When setting up a business in Dubai, understanding the difference between an offshore and onshore company is crucial to choosing the right structure for your goals. Both options offer distinct advantages, depending on whether you plan to operate within the UAE market or focus on international trade. In this blog post, we will explore the key features of onshore and offshore companies in Dubai and the UAE, helping you make an informed decision about the best set-up for your business in Dubai. Keep reading to discover more.
What is a Dubai onshore company?
Firstly, an onshore company, also known as a mainland company, refers to a business entity that operates within the country where it is registered and adheres to local laws and regulations. In the case of a Dubai onshore company, it is established within Dubai’s mainland, allowing businesses to engage directly with the UAE market, including clients and suppliers, without any restrictions.
These companies are subject to UAE taxes, labour laws and economic regulations, making them a preferred choice for businesses seeking a substantial presence in the country. Onshore companies are well-suited for those looking to tap into the local consumer base or form partnerships with other companies in the region.
Onshore companies in Dubai benefit from credibility and access to government contracts, tenders and the broader UAE economy. They are often favoured by investors who want long-term stability and the potential for local growth.
Whereas in the past foreign nationals were not permitted to own the majority of their onshore company in Dubai, since 2021, this has changed. The amendment to the federal Commercial Companies Law (CCL) grants foreign investors full ownership of their companies and the opportunity to integrate fully into the UAE’s dynamic business landscape.
What is a Dubai offshore company?
Offshore companies, on the other hand, are business entities registered in a jurisdiction outside of the location where their primary operations are conducted. A Dubai offshore company is typically established in one of Dubai’s many designated free zones to facilitate international business activities without being subject to the full range of UAE taxes and regulations.
Offshore companies are commonly used for holding assets, protecting investments or conducting global trade without the need for a physical presence in Dubai. These companies offer privacy, asset protection and reduced tax obligations, making them ideal for investors looking for a flexible, cost-effective structure for international business.
Offshore companies are not permitted to conduct direct business within the UAE market or engage with local clients. The key advantage of a Dubai offshore company is its ability to operate globally. Additionally, offshore companies offer complete foreign ownership and have Avoidance of Double Taxation Treaty agreements (DTTAs) with 115 countries, including the United Kingdom.
The difference between an offshore and onshore company at a glance
To summarise, the difference between an offshore and onshore company in Dubai primarily lies in their scope of operations and regulatory requirements. An onshore company is established within Dubai’s mainland, allowing it to conduct business directly in the UAE market, making it ideal for businesses that require a physical presence and want to engage with the local economy.
In contrast, an offshore company is set up for international business activities, with no direct engagement in the UAE market. These companies benefit from tax advantages, full foreign ownership and fewer regulatory obligations, but they cannot operate within Dubai or the broader UAE.
Incorporate your onshore and offshore company today
Are you looking to establish your business quickly and easily? Europe Emirates Group makes the perfect partner for both onshore and offshore company set-up in Dubai. Our expertise spans across various industries, ensuring we can tailor solutions to meet your specific needs, whether you’re entering the local market or establishing an international presence.
Our approachable and professional team is dedicated to guiding you through every step of the process, ensuring compliance with all regulations while delivering fast, efficient and cost-effective services. Partnering with us means benefitting from deep local knowledge and a commitment to your success.
Contact us today to initiate the process.
