We have already talked in this blog about the advantages and disadvantages of offshore companies. Also about the four tax systems in the world, and how to transfer your residence. Something necessary in case you want to make the most of your offshore company today. We are going to talk of a specific offshore jurisdiction and how to set up an offshore company in uae.
The classic offshore jurisdictions, such as Saint Vincent or the Marshall Islands. Very useful in many cases but have some disadvantages.
In many cases, they are inappropriate for businesses where clients need invoices to present to the Treasury. This means that the customer will not be able to deduct tax from that invoice, which is a competitive disadvantage.
The way around this reputation problem is simple but it brings new challenges.
Suppose you found your company within the EU.
Another option is to incorporate the company in the United States.
Unfortunately, there is no such golden goose in international tax structures. There will always be certain concessions, at least in price.
you ever heard of Ras al-Khaimah?
Ras al-Khaimah (or, in its acronym, RAK) is one of the seven emirates of the United Arab Emirates. They are hereditary absolutist monarchies ruled by the so-called emirs, hence the country’s name.
Since 1700, Ras al-Khaimah has been ruled by the Qasimi family, which also controls the neighboring emirate of Sharjah.
When we think of offshore, we rarely think of the United Arab Emirates, and this is also because it is quite difficult to set up companies and open accounts in the region. For a long time, almost nothing could be done without being there and gaining the trust of the locals.
But in the meantime, international free zone authority dubai have sprung up designed to attract foreign companies. These free zones offer excellent possibilities for entrepreneurs and those who sell products.
To maintain residence in the United Arab Emirates, you will only have to visit the country once every 183 days.
UAE free zone companies are highly recommended vehicles for international tax structuring and will soon receive the attention they deserve.
On the reputation of the UAE
Luckily you can also take advantage of the many advantages of the UAE by paying much less money since the good reputation of the free trade zone affects other options in the United Arab Emirates.
The UAE is one of the 23 countries with no direct taxes.
The difference is that it is not a State like the Bahamas, Cayman Islands or Bermuda, where we only find shell companies (without real business activity), but an economically strong country with a lot of industry.
The Emirates is home to several of the world’s busiest ports, as well as multinational exporters in all kinds of sectors.
This makes the UAE’s reputation very different from the Caribbean islands. Even though not all free trade zones meet the same international standards, it is tolerated. After all, the United Arab Emirates is an important partner for the United States, Europe and China in the fight against Islamic terrorism.
La RAK International Company
Precisely regarding discretion, companies from Ras al-Khaimah have many advantages over other offshore jurisdictions. Foreign tax authorities try in vain to find the beneficial owners of these offshore companies. Although Emirates signed the agreement on the automatic exchange of information, it has practically no effect in practice.
Another advantage is that, generally, the invoices do not show IC but Limited.
This is also because there is often no desire or chance to find out who is behind a company in Ras al-Khaimah since the company address that appears on the invoice is rarely a Ras al-Khaimah address.
Instead, incorporation agencies are usually based in Dubai or Abu Dhabi, where no offshore legislation exists.
In practice, offshore companies in Ras al-Khaimah can simulate a legitimate FTZ company, such as those in Dubai, by having their business address there.
Furthermore, there is even the unique possibility of using a jurisdiction other than Ras al-Khaimah for some operational business aspects, e.g., local company law.
This way, you can attract investors who do not trust RAK with different legislation or legally simulate a registered office in another country.
Despite everything, keep in mind the recognition of the offshore company in Ras al-Khaimah.
Bank accounts and Paypal for companies in Ras al-Khaimah
One of the many reasons for choosing a company in Ras al-Khaimah is the chance to break into the very stable banking system in the region.
So, the country and its banking system are very stable. Its currency, the United Arab Emirates dirham, is directly linked to the US dollar, trading from 1 to 3.6725. Coupled with the high level of confidentiality, the IBAN standard and modern banking, opening an account in the Emirates can be very interesting.
Unfortunately, it is essential to be present at the time of opening, and it is also essential to have lasting personal contact with the bank’s interlocutors.
Those who do not wish to carry out their banking operations in the UAE will have more difficulty opening an account outside the country. This is because the Emirates is not a party to the UN Convention on apostilles to legalize documents. Therefore, certifying company documents can be long and expensive since an embassy must legalize them.
Whoever needs Paypal for their company will have hit the spot with the company in Ras al-Khaimah. Paypal gives problems in many offshore countries, but not in this case. In other jurisdictions, collecting payments through Paypal without paying high commissions is difficult. This almost always requires a US account if you can’t provide a local account.
Suppose you have incorporated your company in Hong Kong, but you have not obtained a bank account there. In that case, you should consider moving your company to Ras al-Khaimah, which has similar prices but is a location with many more advantages.
After all, this way, you can transfer your Paypal balance to any prepaid, debit or credit card you have.
Incorporation of a company in the Ras al-Khaimah Arab Emirate State (RAK)
The body responsible for setting up a RAK offshore company is RAKIA, the RAK Investment Authority. The requirements to incorporate a company in Ras al-Khaimah are relatively strict.
Constitution expenses in Ras al-Khaimah with Tax-Free Today
Tax-Free Today offers to set up a RAK offshore company for €2,640. Annual administration fees amount to €2,020.
The intermediation service to obtain a business account has an additional price because it is more expensive for the reasons mentioned. For an additional €565, we put you in contact with the following UAE banks.
Mashreq Bank (€6,250 minimum deposit)
Noor Bank (€2,500 minimum deposit)
Emirates NBD (€50,000 minimum deposit)
RAK Bank (€25,000 minimum deposit)
These banks offer modern online banking in euros, pounds, US dollars and dirhams. However, you will generally only be able to get your debit card if you are domiciled in the Emirates. In any case, to open your account, you will need to be physically present.
It is also possible to obtain international business accounts.
The option to make the RAK offshore company formation look like a free trade zone company with residence in the United Arab Emirates is a great advantage that allows you to benefit from Dubai’s reputation, which is even better. Well, setting up a company there is considerably more expensive.
As you can see, the small but distinguished Emirate of Ras al-Khaimah offers all the advantages of the classic offshore companies, as well as good invoice recognition, very good bank accounts and the full functionality of Paypal.