Why would you own a property in Dubai through an offshore company and not in your own individual name?

Why would you own a property in Dubai through an offshore company and not in your own individual name?

What is the main benefit of owning property through an offshore company? Is it not better to have the property held in your own name or joint names?

The inheritance laws in Dubai are not as straight forward, nor the same, as those back in the UK or the European Union. If a foreigner owns property in Dubai and passes away, the laws of their home country may not apply to their assets. Under Sharia Law there is a fixed distribution of assets upon death of the deceased owner and there is no concept of ‘right of survivorship’, for example where property passes to the surviving joint owner. By structuring your property into an offshore company, you ensure that Sharia Law will most definitely not apply to your assets and that lengthy probate proceedings are avoided.

What type of offshore companies can we use?

Since 1st January 2011, the only offshore company that can be used to hold real estate owned in Dubai is the Jebel Ali Offshore Company. This company does not allow you to trade, give you residency nor work permits. The shares of the Jebel Ali Offshore Company can be held in personal names but we usually have the shares held by an offshore company 100%. We recommend common law offshore jurisdictions such as British Virgin Islands. This means that if a death occurs Sharia Law will not apply as your assets would be held in the name of the offshore entity and not in individual names. The probate process would also take place in foreign courts.

What are the other benefits of holding a property in Dubai offshore?

The offshore entity can be designed to suit joint investors. So a group of investors can hold shares in an offshore entity that ultimately protects their portion of shares in the property. It also provides confidentiality and privacy. Hence protecting your assets.

Setup an Engineering Consultancy License in Dubai

Setup an Engineering Consultancy License in Dubai (Dubai Municipality Requirements)  To be a UAE national To be holder of a BSc. Degree in engineering from a recognized university in one of the engineering fields for which he requires to obtain a license. To have experience in the specialization field not less than three years after obtaining the university degree To be a member of the Engineers’ Association in the Country Not to be an owner or a partner in any of the contracting companies nor building materials trading companies Expatriates may, pursuant to the stipulations and conditions provided for, apply for registration in the register of engineers subject to the following conditions: To be exclusively dedicated to the business of the Engineering Firm To have experience in the concerned engineering field not less than 5 years after obtaining the university degree. Expatriate engineer must reside in UAE not less than 9 months in a year. One more expatriates may join the firm; provided they are entered in the Register of Practicing Engineers and the maximum shareholding in the capital allowed shall not exceed 49%. Engineering firm operating in Dubai shall adopt one of the following forms: Local Engineering Firm A local engineering firm is the firm owned by one or more UAE nationals who are entered in the Register. One or more expatriates may have share in the ownership of the firm, provided that they are entered in the Register and maximum such ownership allowed in 49%.  A local engineering firm can be classified as follows: For UAE nationals  ( Not Less Than )  Category I    10  Category II    5 Category III   3 For Expatriates ( Not Less Than )  Category I    15 Category II    10 Category III    5 An Associate Engineering Firm : A local engineering firm classified as first category may associate with a foreign engineering firm in establishing not more than one associate engineering firm to carry out some specialised engineering works, provided that such firms should have previously practiced the engineering profession for a period not less than 10 years inside or outside the country in the field required to be licensed.  An Expert Engineering Firm  : An expert engineering firm is the firm carrying out some of the sophisticated specialised engineering works. Its work shall be limited to provide opinion to the local engineering firms, the associate engineering firms or any of the official bodies. The applicant of the expert engineering firm license must hold a scientific degree in a sophisticated engineering specialisation, have practiced the profession in his sophisticated specialisation for a period of not less than 15 years and require to carry out the activity personally. It is conditional for an expert engineering firm ( if the licensee is an expatriate ) to appoint a UAE national as a local service agent whole domicile is in Dubai.  Kind Regards Vithul Murali  Dubai Mobile : +971 505573538 Email : Vithul@a2zconsultus.com Skype : Vithul.murali

Legal Forms of Companies in Dubai ( Definition & Ownership Rules )

Sole Proprietorship

Definition: A Sole Proprietorship is a business owned by an individual, not a company. This person will own 100% of the business, control all of its operations and keep 100% of any profits. He or she will also be 100% responsible for business debts and any other financial obligations.

Ownership Rules: A professional-type Sole Proprietorship can be owned by an individual of any nationality. If the owner is a National of a country other than the UAE or GCC, they require a Local Service Agent (LSA).

