Over the years, Dubai has consistently followed policies directed towards instilling market confidence and enhancing the economy by the encouragement of local and foreign investment.
To that end, on January 13, 2003 the Jebel Ali Free Zone Authority – Offshore Companies Regulations, 2003 (the “JAFZA Offshore Regulations“) was enacted allowing the incorporation of offshore entities in the Jebel Ali Free Zone. Apart from enjoying all the advantages of other international offshore companies, the said companies have an added benefit of Dubai’s reputation for business transparency and sustainable development.
The salient features of a JAFZA Offshore Company are as follows:
The following are the requirements of a JAFZA offshore company.
A minimum of one shareholder, whether individual or corporate in nature, is required. Shareholders meetings should be held periodically (at least once a year). Every company shall maintain minutes of all proceedings at general meetings.
The minimum capital to be declared in the Memorandum and Articles of Association is AED 10,000/- All shares rank equally and carry equal voting rights and must be fully paid when allotted. Share certificates must be issued within two months from the date of payment of the capital. Bearer shares or different classes of shares are not allowed.
A minimum of two directors are required and corporate directors are not permitted. The number of directors can be fixed in the Memorandum and Articles of Association. Details of the directors are not available for public inspection. The first directors are appointed by the incorporators at the time of incorporation, and thereafter, are elected by the shareholders. Any shareholder may be appointed as a director and/or a secretary.
Each director holds office for a period determined by the shareholders. In the event of death or resignation, another director may be appointed by a resolution of the shareholders. However, a casual vacancy created by removal of a director may be filled by a resolution of the shareholders passed at the general meeting.
Every JAFZA offshore company is required to have a secretary, which is appointed by the shareholders for such period as the shareholders may determine. A shareholder / director may be appointed as a secretary.
Annual Account and Audits
The JAFZA offshore company shall keep accounting records. Accounts shall be preserved for 10 years from the date on which they are prepared. Accounts must be approved by the directors and signed by one of them and must be available for inspection by the shareholders concerned. Said annual accounts however are not required to be filed before JAFZA but should be made available to the JAFZA Registrar upon demand.
Company Registers and Minutes of Meetings
All offshore companies are required to maintain the following registers:
Registers and minutes shall be open for inspection by any shareholder or director of the offshore company and/or the Registrar. If inspection is refused, the company commits an offence.
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 offshore company.
Incorporation Time Frame
Approximately 15 to 20 business days from the time of filing of all the requirements, provided no further security checks are undertaken.
Restrictions on Name
Names must end with “Limited”.
Activities/Restrictions on Activities
JAFZA offshore companies may engage in any lawful activity for which offshore companies may be organized under the JAFZA Offshore Regulations.
JAFZA offshore companies are prohibited from carrying on business with person(s) resident in the UAE. However, a JAFZA offshore company shall not be treated as carrying on business with person(s) residing in the UAE by reason only that it:
In the event that a JAFZA offshore company desires to carry on business either within the JAFZA or elsewhere in the UAE, a proper license should be obtained from the competent authority.
JAFZA via its circular in 2007 provided for 18 other business activities which cannot be approved viz.,
Insurance, Banking, Financial, Consulting, Intellectual Property, Gambling, Education, etc.
A JAFZA offshore company may be dissolved prior to the annual renewal date. The following documents/ steps are required from the applicant in order to apply for dissolution:
Every JAFZA offshore company is required to appoint an approved registered agent from the list of approved JAFZA Registered Agent List (Motei & Associates is an approved JAFZA Registered Agent).
Reporting Information/ Taxation
JAFZ is not a dependent or ‘overseas’ territory of another country and as such it is not sharing or reporting information to any overseas ‘principal’ or organization. Jebel Ali Free Zone Offshore is not subject to the EU Savings Tax Directive, unlike some other offshore tax havens related to the EU member states.
Required documents for individual applicant(s):
Required documents for corporate applicant(s):
Required documents for director(s) and secretary: