Offshore Company Formation – List of Best Countries to Set up
Offshore companies or corporations can be defined as either:
- International Business Companies – IBCs are companies which operate strictly outside of the country where they were incorporated.
- Companies which “offshore” (AKA relocate) some of their business processes overseas (e.g. manufacturing in a foreign jurisdiction)
In the UAE, offshore companies and IBCs can receive certificates of incorporation, however they will not be issued an operating license. Offshore companies can be used to minimize your tax as well as provide a confidential structure to legally protect your assets. Thus, setting up your offshore frim in the UAE is fairly simple. In this blog, we will outline some of the best countries set up your offshore company or IBC!
3- The British Virgin Islands Offshore company
- Population: 31,196
- Area: 153km2
- Location: the Caribbean, 14-16-hour flight from Europe, 6-hour flight from New York, 17-22-hour flight from Asia
- Climate: Tropical, occasional hurricanes and storms from June to November
- Economy: Tourism focus, tax haven, provider of financial services
- Number of Offshore Companies: 350,000+ IBCs
- FDI: USD 2.2 billion (2018), was the 4th largest FDI recipient in 2013, nearing USD 92 billion
- Financial Reserve: –
- GDP: USD 1.27 billion, growth of 0.55% in 2017, GDP per capita
- Credit rating: Standard & Poor’s: BB+, Moody’s: B2
- Legal framework: Common Law
- Free Zones & Offshores: IBCs
The Advantages of BVI Offshores
The BVI’s offshore companies enjoy minimal regulatory interference as well as a high level of corporate flexibility. For example, BVI offshores/IBCs enjoy the ease of conducting mergers and acquisitions as well as cross-border transactions. The BVI is classed as a tax haven which is supported by a politically stable government which has provided attractive offshore opportunities for foreign investors.
The BVI’s Standard Corporate Taxation Rates
The British Virgin Islands are completely tax-free in the following areas:
- Corporate Income
- Capital Gains
- Dividend/Profit tax
- Interest Income
- Gift tax
- Sales (no VAT)
- Inheritance tax
2- Mauritius offshore company
- Population:265 million
- Area: 2,040km2
- Location: the African continent, Indian Ocean, 12-hour from Europe (London Gatwick), 21-hour flight to the United States, 6-hour flight from Asia (Dubai)
- Climate: Tropical, occasional cyclones between January and March
- Economy: Free market economy, focus on tourism, textiles, sugar production, and financial services
- Number of Offshore Companies: 10,000+ IBCs
- FDI: USD 634 million
- Financial Reserve: USD 7.216 billion (2019), Mauritius Pension Fund: USD 4.185 billion
- GDP: USD 29.187 billion (2018), growth of 3.4% YOY (year-over-year, 2019), GDP per capita USD 22,909
- Credit rating: Standard & Poor’s: BB+, Moody’s: Baa1
- Legal framework: Amalgamation of French Civil & Common Laws, the Criminal & Civil proceedings are based on the British legal system
- Free Zones & Offshores: Mauritius Freeport – this is a free trade zone, established in 1992 and is a customs-free zone used for re-exporting. The Freeport is similar to Dubai’s JAFZA (where we offer both free zone and offshore incorporations).
The Advantages of Mauritian Offshores
The benefits of the Mauritian economy are as follows:
- Attractive fiscal policies
- Double Taxation Avoidance Agreements/Treaties (DTAAs)
- No exchange controls (governmental restrictions on the movement of currency between countries)
- An efficient banking system
- A stock exchange platform that is open to foreign investors
- New Open Air Access Policies
- An efficient telecommunications system (connected to a SAFE fiber optic network)
- Skilled workforce
- Residence/occupation permits granted within 3 days
- Foreigners are able to acquire properties in Mauritius
Mauritian Standard Corporate Taxation Rates
- Corporate income: 15%
- Capital gains: 0%
- Dividends: 3/15%
- Interest income: 3/15%
1- The United Arab Emirates offshore company
- Population:77 million
200+ Nationalities, 20% Emiratis, skilled labor force of with 31% of all employees in the extractive sector; 13% in public administration and defense; 9% in wholesale, retail trade, and repair; 8% in construction and building; 7% in transformative industries. UAE employers are employing new methods of developing the skills of their future workforce.
- Area: 83,600km2
- Location: Asia, strategic access to global trade routes with 2.2 billion consumers. Convenient time zone for dealing with both western and eastern time zones. 6-8-hour flights to both Europe as well as the Far East.
- Climate: Desert, Gulf, less prone to natural disasters
- Economy: The UAE is referred to as a real economy, it is the 2nd largest economy after Saudi Arabia in the Middle Eastern region.
The UAE hosts world-class luxury accommodations, tourist attractions, banking, commerce, and real estate. It is renowned for its competitive business policies leading to the “Ease of Doing Business” ranking (11th globally). The UAE has scored 70/100 in the Corruption Perceptions Index. Economy Freedom has ranked the UAE 37th in the world in 2019. The UAE has been whitelisted by the European Union after meeting all of its economic substance requirements.
- FDI: USD 10 billion, 6th in the world (2019), nearly 40% of worldwide FDI is driven into the UAE due to its tax efficiency.
- Financial Reserve: USD 1.01 billion (2019), Sovereign Wealth Fund – Abu Dhabi Investment Authority: USD 792 billion
- GDP: $348 billion, 31st highest in the world, growth 2.4% 2019, GDP per capita USD 43,792
- Credit rating: Standard & Poor’s: AA, Moody’s: Aa2, Fitch: AA
- Legal framework: Common Law, investment laws, regulations, and incentives are used to continue improving and encouraging FDI.
- Free Zones & Offshores: Over 45 specialized free zones, offshore structures, and IBCs which all offer 100% foreign ownership and 100% repatriation of profits.
The Advantages of UAE Offshores and IBCs
- 0% Taxation
- Very low import duties
- High returns on investment (ROI) – the UAE ranks 11th as the most promising investor economy (UNCTAD World Investment Report 2014)
- Double Taxation Agreements
- Trade relations with the ACFTA (Africa), Egypt, Vietnam, Brazil, and China.
- Flexible regulations
- Mature & accessible banking system (50+ national & international banks)
- A stable currency (AED)
- Strong, competitive, & driven economy – high government expenditure on infrastructure ahead of the Expo 2020 across all of the emirates
- Ability to acquire real estate properties in UAE freehold areas
- World-class infrastructure
- Strategic location
- 11th best in terms of doing business, 2nd best in the World Government Trust index, 2nd best globally, & 1st regionally in terms of Double Taxation Agreement Treaties
UAE Standard Corporate Taxation Rates
While the UAE maintains international economic substance requirements and is whitelisted from being a tax haven, its offshore are tax-free in the following areas:
- Corporate income
- Capital gains
- Interest income
Why Redomicile into the UAE?
Re-domiciliation is a process where a company transfers its registration from one jurisdiction/country to another jurisdiction while maintaining the same legal identity & intellectual property. Companies re-domicile or opt for a Transfer of Domicile for a variety of reasons, with the key factor being tax neutrality or Double Taxation Agreements. This is done to align the jurisdiction of registration with the shareholder base or to access specialist capital markets.
We can assist in redomiciling your
Who are Dubai Business Advisors?
- 17 years of excellent service quality and commitment to our clients, over 100+ years of accumulated team experience
- Well established strategy of corporate services
- Reliable and comprehensive business solutions specifically designed to satisfy your needs
- Part of the world’s largest platform for professional business services and networks – ADAM Global
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