23 07 2020

Examples of offshore and onshore companies in the UAE

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The UAE is known for its favorable business environment around the world. Therefore, many businessmen seek to open their own business in the UAE and start enjoying the benefits provided by the UAE authorities. In the Emirates, for commercial activities, you can open an offshore or onshore company. How they differ, we described below with specific examples.

Popular offshore companies.

Recall that this type of company has a foreign owner. It is registered in the territory of the United Arab Emirates, but activities can only be carried out outside the territory of the UAE.

A good example is a travel agency engaged in the implementation of international tours. The mechanism of work is as follows: the company purchases tours from foreign tour operators and sells them on its territory. One of the main advantages of companies registered in the UAE operates here is the absence of income tax. The action of such a travel agency is absolutely legal, since the implementation of tours does not take place on the territory of the United Arab Emirates. A great way to competently use the advantages of opening offshore companies in the UAE.

Another example is related to trade, namely, imports. An offshore company buys goods in China and sells them in any other country at a higher price. Due to the absence of taxes, the margin is significantly increased. For this mediation scheme, two contracts with wholesale and retail prices are drawn up. You can buy an item for $ 100 and sell it for $ 200. Customs clearance takes place at the greater cost of the goods, $ 200 each. The offshore company receives the main profit. An absolutely simple and profitable scheme for making money and selling goods around the world.

Nex example is Consulting services. An offshore company is indicated when invoicing, therefore, profits are not taxed.

The same thing happens with mediation. Interest and commission payments are made to an offshore account.

Now consider a local or onshore company.

The main difference is that such a company must be registered in the Free Economic Zone and operate within its territory. And also, it is necessary to obtain a license for the type of activity that the company plans to engage in.

Here's an example: You have decided to open a beauty salon in Dubai. To begin with, you submit all the necessary documents for obtaining a license, then - the choice of premises and hiring personnel, and the final stage will be the purchase of materials and the necessary equipment for work. Only licensed specialists are entitled to provide cosmetic services.