An offshore company can be set up in Dubai within Jebel Ali Free Zone (Jafza) under Jafza Offshore Companies Regulations, 2003.
An offshore company must be registered through approved Registered Agent. The office address of the Registered Agent is the registered office of the Company.
Minimum number of shareholder required- one (1). Minimum number of Directors-2 (two). Secretary required-1(one). Director can also be a Secretary. Directors or Secretary must be natural persons. No minimum capital is prescribed.
All shares must be fully paid when allotted. A company may not create different classes of shares. Bearer shares cannot be issued. Presently, joint shareholding is not allowed.
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.
In case of individual shareholders, following documents are required
- Detailed CV
- Original bank reference
- Clear passport copy
- Utility bill
In case of corporate shareholder, following documents, notarized and legalized by UAE Embassy, are required
- Memorandum & Articles of Association or Foundation document
- Certificate of incorporation
- Board resolution/power of attorney
- Certificate of good standing
- Original bank reference
- Utility bill for directors
Jafza incorporation fees is AED 10,000. Annual Jafza renewal fees, due on anniversary of incorporation each year, is AED 2,500 (US$1=AED 3.673).
The Registrar may refuse to register an offshore company for such reason, as he believes to be proper grounds for refusing such registration. Where the Registrar refuses to grant his consent for the registration of an offshore company he shall not be bound to provide any reason for its refusal and his decision shall not be subject to appeal or review in any court. Where the Registrar grants his consent to the registration of an offshore company he shall register the offshore company's articles delivered to him.
No offshore company, which is incorporated under these Regulations, shall:
- Carry on business with persons resident in the United Arab Emirates;
- Own an interest in real property situate in the United Arab Emirates;
- Carry on banking business;
- Carry on business as an insurance or re-insurance company, insurance agent or insurance broker; or
- Carry on any other business which may, by regulations made by the Authority, be prohibited by the Authority
An offshore company shall not be treated as carrying on business with persons resident in the United Arab Emirates by reason only that:
- It makes or maintains professional contact with legal consultants, accountants, management companies or other similar persons carrying on business within the United Arab Emirates;
- It prepares and maintains books and records within the United Arab Emirates;
- It holds within the United Arab Emirates meetings of its directors or members;
- It owns real property on the Palm Islands or Jumeirah Islands or any properties owned by Nakheel Company LLC or any other real property approved by the Authority; or
- It holds an account in a bank in the United Arab Emirates for the purpose of conducting its routine operational transactions.
If an offshore company wishes to conduct trade or other business in the Zone or elsewhere in the United Arab Emirates, it must obtain the appropriate licence to conduct the trade or other business activity from the competent authorities (such as by forming FZE/FZC or limited liability company in which the offshore company can be a shareholder).
A director of an offshore company who has, directly or indirectly, an interest in a transaction entered into or proposed to be entered into by the offshore company or by a subsidiary of the offshore company which to a material extent conflicts or may conflict with the interests of the offshore company and of which he is aware, shall disclose to the offshore company the nature and extent of his interest. This could be done for each transaction or by way of general notice of disclosure of interest
It shall not be lawful for an offshore company to make a loan to any director or to enter into any guarantee or provide any security in connection with a loan made to a director without the consent of members holding not less than 90 per cent in nominal value of the shares giving a right to attend and vote at any meeting of members.
A loan shall be deemed to be a loan to a director if it is made to:
- The spouse or children of a director; or
- To a company of which a director, his spouse or children own or control directly or indirectly more than 20 per cent of the share capital.
Every offshore company shall in each year hold a general meeting in addition to any other meetings in that year but so long as an offshore company holds its first general meeting within 18 months of its incorporation, it need not hold it in the year of its incorporation or in the following year.
Not more than 18 months shall elapse between the date of one general meeting and the date of the next.
Any meeting of the offshore company (other than an adjourned meeting) may be called by 14 days' notice in writing.
If a meeting is called by shorter notice, it is deemed to have been duly called if it so agreed by a majority in number of the members having a right to attend and vote at the meeting, being a majority together holding not less than 95 per cent in nominal value of the shares giving a right to attend and vote at the meeting.
