Despite increased pressure from governments and tax authorities against so called tax heavens offshore companies, often narrow mindedly perceived synonymously with tax evasion, remain a versatile corporate vehicle for flexible structures in various constellations and for many reasons in the modern business world.

Offshore companies are corporate entities that are normally incorporated outside of one’s country of residence in a jurisdiction offering such a structure. The offshore company, often also called as international business company is normally not allowed to carry out any business within that jurisdiction but only outside, i.e. “offshore”. As a result it typically is not required to take up office space at its place of incorporation. Instead a registered offshore agent provides its address as a registered office address. Often the company officially and literally only has a letter box as its registered address. Therefore an offshore company is always required to be established through a registered agent for the purpose of dealing with official communications with the company registrar. That does not only apply for the registration process but also for the annual renewal procedures and any other procedures such as share transfers, etcetera. 

There are numerous offshore jurisdictions worldwide which makes it not always easy to find the most suitable jurisdiction depending on the purpose and intention for its establishment. Because of the need to deal with every process through the registered agent, not only the choice of jurisdiction has a bearing. The choice of the right offshore agent may become equally important.  

An investor, be it an institutional or individual one, may be encouraged to go for an offshore company if he requires a cheap separate legal entity to carry out certain functions. Though tax considerations may be a factor, offshore companies provide flexible solutions for different objectives such as privacy protection, asset protection and estate planning, flexible and slim holding structure for investments into real estate, intellectual properties or shares in other companies. Under certain circumstances offshore companies are also suitable in international trade transactions. 

Confidentiality is usually a given as most offshore jurisdictions have strict rules and regulations in place to ensure that the identities and activities of investors remain confidential. However, offshore jurisdictions may still be obliged to comply with official investigations from other local authorities of the same jurisdiction, certainly in relations to suspected criminal activities. As such tax evasion has been high on the agenda of European and American lawmakers and offshore jurisdictions such as the Bahamas or British Virgin Islands which are closely tied to those Western jurisdictions have been under pressure to provide information to tax authorities. 

In the UAE we have seen offshore companies active in real estate as holding companies, with a wider purpose of estate planning; as international business companies, for example to run a consultancy business, and even as developers in large developments. 

Although the pressure on KYC and AML is ever so high in the UAE many banks in the UAE allow offshore companies to open a specific type of bank account for their business known as “call account”. The call account owner will be provided with an ATM card as well as internet banking facilities. However, the banks normally do not offer any credit facilities such as credit cards, mortgage, loan or a cheque book to call account holders. 

Fichte & Co is licensed registered agent within the Ras Al Khaimah Offshore Authority, a subsidiary of the Ras Al Khaimah Investment Authority, and can assist with and offer clients all services with regards to registration and establishment of a Ras Al Khaimah (RAK) Offshore Company. 

The RAK Offshore Company allows for 100% foreign ownership and will be exempted from all corporate and income taxes. There is a wide list of available activities available however any banking and financial services as well as insurance or reinsurance activities are prohibited. 

For further inquiries about RAK Offshore Companies as well as any other offshore jurisdictions, for which we work together with external offshore agents, please contact the author

Bahareh Alizadeh 

For more information please contact : bahareh.alizadeh@fichtelegal.com