Differences between Offshore and Free zone business setup in UAE
Investors have the liberty to choose from the mainland, free zone and also offshore business setups in UAE. Although, businesses/companies in the mainland jurisdictions may not be incentivized like free zone and offshore.
Similarities between offshore and free zone:
- Complete foreign ownership of an entrepreneur
- Complete repatriation of profits
Differences between offshore and free zone business setup in UAE:
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OFFSHORE |
FREE ZONE |
| 1. VAT and other related taxes |
- VAT and also other taxes are still not applicable to offshore companies.
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- After the recent implementation of value-added tax (VAT) in UAE; Nearly 20 free zones are exempted from the VAT .
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| 2. Office space |
- It is not mandatory for an offshore company to rent an office or office-space in the county
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- Office space is mandatory for companies in any of the free zones
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| 3. Employment visas’ |
- No employment permits/visas granted
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- Employees and also Shareholders of a free zone company can easily get UAE residence visa
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| 4. Privacy and Secrecy |
- Names and identities of owners, directors, and also shareholders of offshore companies are not made public
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- No advantage of secrecy in the free zones
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| 5. Business activity |
- Not permitted to execute any kind of business activity in UAE. However, they can execute business activities outside the UAE
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- Import & export of products and also goods are permitted in UAE. Nonetheless, restrictions are laid on carrying out business in the UAE local market
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| 6. Minimum share capital |
- There is no minimum share capital requirement
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- Minimum share capital should be deposited in the bank
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