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Company and Jurisdictions


JAFZ Offshore Company

Legislation: Standard capital:
Jebel Ali Free Zone (JAFZ) Offshore Companies Regulations 2003. As there are no higher costs payable for larger share capitals we would generally recommend an authorised capital of AED 1 million.
Annual government fees: Corporate Taxation:
USD 545 Zero
Time to incorporate: Ready-made companies:
One to two weeks. No.
Minimum members: Registered office required:
One, individual or corporate. Yes, must be maintained in Dubai at the address of a licensed management company or law firm.
Local registered agent: Minimum number directors:
Yes. Two, individuals only. A register of directors must be filed with the authorities but is not open to public inspection. A secretary, who must be an individual, is necessary.
Officer to be locally resident: AGM required:
No. Yes.
Annual return required: Financial statements to be prepared and/or audited:
Every company must keep accounting records and these must be preserved for 10 years from the date on which they are prepared. Accounts must be approved by the directors and signed by one of them. Every company must appoint an Auditor (from the approved list), who shall examine and report on the accounts in accordance with the regulations.
Balance sheets to be filed: Share register required:
No. Yes, at registered office
To be filed with Registrar: Open to public inspection:
No. No, open only to other members .
Exchange controls: Redomiciliation permitted:
No. Yes, in and out.
Language of incorporation: Confidentiality:
English. There are no specific statutory provisions governing confidentiality in Dubai.
Bearer shares permitted:  




  • Not affected by EU savings directive.
  • Not a member of the OECD or targeted by OECD as tax haven so no exchange of information.
  • 100% foreign ownership is allowed.
  • Company can own real estate properties on Palm islands, or any properties owned by Nakheel Company LLC or any other real estate approved by the JAFZ Authority.
  • Company can hold an account in a bank in the UAE for the purpose of conducting routine operational transactions.
  • One residence visa will be issued for one director if the Offshore Company maintains an office in the JAFZ.
  • The Company will not be allowed to carry on business with people who are resident in the UAE or carry out any trade in the JAFZ or in the UAE, unless they have first obtained an appropriate license from the relevant competent authority.
  • The registrar has the power to appoint competent inspectors to investigate the affairs of the offshore Company. Upon discretion of the registrar, inspection costs may be charged to any office bearer of the Company.
  • Not an English common law jurisdiction.

International Agreements

OECD Harmful Tax Practices

Non-OECD participating partners have criticised the OECD for not doing enough to involve significant offshore centres, such as Dubai, in the process of achieving transparency and information exchange. Dubai was not one of the 35 jurisdictions identified by the OECD in June 2000 as meeting the technical criteria for being a tax haven. However, at its global forum on harmful tax competition on 4 June 2004 in Berlin, the OECD listed Dubai as one of 11 additional financial centres that it intends to target as part of its drive to achieve a level playing field.

Tax Information Exchange Agreement (TIEA)


EU Savings Tax Directive

Not applicable

Financial Action Task Force (FATF)

At the time of the FATF mutual evaluation (which took place in February 2001), the UAE had developed and significantly implemented the framework for its anti-money laundering system, although certain of its aspects needed be clarified and strengthened.

The UAE was very active in supporting the creation of the Middle East and North Africa Financial Action Task Force (MENAFATF) that was inaugurated in Bahrain in November 2004; the UAE was one of the original charter signatories. MENAFATF is a FATF-style regional body.

Mutual Legal Assistance Treaties (MLATs)

The UAE has entered into a series of bilateral agreements on mutual legal assistance. Additionally, the Anti-Money Laundering and Suspicious Case Unit (AMLSCU) has provided international organisations and its counterpart FIUs information on cases related to terrorist financing and anti-money laundering.