An industrial or commercial type Sole Proprietorship can be owned only by UAE Nationals or GCC Nationals.

Activity–based exception:

A sole proprietorship that offers legal services — known as a legal consultancy — does not require a local service agent.

Civil Company

Definition: A Civil Company is a business partnership for professionals in recognized fields such as doctors, lawyers, engineers and accountants. A Civil Company can only practice professional business and is 100% owned by professional partners.

Ownership Rules: A Civil Company can be owned by professional partners of any nationality. If the owner is a National of a country other than the UAE or GCC, they require local Service Agent (LSA).

A foreign company can be a partner in a Civil Company, as long as the foreign company is in the same profession as the civil company.

Activity-based Exceptions:

An engineering Civil Company must have one partner who is a UAE National, who owns no less than 51% of the business and who must be an engineer of the same business activity. A Civil Company that offers legal services does not require a local service agent.

JAFZA ( Jebel Ali Free Zone Authority ) Company Formation a Brief

Over its 27 year history, Jafza has evolved into a dynamic trade catalyst ecosystem that enables business and creates new opportunities for growth. From a modest start in 1985 with just 19 companies, Jafza today flourishes as a business community with over 7,100 companies including 100 of the Fortune 500s.

Jafza’s vision, inline with the vision of His Highness Sheikh Rashid Bin Saeed Al Maktoum, is to be the leading provider of sustainable industrial and logistics infrastructure solutions. We are dedicated to our customers, our employees, our shareholders and our community, and uphold our commitment to each one of our stakeholders.

Activities Allowed By Free zone

Any activity may function in jafza after the approval of the environment, Health , Safety,  and security department (EHSS)

Most of the jafza –based companies fall under the activity heading of trading , Manufacturing and services industries. In order from most to least numerous, companies in jafza come from the Middle east , Europe, the Indian sub continent, Americas, far East, Africa and others.

New responsible sourcing certification programme for gold- DMCC

Fujairah Gold Refinery first to join new DMCC’s Market Deliverable Brand (MDB) initiative Dubai, UAE; 3 February 2014: DMCC, Dubai’s and the region’s global gateway for commodity trade and enterprise, has confirmed the launch of its new responsible sourcing Market Deliverable Brand (MDB) accreditation initiative designed to certify gold and silver refineries (in operation for over one year) for their quality and technical production of gold and silver. For gold refineries specifically, the certification also includes responsible sourcing of gold bars in accordance with the ‘DMCC Guidance’ and ‘Review Protocol’.

  Gautam Sashittal, Chief Executive Officer, DMCC said:  

“It is important for Dubai, as one of the largest physical gold trading hubs in the world, to give industry participants the assurance that they can trade with confidence knowing that upcoming refineries in the UAE and globally comply with international trade and responsible sourcing best practices. DMCC’s Market Deliverable Brand (MDB) accreditation initiative marks an important milestone as it enables refineries in operation for over one year to ensure their gold is sourced responsibly and that their gold and/or silver production processes are in line with globally accepted best practices to assure quality of their gold and/or silver products.

Company Incorporation in DMCC - Zero Personal and Corporate Tax

Established in 2002 by Royal Decree, DMCC is a strategic initiative of the Government of Dubai with a mandate to enhance the commodity trade flows through the emirate by providing the appropriate physical and financial infrastructure, regulation, products and services required.

Business setup in Dubai ( Legal structure ) 

Legal Structures for Business

Previously, each emirate followed its own procedures governing the operations of foreign business interests. Since 1984, steps have been taken to introduce a codified companies’ law which is applicable throughout the UAE. Federal Law No. 8 of 1984, as amended by Federal Law No. 13 of 1988 – the “Commercial Companies Law” – and its by-laws have been issued and in basic terms the provisions of the Law are as follows:
Unless you open your business in Dubai within one of the free trade zones, where 100% foreign ownership is permitted, the Federal Law stipulates a total local equity of not less than 51% in any commercial company and defines seven categories of business organisations which can be established in the UAE. It categorises and defines the requirements in terms of shareholders, directors, minimum capital levels and incorporation procedures. It further lays down provisions governing conversion, merger and dissolution of companies.

The seven categories of business organisations defined by the law are:

• General partnership company
• Partnership-en-commendam
• Joint venture company
• Public shareholding company
• Private shareholding company
• Limited liability company
• Share partnership company

Limited Liability Company (LLC)

A Limited Liability Company can be formed by a minimum of two and a maximum of 50 persons whose liability is limited to their shares in the Company’s capital. The time required to form a company will be approximately 1-2 weeks from the date of receipt of all the documents. and procedures and the breakdown of the cost can be given upon request.

