In this post FATCA world, setting up an International Business Company (IBC) has changed significantly. It’s now become much more difficult to open a bank account for your new company, and if your business needs to drop-ship products, there are even more hurdles to jump. The fact of the matter is, in most of the jurisdictions that were once very friendly to global commerce business, the ease of setting-up and getting operational is not as easy as it once was, that is; except the UAE. Our sources inform us that it’s actually gotten easier and less expensive to incorporate, license and launch a company in the UAE than it ever was. Also, this geographically superior location provides many cost savings and benefits over tax havens elsewhere.
Advantages of United Arab Emirates (UAE)
Geographically it is situated in the middle of Europe, Asia, the Middle East and Africa. This means it is never more than a few hours in front or behind your time zone.
It is a world renowned international financial centre with a great reputation and does not appear on any black list, therefore making work with the financial industry much easier.
Regulations and controls are in place to ensure that whilst attracting international businesses and making a name in international financial services they have reputable standards.
Dubai is a modern, vibrant city with great infrastructure including massive international airports, seaports, rail system and high speed internet connections. It also has very strict privacy laws. Government paper work that is required, is simple and straight forward and, in most cases swift. If visas are required for company shareholders/employees, the process is relatively simple.
It has a booming property market. It also boasts a wide variety of options for renting office space. It is a true cosmopolitan jurisdiction with many nationalities making up the local population and English is widely spoken.
And 0 percent tax, no corporate tax, no personal tax, no limits on repatriation of capital or profits.
Ajman International Business Companies (IBCs) (offshore)
Ajman free Trade Zone offer international business company (IBC) regimes. These companies are ideal for any type of business that does not require a local office. This includes any passive investment activity e.g. holding shares in local or free zone companies, holding UAE real estate, or trading activities outside the UAE. IBCs cannot rent office space nor can they apply for staff visas and they are not allowed to trade inside the UAE.
IBCs have the following attractive features:
- Not necessary for the owner or manager to visit Dubai
- No requirement to deposit capital in a bank account
- The only data on public record is the name of the company and date of incorporation
- No requirement to submit financial statements
As with local and free zone companies, offshore companies can benefit from some of the tax treaties concluded by the UAE, by setting up a free zone branch. If a local corporate bank account is required, for instance in order to benefit from the strong client confidentiality rules applicable in the UAE, then an offshore company from another jurisdiction is simply not a feasible option. There are very few banks in the UAE that even allow foreign entities to open bank accounts, and for the ones that do, the attestation fees are very high.