Due to this reason, it offers a good environment for companies, investors, and businessmen in terms of low taxes, non-disclosure and ease of operation, United Arab Emirates (UAE) has emerged as a leading economic player in the world. RAK Offshore and JAFZA Offshore are among the most popular of the many options that individuals have for creating an offshore business setup. To help you make an informed decision, key differences between RAK Offshore and JAFZA Offshore will be discussed in this article. FAR Consulting Middle East is a consultancy firm in Dubai that can offer the necessary assistance in making the right choice concerning the formation of an offshore company in the UAE.
What is an offshore company in UAE?
An offshore corporation is defined as a legal entity that is incorporated in a taxation haven that is different from the place where it mainly operates. Offshore businesses are generally utilized in the UAE for:
- Protection of assets
- Planning for taxes
- Keeping investments
- Managing global commerce
Although they are not permitted to operate domestically, offshore businesses in the United Arab Emirates are permitted to do business abroad.
Formation of RAK Offshore Company
The RAK International Corporate Centre (RAK ICC) is in charge of overseeing Ras Al Khaimah (RAK) Offshore, which was founded in 2006. It has swiftly emerged as the go-to option for business owners looking for affordable offshore solutions.
Important Features of RAK Offshore Company
- Cost-Effectiveness: RAK Offshore is a great option for small and medium-sized businesses (SMEs) because of its reasonable setup and maintenance costs.
- Tax Benefits: RAK Offshore provides 0% corporation and income tax, just like other offshore jurisdictions in the United Arab Emirates.
- RAK ICC guarantees a high degree of confidentiality by not disclosing directors or shareholders to the public.
- Multi-currency bank features: The jurisdiction is appropriate for international trade because it permits multi-currency bank accounts.
- Ease of Incorporation: Due to the simple registration feature, the incorporation can be done in merely 2 business days.
Advantages of RAK Offshore Company
- Foreign investors have full ownership.
- No need for workers or a physical office
- Possession of real estate in specific UAE locations
- Recognition and repute on a global scale
Disadvantages of RAK Offshore Company
- Not allowed to do business in the UAE mainland
- Restricted scope of operations in contrast to businesses operating in open zones
Formation of a JAFZA Offshore Company
Operating under the Jebel Ali Free Zone, one of the oldest and most respected free zones in the United Arab Emirates, the Jebel Ali Free Zone Authority (JAFZA) Offshore was founded in 2003. Many companies that need a more distinguished jurisdiction choose JAFZA Offshore.
Important Features of a JAFZA Offshore Company
- Global Reputation: Businesses registered under the Jebel Ali Free Zone are more credible due to JAFZA’s affiliation with it.
- UAE Property Ownership: Unlike many other offshore jurisdictions, JAFZA Offshore firms are allowed to own real estate in Dubai.
- Banking Flexibility: Businesses with JAFZA of Benefits registrations
- Foreign investors have full ownership.
- No need for workers or a physical office
- Possession of real estate in specific UAE locations
- Recognition and reputation on a global scale
Advantages of JAFZA Offshore Company
High recognition and standing on a global scale
- Possession of real estate in Dubai
- No limitations on the repatriation of capital or currency
- Increased trustworthiness with financial institutions and banks
Disadvantages of JAFZA Offshore Company
- More expensive to set up and maintain than RAK Offshore
- Lengthier incorporation process
- Limited to specific business activities
Key Differences Between RAK Offshore and JAFZA Offshore
| Feature | RAK Offshore | JAFZA Offshore |
| Cost | More affordable | Relatively expensive |
| Property Ownership | Limited to designated areas | Can own property in Dubai |
| Reputation | Suitable for SMEs | High international credibility |
| Setup Time | 2-3 working days | Up to 10 working days |
| Compliance Requirements | Relatively simple | More stringent |
| Corporate Structure | Minimum one shareholder/director | Minimum one shareholder, two directors |
So, Rak vs JAFZA offshore company formation: What’s the Best Choice for You?
As a result the decision between RAK Offshore and JAFZA Offshore is solely depending on the priorities of your business and the goals to be achieved. The following situations will help you make an informed decision:
- Cost-Effectiveness: RAK Offshore is more preferable if you are a small and medium enterprise operating under the policy of reducing cost.
- Credibility and Reputation: JAFZA Offshore is recommended for those organizations that require banking connection and optimum credit worldwide.
- Property Ownership: JAFZA Offshore is the only offshore jurisdiction of the United Arab Emirates where ownership of property in Dubai is allowed.
- Time Sensitivity: RAK Offshore’s quicker setup procedure could be more suitable; faster incorporation is required.
- Compliance standards: RAK Offshore is suitable if you are interested in the less stringent rules of compliance. Nevertheless, JAFZA Offshore is more suitable in case you value strict adherence to strict legal guidelines to be credible.
Could you still not select the best option for your offshore company formation?
- RAK Offshore and JAFZA Offshore are the better and the suitable for forming the offshore corporation in the United Arab Emirates since both companies have their own benefits. Any assistance in the registration of an offshore company is provided by Farahat & Co., which is one of the leading business consultants in the UAE. These can advise you more on the correct jurisdiction that you should consider incorporating depending on the operational requirements, costs as well as goals you intend to achieve.
- To expand on your experience and establish the environment for your world win, get in touch with FAR Consulting Middle East However, if they want further information regarding the services, pass and call them or visit the website.