The Majority of Companies with expatriate partners have opted for this Limited Liability Company, due to the fact that this is the only option which will give maximum legal ownership i.e. 49% to the expatriates for a trading license.
Fifty-one per cent participation by UAE nationals is the general requirement for the Limited Liability Companies. Therefore the normal shareholding pattern for an LLC will be:
Local sponsor(Partner) – 51% and   Foreign Shareholder (s) – 49%
So You can have an  trading Company (commercial License with 51% share of local and 49% expat ) but would require you to appoint a local sponsor. It the local will be provided by us we will give you complete guarantee for him that he will not interrupt your business though he is 51% owner, But you will pay him annually some amount.

Several steps are required to establish a Limited Liability Company in Dubai, and these will include the following:-

• Selecting a commercial name for the Company and having it approved by the Licensing Department of the Economic Department.
• Drawing up the Company’s Memorandum of Association and having it notarized by a Notary Public in the Dubai Courts.
• Seeking approval from the Economic Department and applying for entry in the Commercial Register.
• Once the approval is granted, the Company will then be entered into the Commercial Register and have its Memorandum of Association published in the Ministry of economy and Commerce’s Bulletin.The license will then follow, which will be issued by the Economic Department.
• The Company should then be registered with the Dubai Chamber of Commerce and Industry.

Branch Offices

Foreign companies are permitted to establish wholly owned branches and representative offices in the U.A.E.; however, these offices are limited in the activities they may conduct within the U.A.E. (Article 314 of the Commercial Companies Law).

Only UAE nationals or companies 100% owned by UAE nationals may be appointed as local agents. Local agents (sometimes referred to as sponsors) are not involved in the operational side of the company, but merely assist in obtaining visas, labour cards etc, and are paid a lump sum and/or a percentage of the profit or turnover.

The main difference between a representative office and a branch office is that a representative office theoretically is limited to gathering information and soliciting orders and projects to be performed by the company’s head office. In this regard, representative offices are also limited in the number of employees they may sponsor (typically three or four). A representative office serves as an administrative and marketing center for the foreign company. By contrast, a branch office is a full-fledged business, permitted to perform contracts or conduct other activities as   Specified in its license

To establish a branch or representative office in Dubai, a foreign commercial company should proceed as follows:

• Apply for a licence from the Ministry of Economy and Commerce, submitting an agency agreement with a UAE national or 100% UAE owned company. Before issuing the licence, the Ministry will:
• forward the application to the Economic Department to obtain the approval of the Dubai government;
• forward the application specifying the activity that the office or branch will be authorised to undertake in the UAE, to the Federal Foreign Companies Committee for approval;
• Once this has been done, the Ministry of Economy and Commerce will issue the required Ministerial licence specifying the activity to be practised by the foreign company;
• The branch or office should be entered in the Economic Department’s Commercial Register, and the required licence will be issued;
• The branch or office should also be entered in the Foreign Companies Register of the Ministry of Economy and Commerce;
• Finally the branch or office should be registered with the Dubai Chamber of Commerce and Industry.

Professional Firms

Professional firms are those which consist of professionals and practitioners and practice non-commercial activities. In setting up a professional firm, 100% foreign ownership, sole proprietorships or civil companies are permitted. The firms, which are registered as professional companies or firms may only practice specific activities and not extend that to any commercial business. These activities include the following services:

• Legal practice and consultancy
• Auditing, Organizing and keeping accounting records and books
• Civil engineering and architecture consultancies.
• Managerial and economic consultancies and studies
• Technical services
• Medical and curative services
• Educational services

Procedures for licensing the practice of the work:
a. The partnership agreement needs to be organised between the partners according to the applicable procedure
b. The agreement needs to be authenticated according to the law.
c. Apply to the Department of Economic Development in order to obtain the license that is specified on the relevant.
To select a desired business activity, please refer to the Standard Classification of Economic. Activities published by the Chamber and Department of Economic Development.
For more info, please contact us:

Kind Regards,

Vithul V Murali 
Al Zaeim Corporate Services 
Dubai Mobile : +971 50 55 73 538

Email  :Vithul@a2zconsultus.com

Skype : Vithul.murali