Tax Treaties

Dubai is a 'no tax' emirate. Accordingly double taxation treaties are aimed at making Dubai a more attractive territory in which to operate by reducing taxation levied in the foreign jurisdiction on profits remitted abroad by foreign corporations operating in Dubai. There are double taxation agreements with:

  • Algeria
  • China
  • Egypt
  • Finland
  • France
  • Germany
  • India
  • Indonesia
  • Italy
  • Jordan
  • Kuwait
  • Malaysia
  • Malta
  • Pakistan
  • Poland
  • Romania
  • Singapore
  • South Korea
  • Sudan
  • Syria
  • Turkey
  • Yemen

Under these treaties profits derived from shares, dividends, interest, royalties and fees are taxable only in the contracting state where the income is earned.

Although corporate income tax is not levied in the UAE the provisions of the treaties do not state that such income must be taxed to qualify for benefits. Thus dividend income paid by a UAE company to a company that has a double taxation treaty with UAE may not be taxable in the hands of the foreign parent corporation even though it has not been taxed in the UAE.

But many countries have anti-avoidance provisions which either set minimum levels of tax for income to benefit from tax treaties, or set out lists of low-tax countries that do not qualify under tax treaties. It is therefore necessary to study the tax legislation of each treaty partner as well as the text of the treaties themselves before assuming anything about the tax treatment of untaxed income flows originating in Dubai.

General Info

Full Country Name:

United Arab Emirates (UAE)


83 600 sq km


3.48 million (2002 est.)

Capital City:

Abu Dhabi




Arab (55%), South Asian (28%), Iranian (8%), other expatriates (9%)


Arabic (official), Persian, English, Hindi, Urdu


Emirati dirham (AED) – AED3.673 (2004) per USD


Federation with specified powers delegated to the UAE federal government and other powers reserved to member emirates

Legal system:

Federal court system introduced in 1971; applies to all emirates except Dubai and Ra's al Khaymah, which are not fully integrated into the federal system; all emirates have secular courts to adjudicate criminal, civil, and commercial matters and Islamic courts to review family and religious disputes

Head of State:

Sheikh Khalifa Bin Zayed al-Nahyan


The UAE is a federation of seven autonomous Sheikhdoms with a total land area of 83,600 square kilometres. The seven emirates are Abu Dhabi, Dubai, Sharjah, Ras Al Khaimah, Fujairah, Umm al Qaiwan and Ajman. The total population is 3.48 million (85% of which is expatriate). The climate is dry sub tropical with hot summers (May to October) and high humidity near the coast .


The earliest significant settlements in the area, which now makes up the UAE date from the Bronze Age. During the Middle Ages they formed part of the Kingdom of Hormuz. European influence began with the Portuguese in the 16th century followed by the British in the 18th century. In 1892 the British signed a number of agreements with the ruling sheikhs in the region, which led to the formation of the “Trucial States”.

In 1968, the UK announced its decision, reaffirmed in March 1971, to end the treaty relationships with the seven Trucial Sheikhdoms, which had been, together with Bahrain and Qatar, under British protection. The nine attempted to form a union of Arab emirates, but by mid-1971 they were unable to agree on terms of union, even though the termination date of the British treaty relationship was the end of 1971. Bahrain became independent in August and Qatar in September 1971. When the British-Trucial Sheikhdoms treaty expired on 1 December 1971, they became fully independent. On 2 December 1971, six of them entered into a union called the United Arab Emirates. The seventh, Ras al-Khaimah, joined in early 1972.

In 2004, the UAE’s first and only president, Sheikh Zayed bin Sultan Al Nahyan, died. His eldest son Khalifa bin Zayed al Nahyan succeeded him as Ruler of Abu Dhabi. In accordance with the Constitution, the UAE’s Supreme Council of Rulers elected Khalifa bin Zayed Al Nahyan as UAE Federal President. Mohammed bin Zayed al Nahyan succeeded Khalifa as Crown Prince of Abu Dhabi.

