What is the difference between Free zone and Offshore?

The United Arab Emirates is proving to be one of the most lucrative business destinations in the entire world. It boasts of the highest GDP in the Gulf region. It is also home to cities like Dubai, Abu Dhabi, and Sharjah, which are some of the wealthiest cities in the world. Dubai, in particular, has grown to be one of the most popular commercial cities in the world. It attracts a staggeringly large number of foreign investors as well. There are many ways foreign investors can form companies in Dubai and the rest of the UAE. Let’s explore the intricacies of each.

Offshore Company Formation – The Process

Onshore company formation in Dubai by foreign nationals is permitted by it involves a lot of paperwork and restriction. One can only form a limited liability company and also needs an Emirati national to sponsor their company. For that reason, companies have the option to choose between offshore company formation. Offshore company formation involves some restrictions as well.

For example, if your company is registered offshore then you cannot trade your goods and services in the UAE. You may operate within the UAE, but you cannot trade within it. Benefits include 100% import-export and corporate tax exemption.

Free Zone Company Formation Is The Best Option For You

The Emirati government demarcated lots of geographical areas within the UAE as Free Trade Zones. Dubai itself has around 30 Free Zones that are currently operational. Companies that opt for Free Zone company setup enjoy a lot of benefits apart from the ones they already enjoy for being foreign investors. Free Zone companies have to pay no corporate tax and import-export duties to the Emirati government.

Also, if you opt for a Free Zone company setup, you can enjoy 100% ownership and full tax exemption. There are also fewer restrictions on your trading capabilities. Obtaining a Free Zone license is also very easy and involves minimum bureaucratic barriers.

Engage The Services Of Consultants To Help Setup Your Company

Although the process of company formation in Dubai is simple compared to other countries, it can still be a very intimidating task. There are a lot of legal and financial formalities to be made. As a result, you will be better off by engaging the services of business setup consultants like Dubai Business Setup to do this work for you. They provide consistent and satisfactory results.