Insofar as articles of the offshore company do not make other provision in that behalf, the following provisions apply to any meeting of the offshore company:
- Notice of any such meeting shall be given to every member entitled to receive it by delivering or posting it to his registered address;
- Members holding not less than ten per cent in nominal value of the shares carrying a right to vote thereat may call any such meeting;
- At any meeting of the offshore company two members personally present shall be a quorum;
- At any meeting, other than an adjourned meeting, the quorum shall be persons holding or representing by proxy at least one-third in nominal value of the issued shares and at any such adjourned meeting, one person holding shares or his proxy shall be a quorum;
- Any member elected by the members present at any such meeting may be chairman; and
- On a show of hands, every member present in person at any such meeting has one vote and on a poll, every member has one vote for every share held by him.
Anything that may be done by a Resolution (but excluding a Resolution removing an auditor) passed at a meeting of an offshore company may, subject to the articles, be done by a Resolution in writing signed by or on behalf of each member who, at the date when the Resolution is deemed to be passed, would be entitled to vote on the Resolution if it were proposed at a meeting.
A Resolution in writing may consist of several instruments in the same form each signed by or on behalf of one or more members, and shall be deemed to be passed when the instrument, or the last of several instruments, is last signed or on such later date as is specified in the Resolution.
Every company shall cause minutes of all proceedings at general meetings, meetings of its directors and of committees of directors to be entered in books kept for that purpose, and the names of the directors present at each such meeting shall be recorded in the minutes.
Any such minute, if purporting to be signed by the chairman of the meeting at which the proceedings took place, or by the chairman of the next succeeding meeting, is evidence of the proceedings.
Every company shall keep accounting records, which are sufficient to show and explain its transactions, and are such as to -
- Disclose with reasonable accuracy, at any time, the financial position of the offshore company at that time; and
- Enable the directors to ensure that any accounts prepared by the offshore company under this Part comply with the requirements of these Regulations.
Failure to maintain accounts is an offence.
An offshore company's accounting records shall be kept at such place as the directors think fit and shall at all times be open to inspection by the offshore company's directors and the secretary.
Accounting records shall be preserved by it for 10 years from the date on which they are made.
The directors of every company shall prepare accounts for a period of not more than 18 months beginning on the date the offshore company was incorporated or, if the offshore company has previously prepared a profit and loss account, beginning at the end of the period covered by the most recent account.
The accounts shall be prepared in accordance with generally accepted accounting principles approved by the Registrar and show a true and fair view of the profit or loss of the offshore company for the period and of the state of the offshore company's affairs at the end of the period and comply with any other requirements of these Regulations.
An offshore company's accounts shall be approved by the directors and signed on their behalf by one of them.
Within 6 months after the end of the financial period, the accounts for that period shall be -
- Prepared and examined and reported upon by auditors; and
- Laid before a general meeting together with a copy of the auditors' report.
Any member of an offshore company who has not previously been furnished with a copy of the offshore company's latest accounts is entitled, on written request made by him to the offshore company and without charge, to be furnished with a copy of those accounts together, where the accounts have been audited, with a copy of the auditors' report.
If default is made in complying with such a request within seven days after its making, the offshore company and every officer of it who is in default commits an offence.
An offshore company shall appoint auditors who shall examine and report in accordance with these Regulations upon the accounts prepared by the offshore company.
An offshore company shall at each general meeting appoint auditors to hold office from the conclusion of that meeting to the conclusion of the next general meeting.
The directors or (failing the directors) the offshore company in general meeting may, at any time before the first general meeting, appoint auditors who shall hold office to the conclusion of that meeting.
The directors or the offshore company in general meeting may fill any casual vacancy in the office of auditors and fix their remuneration.
An offshore company's auditors shall make a report to the offshore company's members on the accounts examined by them. The auditors' report shall state whether in their opinion the accounts have been properly prepared in accordance with these Regulations and in particular whether a true and fair view is given.