Government and Politics

Executive branch
Head of State: President Sheikh Khalifa bin Zayid Al Nuhayyan (since 3 November 2004), ruler of Abu Dhabi (since 4 November 2004) and Vice President Maktum bin Rashid al-Maktum (since 8 October 1990), ruler of Dubai.
Head of Government: Prime Minister Maktum bin Rashid al-Maktum (since 8 October 1990), ruler of Dubai; Deputy Prime Minister Sultan bin Zayid Al Nuhayyan (since 20 November 1990); Deputy Prime Minister Hamdam bin Zayid Al Nuhayyan (since 20 October 2003)
Cabinet: Council of Ministers appointed by the president. Note: there is also a Federal Supreme Council (FSC) composed of the seven emirate rulers; the FSC is the highest constitutional authority in the UAE; establishes general policies and sanctions federal legislation; meets four times a year; Abu Dhabi and Dubai rulers have effective veto power
Elections: President and vice president elected by the FSC (composed of rulers of the seven emirates) for five-year terms; election last held 3 November 2004 upon the death of the UAE's Founding Father and first President Zayid bin Sultan Al Nuhayyan (next to be held 2009); prime minister and deputy prime minister appointed by the president
Election results: Khalifa bin Sultan Al Nuhayyan elected president by a unanimous vote of the FSC; Maktum bin Rashid al-Maktum unanimously reaffirmed vice president
Legislative branch

Unicameral Federal National Council (FNC) or Majlis al-Ittihad al-Watani (40 seats; members appointed by the rulers of the constituent states to serve two-year terms)

Elections: none
Note: reviews legislation, but cannot change or veto

Election results: House of Representatives - percent of vote by party - AKEL 34.71%, DISY 34%, DIKO 14.84%, KISOS 6.51%, others 9.94%; seats by party - AKEL (Communist) 20, DISY 19, DIKO 9, KISOS 4, others 4.

Judicial branch

Union Supreme Court (judges are appointed by the president)

Political parties and leaders


The relative political and financial influence of each emirate is reflected in the allocation of positions in the federal government. The ruler of Abu Dhabi, whose emirate is the UAE's major oil producer, is president of the UAE. The ruler of Dubai, which is the UAE's commercial centre and a significant oil producer, is vice president and prime minister.


Basic economic facts

GDP (2004 est.): USD 63.67 bn

Growth rate (2004 est.):5.7%

Per capita GDP (2004 est.):USD 25,200

Main Industries:Oil, gas, Petrochemicals, manufacturing and construction

The UAE has one of the highest GNP's per head in the world and is an important financial centre for the Gulf region. The UAE is still a largely cash-based society. However, the financial sector is modern and progressive. Dubai, in particular, is a major international banking centre. There is also a growing offshore sector. The UAE’s robust economic development, political stability, and liberal business environment have attracted a massive influx of people and capital.

While still heavily dependent on revenues from hydrocarbons the UAE is relatively well insulated from periods of low oil prices due to successful moves towards economic diversification, large foreign exchange reserves and overseas investments.

Abu Dhabi has approximately 10% of the world's proven oil reserves and 5% of the gas. The Emirate also has an impressive investment portfolio financed from oil income. Dubai is different. It has been forced to diversify to compensate for far more limited hydrocarbon reserves. The economy is based on Dubai's reputation as an entrepot for the region, its vibrant tourist industry and thriving free trade zone. More recent ventures such as the "Dubai Internet City" and "Media City" will diversify the Emirate's economy still further

More than 200 factories operate at the Jebel Ali complex in Dubai, which includes a deep-water port and a free trade zone for manufacturing and distribution in which all goods for re-export or transhipment enjoy a 100% duty exemption. Except in the free trade zone, the UAE requires at least 51% local citizen ownership in all businesses operating in the country as part of its attempt to place Emiratis into leadership positions. The FTZ permits 100 percent foreign ownership, no import duties, full repatriation of capital and profits, no taxation, and easily obtainable licences. Companies located in the free trade zone are treated as being offshore or outside the UAE for legal purposes. However, UAE law prohibits the establishments of shell companies and trusts, and does not permit non-residents to open bank accounts in the UAE.

