Starting a business in the UAE opens up fantastic possibilities. However, one question puzzles entrepreneurs: do you go with an offshore or onshore setting? The appropriate choice depends entirely on your objectives. This article explains the crucial differences to decide which one might be the right fit for you.
JBC, Jitendra Business Consultants can help you decide on important questions like where to open your business in UAE.
Onshore Companies in the UAE
Companies onshore or mainland companies, operate directly in the UAE market. They are governed by local laws and regulations and therefore are considered suitable for business ventures targeting the local economy.
Key Features of Onshore Companies:
- Market Access: These companies can freely interact with clients and suppliers across the UAE.
- Regulatory Compliance: They are governed by UAE taxes, labor laws, and economic regulations.
- Ownership Rules: Since 2021, most industries allow foreign nationals to own 100% of an onshore company, and thus, no local partners are required.
Benefits of Onshore Companies in UAE
- Government contracts and tenders can be considered as credible.
- Local consumer base is growing.
- Stability and growth in the long term
Who Should Opt for Onshore Setup?
If you want to cater to the UAE market or establish a physical presence in the region, then the onshore setup is the way to go.
Offshore Companies in the UAE
Offshore companies are also for international businesses. They are registered in the UAE but run outside its shores.
Offshore Company Features:
- International Business Focus: The holding of assets, international trade, or management of investments can be best suited for offshore companies.
- Tax and Privacy Advantages: They provide minimum tax liabilities as well as discretion.
- Foreign Ownership: Full ownership is allowed for them.
- Prohibited: Offshore companies cannot trade directly within the market in the UAE or deal with local customers.
Benefits of Offshore Companies in UAE:
- Lower operational costs.
- Easy compliance with regulations.
- Options for global markets even without any location.
Who Should Opt for an Offshore Setup?
Businesses that undertake global trade with an emphasis for asset protection/ tax efficiency operate best with this kind of setup.
Comparing Onshore and Offshore Setups
Here’s a quick look at the main differences between onshore and offshore businesses in the UAE:
| Feature | Onshore Company | Offshore Company |
| Market Access | Operates within the UAE | Restricted to international markets |
| Ownership | 100% foreign ownership allowed (in most cases) | Full foreign ownership |
| Tax Obligations | Subject to corporate tax and VAT | Reduced tax liabilities |
| Business Activities | Engages with UAE clients and suppliers | Focuses on global operations |
| Setup Costs | Higher due to licensing and office space | Lower with fewer operational needs |
Why UAE for Setting Up Business?
UAE has become the haven for entrepreneurs around the globe with its strategic location, solid infrastructure, and investor-friendly policies. Be it onshore or offshore, the city provides unprecedented support.
Benefits of Starting Business in UAE:
- Ease Doing Business: Simplification in licensing and registration.
- Tax-Friendly Scenario: No income tax for natural persons and comparative corporate tax levels.
- World-Class Free Zones: Dedicated for offshore entity formation with additional benefits as per segment.
Choosing the Right Option
The decision to go onshore or offshore depends on the objectives of your business.
- If you want to target the UAE market or need a local presence, then go for onshore.
- Offshore is the best option if your goal is to target international trade, asset protection, or cost efficiency.
Why Choose Jitendra Business Consultants?
Onshore and offshore setup has their exclusive advantages. Now, you can differentiate between your preferences and the requirements of the market. With the help of JBC consultants, you get to choose what best suits your goal. Setting up a business in the UAE is easier with our expert services. Be sure that you choose us and take it in the right direction.
