Double Tax Treaties
Double tax treaties are aimed at making UAE a more attractive territory in which to operate by reducing taxation levied in the foreign jurisdiction on profits remitted abroad by foreign corporations operating here.
UAE has an extensive and growing list of double tax treaties, which currently numbers over 60. This network includes treaties with China, Cyprus, France, Germany, India, Indonesia, Italy, Luxembourg, Malaysia, Malta, the Netherlands, Singapore, South Korea and Ukraine.
Over the last couple of years United Arab Emirates has signed important tax treaties with developed countries like China, Egypt, Finland, France, Germany, India, Italy, Malaysia, Sri Lanka , UK, Switzerland. Another important aspect is that UAE is not blacklisted by EU, UN and OECE therefore companies that are incorporated under this Jurisdiction can be extremely useful for tax planning purposes.
Exchange of Information
The majority of UAE treaties do not contain the new OECD exchange of information clause.
Even with a post 2005 OECD information exchange clause, countries are not at liberty to enter into “fishing expeditions”.
Information exchange even under a new treaty is far more restricted than, for example, information exchanges pursuant a Tax Information Exchange Agreement (TIEA), that many OECD grey list countries will be forced to enter into.
JEBEL ALI OFFSHORE COMPANY
One of the latest initiatives by the Jebel Ali Free Zone has been the setting up of offshore companies which are regulated by the Jebel Ali Free Zone (JAFZ) Offshore Companies Regulations 2003. This company can be used to own real estate properties on the Palm Islands, properties owned by Nakheel Company LLC and any other real estate approved by the JAFZ Authority. A JEBEL ALI OFFSHORE COMPANY requires two directors to be appointed and minimum one shareholder. Corporate shareholders are authorized but corporate directors are not permitted. One residence visa can be issued for one director provided the company maintains an office in the JAFZ, but the company will not be allowed to do business within UAE, with UAE residents or trade in JAFZ/UAE unless it has first obtained the appropriate license in the free zone.
The company can hold a bank account in the UAE for conducting routine operational transactions. The Register of Members is open for inspection by any member of the offshore company and any other person. Details of Directors are not available for public inspection. Companies must maintain a registered office within JAFZ, have a secretary and keep accounting records. Every company must appoint an approved auditor to examine and report on the accounts in accordance with the regulations. Registration of the company in free zone will take between 1 to 2 weeks.
RAS AL KHAIMAH INTERNATIONAL COMPANY
In September 2006, Ras Al Khaimah Government launched an offshore facility, the second in the UAE, which is regulated by the Ras Al Khaimah Free Trade Zone Authority International Companies Regulations 2006.
100% foreign ownership is allowed. The law must be cited in the Memorandum & Articles of Association. RAKFTZ have imposed very few restrictions on the activities of International Companies allowing for a wide range of business activities to be carried out.
The International Company can own any local freehold real estate property.
Despite a general prohibition on International Companies to conduct business with persons resident in UAE, the Authorities frequently allow offshore companies to hold shares in both offshore and onshore UAE companies.
The International Company can hold a bank account in the UAE for the purpose of conducting routine operational transactions and can also maintain professional relations with legal consultants, accountants and management companies or other similar persons carrying out business within UAE. Incorporation documents can be signed at our associated offices without having to visit. A shelf company list of RAK Offshore companies can also be provided upon request.