06 Feb 2014 Incorporation of an Offshore Company in the Ras Al Khaimah Investment Authority
Formation Requirements and Procedure
An offshore company, as the name suggests, is a company which is incorporated outside the jurisdiction of its primary operations. One of the main reasons for incorporating a company outside one’s own jurisdiction is that the offshore jurisdiction has very low or no taxation and reporting restrictions. The United Arab Emirates is one such country which allows and offers foreigners to incorporate offshore companies with flexible requirements, conditions and a number of advantages as compared to other jurisdictions.
This publication provides a general overview of the requirements for the registration of an offshore company in the Ras Al Khaimah Investment Authority (the “RAKIA”), United Arab Emirates (the “U.A.E”).
Hiring a Registered Agent
In order to incorporate an offshore company, every applicant must hire a registered agent (the “Registered Agent”). As per the RAKIA Regulations on International Business Companies (2006), the Registered Agent is defined as a person or corporate body who is accredited by an Accreditation Body in UAE.
The Memorandum and Articles of Association
Like all other companies, an offshore company has to have a Memorandum and Articles of Association which must be registered with the Registrar of RAKIA through the Registered Agent.
An offshore company must have at least one shareholder. The shareholder of the company may be either a natural person or a body corporate.
An offshore company must have a minimum authorized share capital of ten thousand United Arab Emirates Dirham (AED 10,000), equivalent to; two thousand and seven hundred United States Dollar (USD 2,700). This share capital can be stated in more than one currency.
Nature of Shares
Shares of the offshore company may be issued in different classes. The shares of the offshore company shall:
- Be fully or partially paid up at the time of issuance;
- Carry the right to vote at board meetings of the company in accordance to the provisions of the Memorandum in respect to powers associated to a particular class of shares; and
- Not be bearer shares.
The Registered Office
The registered office of the company must be in Ras Al Khaimah, United Arab Emirates. This is usually the office of the Registered Agent.
The Objects of the Company
The Memorandum of every offshore company must contain an objects clause outlining the specific objects of the company. The objects clause of an offshore company differs to that of other companies, since an offshore company can own overseas financial and real estate assets, inheritance planning, setting up holding companies and special purpose vehicle, ship registration and tax optimization.
There are, however, certain restrictions placed on the objects of an offshore company. As per the RAKIA Regulations of International Business Company (2006), the offshore company is restricted to carry out the following activities:
- Carrying out activities in the UAE
- Carry on a banking business or business of an insurance company or reinsurance company, insurance agent or an insurance broker.
- Carry on any business which may be restricted by the relevant authority and its regulations under which the offshore company is established.
The offshore company must have at least one director who may be a natural person or a body corporate.
The offshore company must have a company secretary, who may be a natural person or a corporate body. The Director or Shareholder can also act as the Company Secretary.
The Directors and/or members may call a meeting at such time and place as deemed necessary. Participation in the meeting can be by telephone or any other electronic means.
The following documentation and information must be supplied upon registration:
- Copy of valid passport of shareholders and directors (notarized);
- Copy of signed curriculum vitae of shareholders and directors;
- Original bank reference letter of the shareholders and directors;
- Original utility bill attesting the residency of the individual;
- A copy of the utility bill would also suffice if the bank reference letter contains the residential address; and
- If applicable, a power of attorney issued in favour of any person signing the Memorandum and Articles of Association on behalf of shareholders.
If the shareholders and directors are a body corporate, then the following documents should also be submitted in addition to the above:
- Copy of the Memorandum and Articles of Association together with Register of Members and Directors and share certificates (notarised and apostilled);
- Copy of Certificate of Incorporation (notarised and apostilled);
- Original Certificate of Incumbency (notarised and apostilled);
- Original Certificate of Good Standing (notarised and apostilled);
- Original bank reference letter for the corporate body;
- Original shareholder’s resolution resolving and approving the incorporation of the offshore company (notarised and apostilled;.
- Original director’s resolution resolving and approving the incorporation of the offshore company (notarized and apostilled);
- Original Director’s resolution resolving and approving that the entity is to act as Director/Secretary of the offshore company (notarized and apostilled;.
- Original shareholder’s resolution resolving and approving that the entity is to act as Director/Secretary of the offshore company (notarized and appostilled);
- Copy of valid passport of the ultimate beneficial owners of the company (notarised).
Upon registration with RAKIA, the offshore company must pay the applicable registration fee of four thousand United Arab Emirates Dirham (AED 4,000) equivalent to; one thousand and ninety United States Dollar (USD 1,090) to the RAKIA through its Registered Agent.
In addition to the fee payable to RAKIA, the Registered Agent is also entitled to a registration fee.
Annual Renewal Fee
The RAKIA is also entitled to an annual renewal fee of two thousand and five hundred United Arab Emirates Dirham (AED 2,500) equivalent to; six hundred and eighty United States Dollar (USD 680).
In addition to the fee payable to RAKIA, the Registered Agent is also entitled to an annual renewal fee.
Advantages of Setting Up an Offshore Company in Rakia
Setting up an offshore company in the RAKIA provides a number of advantages. The setup ensures:
- There is no requirement to have a UAE national as a sponsor or Shareholder of the offshore company, thus allowing 100% foreign ownership;
- Any non-resident individual or corporation can register an offshore company;
- Shareholder is not required to be physically present in front of RAKIA or Registered Agent at the time of signing incorporation documents;
- Exemption from corporate and income taxes;
- No restrictions on foreign currency;
- Setting-up costs are less than that of an onshore company;
- There is no onshore office and employee visa requirement, thus, less cost;
- Minimum capital is required for the set-up of an offshore company;
- Authorization to open a bank account in the UAE; and
- Corporate ownership and business ensure beneficial owner’s confidentiality.
lecocqassociate provides professional company incorporation and corporate administration services in Malta, Switzerland and the UAE.
This newsletter is for information purposes only. It does not constitute professional advice or an opinion. Please contact Mr. Dominique Lecocq on moc.e1502997014taico1502997014ssaqc1502997014ocel@1502997014lrd1502997014 for any questions.