In March 2004, the UAEG passed Federal Law No. 8 Regarding the Financial Free Zones (Law No. 8/2004). The new law exempts FFZs and their activities from UAE federal civil and commercial laws, but subjects them and their operations to federal criminal laws including the Anti-Money Laundering Law No. 4/2002 and the Anti-Terror Law No. 1/2004. The new law and a subsequent federal decree also allowed for the establishment, in September 2004, of the UAE’s first financial free zone (FFZ), known as the Dubai International Financial Centre (DIFC). Sheikh Mohammed bin Rashid Al-Maktum, Crown Prince of Dubai and UAE Defence Minister, is the President of the DIFC, which is currently the only FFZ operating in the UAE.

With regard to banking activities in the FFZs, Law No. 8/2004 limits licences to branches of companies, joint companies, and wholly owned subsidiaries, provided that they "enjoy a strong financial position and systems and controls, and are managed by persons with expertise and knowledge of such activity." The law prohibits companies licensed in the free zone from dealing in UAE currency (dirham) or taking "deposits from the state’s markets." It further stipulates that the licensing standards of companies "shall not be less than those applicable in the state." The Law empowers the Emirates Stocks and Commodities Authority to approve the listing of any company listed on any UAE stock market in the free zone and the licensing of any UAE licensed broker. The law limits any insurance activity in the UAE carried out by a free zone company, to reinsurance. It further gives competent authorities in the Federal Government the power to inspect financial free zones and submit their findings to the UAE cabinet.

DIFC regulations provide for an independent regulatory body, the Dubai Financial Services Authority (DFSA), which reports to the office of Dubai Crown Prince and an independent Commercial Court. Observers called the independence of the DFSA into question in the summer of 2004, even prior to the inauguration of the DIFC, with the high profile firing of the chief regulator and the head of the regulatory council (the supervisory authority). Subsequently, Dubai passed laws which appear to give the DFSA more regulatory independence from the DIFC. The DFSA, whose regulatory regime is generally modelled after the UK system, is the only authority responsible for licensing firms providing financial services in the DIFC. There are currently two banks and three other financial firms operating in the DIFC. The DFSA’s rules prohibit offshore casinos or Internet gaming sites’ operating in the UAE.

Law No. 4 of 2002 criminalises all forms of money laundering activities. The law calls for stringent reporting requirements for wire transfers exceeding US$545 and currency importation/exportation limits set roughly at US$11,700. The law imposes stiff criminal penalties (up to seven years in prison and a fine of up to 300,000 dirham (US$81,700), as well as seizure of assets if found guilty) for money laundering. It also provides safe harbour provisions for those who report such crimes. Banks and other financial institutions (exchange houses, investment companies, and brokerage houses) are supervised by the Central Bank (CB) and are required to follow strict "know your customer" guidelines; all financial transactions over US$54,000, regardless of their nature, must be reported to the CB. Financial institutions also are required to maintain records on transactions for five years.

Law 4/2002 also provided for the establishment of the Anti-Money Laundering and Suspicious Case Unit (AMLSCU), which acts as the Financial Intelligence Unit (FIU) and is housed within the CB. Financial institutions under the supervision of the CB are required to report suspicious transactions to the AMLSCU, which is charged with examining them and coordinating the release of information with law enforcement and judicial authorities. It has the authority to request information from foreign regulatory authorities in carrying out its preliminary investigation of suspicious transaction reports. The AMLSCU—a member of the Egmont Group since June 2002—exchanges information with foreign FIUs on a reciprocal basis, and has provided information relating to investigations carried out by the US and other countries.

The UAE joined the United Nations and the Arab League and has established diplomatic relations with more than 60 countries, including the US, Japan, Russia, the People's Republic of China, and most western European countries. The UAE is a member of the following international organizations: UN, World Bank, IMF, Arab League, Organization of the Islamic Conference, Organization of Petroleum Exporting Countries, Organization of Arab Petroleum Exporting Countries, and the Non-Aligned Movement.

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