OFFSHORE COMPANY IN UAE

Offshore companies are very flexible corporate entities. This allows it to be integrated into numerous business arrangements. Proper use of an offshore company can achieve tax reduction and increased confidentiality. On the other hand, it is incorrect to assume that an offshore company incorporated in a no-tax jurisdiction is exempted from all of the complex tax regulations in force in high-tax jurisdictions. Contrary to popular belief, having an offshore company by itself does not exempt its owner from all personal tax obligations in their home country. If an offshore company is utilized cleverly, the business can lower, defer, or completely eliminate some taxes which would otherwise be payable. In an offshore jurisdiction, revenues can accumulate in a tax-free environment, allowing startups to grow faster and become more competitive.

Even so, implementing an offshore strategy practically will almost always face some obstacles due to anti-avoidance laws in the country where the beneficial owner resides or conducts business.

Thus, when considering offshore incorporation, we recommend consulting either an accountant or tax advisor in the client’s country of residence and in the country where the business operations will actually take place. With offshore companies, the laws in the offshore jurisdiction often have to be considered along with the laws and regulations of other countries, notably the countries where the offshore company will have its sales, contracts and assets.

Offshore companies may act as brokers – as sales agents, distribution companies, and import-export firms. In most cases, the company would purchase directly from the manufacturer or wholesaler and arrange for the goods to be delivered directly to the end user. When goods originate in one country, are sold in another, but the principal is located in a third country, this can be of particular interest. An importer can use an offshore procurement company to source goods abroad, and a producer can use an offshore sales company to distribute the goods. Profits on the difference between the purchase and sale price may be accumulated tax-free. Profits can be re-invested in further development of the business without incurring taxes.