Offshore Company (IBC) in United Arab Emirates
IBC · Formation from $2,000
Last verified: June 13, 2026
Corporate Tax
9.0%
State Tax
0.0%
Formation Cost
$2,000
Annual Fee
$2,000
Comparison Scores
Privacy, remote setup, banking, and tax efficiency
Calculate full formation cost
Break down one-time filing fees and recurring costs for any supported entity type.
Who Should Choose This?
Profiles that typically benefit from this entity
- International traders and consultants operating entirely outside the UAE.
- Founders seeking a tax-efficient holding company for global assets or subsidiaries.
- High-net-worth individuals looking for asset protection and estate planning.
- Investors wanting to purchase and hold Dubai real estate (specifically using a JAFZA offshore company).
Who Should Avoid This?
Scenarios where another structure may be better
- Entrepreneurs who need UAE residency visas for themselves or their team.
- Businesses planning to sell products or services directly to UAE customers.
- Startups that need quick and easy access to standard UAE corporate banking.
- Companies requiring physical office space or warehouses in the UAE.
Advantages
- +100% foreign ownership permitted with no requirement for a local UAE sponsor.
- +High level of privacy with no public register of shareholders or directors.
- +0% corporate tax on qualifying international income, subject to economic substance rules.
- +Fast and fully remote incorporation process available for RAK ICC and Ajman jurisdictions.
- +JAFZA offshore entities are legally permitted to own real estate properties in Dubai.
- +No minimum paid-up share capital requirement to incorporate.
Disadvantages
- -Strictly prohibited from conducting business with UAE mainland residents or companies.
- -Cannot obtain UAE residency visas for founders, directors, or employees.
- -Opening a corporate bank account in the UAE is extremely difficult without local substance or a resident director.
- -Cannot rent physical commercial office space in the UAE (only a registered address is provided).
- -Subject to Economic Substance Regulations (ESR) and mandatory Federal Tax Authority (FTA) registration since 2023.
Formation Steps
Step 1: Choose the offshore jurisdiction (RAK ICC, JAFZA, or Ajman) based on your business and banking needs.
Step 2: Select and hire an approved UAE Registered Agent, which is legally mandatory for offshore formation.
Step 3: Submit three proposed company names for approval by the respective offshore authority.
Step 4: Prepare and notarize KYC documents, including passport copies, utility bills, and bank reference letters.
Step 5: Draft and sign the Memorandum and Articles of Association (MOA & AOA).
Step 6: Submit the final application and pay the state incorporation and registered agent fees.
Step 7: Receive the Certificate of Incorporation and corporate documents (typically within 3-7 days).
Step 8: Register the newly formed entity with the UAE Federal Tax Authority (FTA) for Corporate Tax compliance.
Cost Breakdown
Detailed breakdown of formation and ongoing costs
| Item | Type | Amount |
|---|---|---|
| State incorporation fee (RAK ICC / Ajman average) | One-time | $1,000 |
| Registered Agent fee | Annual | $1,000 |
| Compliance & KYC onboarding | One-time | $400 |
| FTA Corporate Tax Registration | One-time | $100 |
| Annual state renewal fee | Annual | $1,000 |
| First year total | $2,500 | |
| Annual ongoing | $2,000 | |
Real-World Examples
Typical use cases for this entity type
- A European e-commerce entrepreneur uses a RAK ICC offshore company to hold intellectual property and manage international supplier contracts, keeping profits in a tax-neutral environment.
- A family office sets up a JAFZA offshore company specifically to legally hold luxury real estate properties in Dubai while maintaining strict privacy.
- An international consulting firm uses an Ajman offshore entity as a holding company for its various subsidiaries across Asia and Africa to centralize dividend income.
Common Mistakes
Pitfalls to avoid during setup and operations
- Assuming an offshore company automatically grants access to UAE corporate banking.
- Confusing an Offshore company with a Free Zone company and expecting visa eligibility.
- Failing to register for UAE Corporate Tax with the FTA, assuming 'offshore' means exempt from registration.
- Trying to conduct local UAE business using an offshore license, risking severe penalties.
- Ignoring Economic Substance Regulations (ESR) reporting requirements, leading to heavy fines.
Other entity types
Other formation options in United Arab Emirates
Compare with Other Countries
| Country / Type | Tax | Formation | Annual |
|---|---|---|---|
| 🇦🇪 Offshore Company (IBC)(IBC) | 9.0% | $2,000 | $2,000 |
FAQ
Can a UAE offshore company do business inside the UAE?
No. UAE offshore companies are strictly international entities and are prohibited from trading with UAE mainland companies or consumers.
Can I get a UAE residency visa with an offshore company?
