Establishing an offshore business in Dubai might be an advantageous affair. A foreign business owner who decides on setting up their enterprise in another country might consider it an easy step. But while establishing the company might be seamless, a few significant mistakes may cost you money and time. On that note, here are the common mistakes a business opting for offshore company registration must avoid.
Inappropriate Banking Preparations
The most common mistake is that clients try to replicate the brick-and-mortar banks with traditional services. However, a lot of entrepreneurs don’t know the advantages of e-wallets offering greater flexibility. So, it’s imperative to understand the key differences between banks and digital wallets.
Banks have local customers and offer telephonic services and face-to-face interaction. On the other hand, e-wallets have garnered popularity in the last two decades. They specialise in the speedy transfer of funds with excellent exchange rates.
Neglecting the Concept of Tax Rules
Tax law is undergoing a constant change. Thus, it’s extremely essential to ensure you understand things that apply in the chosen jurisdiction. Also, learn how it impacts the personal tax position. If you want to proceed with the offshore company registration process in Dubai, Dubai is 100% tax-free. The offshore companies don’t need to pay corporate and personal income tax. Most offshore companies are exempt from paying:
- VAT or value-added tax
- Withdrawing taxes
- Import and export taxes
- Taxes on capital gains
Select an Unsuitable Jurisdiction
On-going cost is an important consideration when it comes to forming an offshore business. So, before selecting the jurisdiction, it’s imperative to consider this parameter. Also, learn what your business requires out of accounting & audit obligations (in case any).
Besides the formation cost, you need to have an insight into the annual costs. The costs include a registered agent, company secretary, and registered office. These happen to be obligatory. Undermining the importance of considering accounting and audit obligations is a big mistake.
You must consider these obligations and where they are applicable. You also need to take into account the optional costs (like a virtual office). Different obligations are there depending on where you plan to sell. But if you want to open your offshore company in Dubai, below are the things you must learn.
Facts to Learn before Setting up An Offshore Company in UAE
An offshore company in Dubai doesn’t get a business license, unlike any other operating jurisdictions like Free Zone or Mainland Companies. The offshore company gets the certificate of incorporation. Offshore companies can neither import goods into UAE nor lease offices/commercial premises, nor secure work Visas for staff or residents.
- These companies require having articles of association as the constitutional documents
- Three offshore jurisdictions are there in the UAE
- Offshore companies follow the KYC process
- Entrepreneurs need to have bank accounts to create the offshore company registration in Dubai
Lastly, UAE Offshore companies provide a prolific and productive environment for investors because you get the exemption from paying taxes (like income, corporate, inheritance, sales, personal tax, etc.). So, while setting up the offshore business in Dubai, please refrain from the aforesaid mistakes. Get knowledgeable about the essentials by consulting Emirazbiz today.