION FEES, IF URGENT THEN THE CHEQUE SHOULD BE MADE FOR AED 10,500/-

A. INDIVIDUAL APPLICANT:

1. Applicant personal profile (short C.V) with complete address and contact details.
2. Valid Passport Copy
3. Bank Reference letter in original and utility bill as proof of residence
4. Business Plan for the proposed company
5. Power of Attorney - Needed only if all the shareholders are not present for signing the MOA in JAFZA

B. NON-INDIVIDUAL APPLICANT:

1. Certificate of registration of the company (Attested & Notarised).
2. Certificate of good standing of the company (A & N).
3. Memorandum and Article of Association. (A & N).
4. Board resolution calling for the establishment of offshore company (A&N)
5. Business Plan
6. Profile of the Directors with complete address and contact numbers.
7. Valid Passport copies
8. Bank reference letter in original and utility bill as proof of residence for all the Directors.
9. Power of Attorney to one Director to represent the Board (A&N)

The registrar reserves the right to call for any extra documents if necessary.

JEBEL ALI OFFSHORE

Legislative Authority : JAFZA Offshore Company Regulations 2003

Going Offshore :

Today Tax laws are becoming complex and difficult in many countries. In order to minimize taxes, careful tax planning is to be made which is legal and effective way to optimize results and to manage the income and wealth.

There are certain territories, which offer world class infrastructure and incentives to individual and corporate to work hard and to create tax free income and accumulate wealth with tax planning and assets protection arrangement. Such territories or offshore financial centre should be selected considering many factors like political stability, government’s commitment for development, taxation on income and wealth, exchange control regulation, system of law and order, communication, transportation, banking and insurance services.

Going offshore is not only the priority of the “ rich “. The main and the most popular way to protect ones assets and save on taxes is to register an offshore company.

Given below is a highlight on few of the main features and regulation...

1. Jebel Ali Free Zone has opened up for Off Shore Companies Formation

Following are the brief text of the new regulation and features:

A. Legislative Authority:

The regulations are made by the Chairman of the Dubai Port, Customs and Free Zone Corporation in accordance with the authority given to him by Dubai Laws Numbers 1 and 4 of 2001.

B. Date of Enactment and Commencement:

These regulations are made on and came into force on 15th January, 2003.

Features:

• Company Status: limited liability
• Number of Shareholders: minimum one maximum not limited
• Suffix to the name: "Limited"
• Capital structure: decided by the shareholders

C. Restriction on Activity

i. Not allowed:

• To carry on business with persons resident in the U.A.E.
• Own an interest in the real property situated in the UAE other than approved by the Authority.
• To carry on banking, insurance, re insurance, insurance agent or insurance broker.
• To carry out any trade in the free zone or in the U.A.E.
• To carry on Professional services, consulting services, intellectual property, Media, security, publishing, advertising, Movie, production, Management, Gambling, Casino, Property Development, Game & win, Advisory, Real Estate, Military and Education.

ii. Allowed:

• Professional contact with legal consultants, lawyers, accountants and auditors in UAE.
• To hold shareholders and directors meetings in the UAE.
• To hold lease of property for use as registered office or own real property of the Palm islands or Jumeirah islands or any property owned by Nakheel, Emmar Company LLC or any other developers approved by the authority.
• To hold an account in a bank in the UAE for the purpose of conducting its routine administrative operational transactions.
• To become shareholders in FZE, FZCO, LLC in U.A.E.
• To engage in General Trading (Outside U.A.E.)
• To engage in commercial, industrial, agricultural and activities considering and observing international rules and regulations and statute law of the country where the company operates its activity including international trading, investment and other related activities.
• To open branch offices or representative offices in any part of the world.
• To carry on business as an investment holding outside UAE

D. Formation procedures:

1. Submit application to the Registrar
2. Provide Memorandum and Articles of Association prepared as per the regulation

E. Registration:

The registrar is the final authority to accept or reject the registration. Upon registration an offshore company registration number will be allotted and registration certificate will be granted.

F. Corporate Capacity:

An offshore company has the capacity and privileges of a natural person.

G. Shares & Capital Structure

All shares must be fully paid when allotted.
No bearer shares allowed.
No different classes of shares allowed.
Capital Structure is decided by the Shareholders.

H. Administration:

A registered agent (legal firms, auditors, consultants) is required to be introduced to the Authority.
A registered office to be maintained either in the Free Zone or in Dubai.
A registered agent’s office can also be used as the registered office.

I. Directors and Secretary:

Minimum number of Directors should be TWO. Every offshore company will have a secretary.

J. Meetings:

Shareholders meeting and Board meeting to be conducted periodically. Every company shall cause minutes of all proceedings at general meeting and its Directors.

K. Accounts and Audit:

Every offshore company shall keep accounting records. Accounts shall be preserved by it for 10 years from the date on which they are made. An offshore company’s accounts shall be approved by the directors and to be signed by one of them.
An auditor shall be appointed for conducting the winding up proceedings.

L. Winding up:

The winding up of an offshore company may either be:

• Summary under chapter 1 of the resolution;
• By its creditors under chapter 2 of the resolution;
• By the court under the UAE commercial Transactions Law No. 18 of 1993.

A liquidator shall be appointed for conducting the audit on annual basis.

M. Strike company off register:

The registrar may strike off the company from the register under the following circumstances by giving due notice:

• Offshore company is acting breach of Regulation 15 (permitted activities).
• To protect the good repute of the zone.
• Non payment of fees.