Off-shore Companies should be established in one of the offshore business centres in the UAE.
Jebel Ali Free Zone was the first body offering such legal entities, but these are now offered by RAK Free Trade Zone (RAK ICC). An off-shore company does not need a minimum capital for incorporation and it is optional to appoint a managing director. However, the company must be founded through an agent. (Each off-shore centre has a list of certified agents). An off-shore company is deemed to exist in an off-shore jurisdiction; neither the shareholders nor the directors (if any) can obtain a residence permit under an off-shore company.
An off-shore company is restricted from carrying out business in the UAE, whether inland or in a Free Zone area; it can only carry out its activities abroad. It, however, can open a bank account in the UAE in order to carry out business transactions. Commonly, an off-shore company is the best vehicle for foreign investors to buy real estate within the freehold areas, under the name of the company. The reason for this is that on occasion, the developer stipulates that the buyer should be a UAE legal entity. This condition is sometimes imposed on the developer by the planning Authority which determined the freehold area. Apart from the reason mentioned above, there are considerable advantages for a foreign investor to have his/her real estate under an off-shore company’s name. Firstly, to avoid the compulsory application of Islamic Sharia Law on inheritance issues and secondly, the reselling of real estate can be simply made by transferring the shares of the off-shore company to the buyer.