Restrictions on the types of activities of offshore companies

15 / 07 / 2020

In this article we will consider the limitations and exceptions to the rules that entrepreneurs may encounter during opening an offshore company.

What types of activities are prohibited for offshore companies in the UAE?

All these areas of activity are officially prohibited by regulatory authorities and the commercial Law. The list of areas: insurance, advertising, banking and financial, consulting, professional services, games and bets, publishing, as well as intellectual property, real estate, education, etc. This list can be updated by the Governing Authorities; therefore, we recommend that you study the current list of prohibited areas of activity before opening an offshore company in the UAE.

Prohibited business locations:

The same Regulation stipulates that offshore companies do not have the right to conduct their activities on the territory of the Free Economic Zones, as well as within the territories outside the FEZ of the United Arab Emirates, including Dubai.

Real estate ownership.

An offshore company does not have the right to own real estate in the territory of the United Arab Emirates, but there are exceptions to this clause in the number of places where such an opportunity exists. Such places exist both in Dubai and throughout the UAE.

Getting residency.

One of the main restrictions for investors and entrepreneurs in the UAE, having or wanting to open an offshore company, is the inability to obtain a residence permit in the United Arab Emirates.

List of exceptions to the rules:

    ● What real estate can offshore companies own?

There is a list of exceptions for the acquisition and rental of real estate by an offshore company. For example, offshore companies are allowed to rent and own property owned by Nakheel Company LLC or real estate in Jumeirah Island and Palm Islands. The list of places is constantly updated by the Governing Authority of the JAFZA Free Economic Zone, and offshore companies have the opportunity to own any property approved by JAFZA.

    ● Bank account;

Both local and offshore companies can open an account and use it in the UAE.

    ● Activities of the company in the UAE;

To conduct trade or other activities of an offshore company in the UAE, you must obtain the appropriate license from the relevant authorities. This exception makes it possible to open a branch or subsidiary within the UAE. Further, the company will be able to conduct business in the local market of the United Arab Emirates, adhering to mandatory regulations.

As we see, there are no strict restrictions for offshore companies, you can always find an alternative to implement everything you need. The main thing is to act according to the rules and norms of the law.