No. Offshore companies do not grant visa eligibility. If you need a residency visa, you must set up a Free Zone or Mainland company.
Is it easy to open a UAE bank account for an offshore company?
No, it is notoriously difficult. UAE banks require strict KYC, proof of source of funds, and often demand local substance (like a resident director) to open an account for an offshore entity.
Do UAE offshore companies pay corporate tax?
They are subject to the UAE Corporate Tax regime introduced in 2023. However, they can enjoy a 0% tax rate on 'Qualifying Income' if they meet strict economic substance requirements.
Can a UAE offshore company own real estate in Dubai?
Only offshore companies registered in JAFZA (Jebel Ali Free Zone Authority) are legally permitted by the Dubai Land Department to own real estate in Dubai.
Do I need to visit the UAE to set up the company?
It depends on the jurisdiction. RAK ICC and Ajman offshore companies can be set up 100% remotely. JAFZA may require an in-person visit or heavily notarized documents.
Are the details of shareholders publicly available?
No. The UAE offshore registries do not maintain a public database of shareholders or directors, offering a high level of privacy.
What is the difference between a Free Zone company and an Offshore company?
Free Zone companies can have physical offices, obtain residency visas, and trade within the zone or internationally. Offshore companies are just legal entities with a registered address, no visas, and no local trading.
Detailed Tax Rates
Corporate Income Tax
| From | To | Rate |
|---|---|---|
| $0 | $102,110 | 0.0% |
| $102,110 | No limit | 9.0% |
The UAE introduced a 9% federal corporate tax effective June 2023. Offshore companies may benefit from a 0% rate on 'Qualifying Income' if they meet strict substance requirements, but non-qualifying income is taxed at the standard 9% rate.
Personal Income Tax (Top rate: 0.0%)
| From | To | Rate |
|---|---|---|
| $0 | No limit | 0.0% |
The UAE does not levy personal income tax on individuals. Salaries, wages, and personal investment income are 100% tax-free.
Capital Gains Tax
0.0%
Capital gains are generally exempt for individuals. For corporations, capital gains are exempt if they qualify for the participation exemption (e.g., holding at least a 5% ownership stake).
VAT / GST
5.0%
Registration Threshold: AED375,000
Non-resident providers of digital services must register for VAT regardless of the threshold if supplying to UAE consumers.
Withholding Tax
The UAE domestic withholding tax rate is currently 0% on all outbound payments, including dividends, royalties, and interest.
Payroll & Social Security
No social security contributions are required for expatriate employees, though employers must provide an end-of-service gratuity. UAE nationals are subject to a 12.5% employer and 11% employee pension contribution.
Other Taxes
Property Transfer Tax
A 4% transfer fee applies to real estate transactions in Dubai, typically split equally between the buyer and the seller.
Municipal Tax
Municipal taxes are levied on properties, generally calculated as 5% of the annual rental value for residential properties and 10% for commercial properties.
Banking & Payments
ADCB (Abu Dhabi Commercial Bank)
Accepts UAE offshore companies but requires high minimum balances and strict in-person KYC.
RAKBANK
Popular for RAK ICC offshore entities, though physical presence is usually required for account opening.
Currenxie
Remote-friendlyGlobal EMI that supports UAE offshore companies for multi-currency B2B transactions.
Payoneer
Remote-friendlyGood alternative for cross-border payments and B2B invoicing, accepting offshore entity registrations.
Payment Gateways
2Checkout, Paddle, Payoneer Checkout, Bank Wire
Currency
AED
Multi-Currency: Supported
Account Opening
Extremely difficult. Traditional UAE banks require high minimum balances (often $50,000+) and strict KYC for offshore entities. Stripe and PayPal do not support UAE offshore companies directly as they lack a trade license, so founders often rely on international EMIs or bank wires.
Practical Information
Timezone
UTC+4 (Gulf Standard Time)
Business Language
English, Arabic
Legal System
Common Law (RAK ICC) / Civil Law (Mainland)
Ease of Doing Business
#16
IP Protection
Strong. UAE offshore companies are frequently used as holding entities to protect intellectual property, trademarks, and patents globally.
Double Tax Treaties
140 countries
Notable treaties: United Kingdom, India, China, Singapore, Germany
Visa & Residency Options
No Direct Visa Eligibility
UAE offshore companies do not grant residency visas. Founders must obtain visas through a Free Zone company or other means.
Golden Visa (via Real Estate)
Founders can obtain a 10-year Golden Visa by investing AED 2 million in UAE real estate, which can be legally held by a JAFZA offshore company.
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Changelog
Data updates and changes on this page
Verified 2026 formation costs, FTA registration requirements, and updated corporate tax implications for qualifying income.
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