A UAE offshore company is a holding vehicle, not a trading licence. It can own shares, hold assets, own property in approved freehold areas and open a bank account, but it cannot carry on ordinary commercial activity inside the country, and it comes with no trade licence and no staff visa quota. Two registries issue them: RAK ICC in Ras Al Khaimah and Jafza Offshore in Dubai.
Their rules are less alike than most comparison pages suggest. One requires audited accounts every year and the other does not. One lets a property owning company apply for a residence visa for its members, and the other says nothing of the kind.
Key takeaways
- Jafza Regulation 14.1 bars an offshore company from directly carrying out commercial activity in the UAE, leasing UAE property outside one narrow exception, or running banking or insurance business.
- RAK ICC Regulation 40 is worded differently: full capacity, then a bar on business with persons in its own Zone without authorisation and on financial services anywhere in the world.
- RAK ICC’s fee schedule effective 1 January 2026 lists AED 3,250 to incorporate an IBC for a year and AED 3,950 to renew, before any registered agent charge.
- Jafza offshore accounts must be audited within six months of the period end under Regulation 60.4, with records kept ten years under Regulation 59.3.
- Dubai Land Department signed memorandums with RAK ICC and RAKEZ in July 2019 covering freehold registration, subject to a no objection letter and, in the base case, natural person shareholders.
- Economic substance reporting ended for financial years closing after 31 December 2022, and corporate tax registration replaced it as the live obligation.
What a UAE offshore company actually is
Start with the document you receive. Jafza says plainly that an offshore company is not issued with a business licence, only a certificate of incorporation, and that it cannot conduct commercial activity with persons within the UAE, in its guidance on starting an offshore business in Jebel Ali. No licence means no establishment card, no MOHRE file and no ordinary route to employment visas. Everything else follows from that.
RAK ICC is a corporate registry rather than a trading zone. Its products page lists companies limited by shares or by guarantee, restricted purposes companies, segregated portfolio companies, unlimited companies, intellectual property holding companies and the RAK ICC Foundation, with typical uses given as wealth preservation, asset protection, holding shares in UAE and international entities, and holding real estate.
Neither registry lets you walk in off the street. RAK ICC Regulation 92 requires a registered agent at all times, and Regulation 91 puts the registered office in the UAE, at the agent’s office where the agent has one, and forbids a post office box. Jafza Regulation 32.1 makes the agent mandatory too, with one exception that is easy to miss: it is optional for a company that maintains an office inside the Jebel Ali zone.
What the regulations allow, and what they block
The permitted list in Jafza Regulation 14.2 is precise. Outside the UAE, an offshore company may do any of the things restricted inside it. Here it may engage legal consultants, accountants and management companies, keep books and records, hold meetings, lease a registered office in an approved designated freehold area, own property in one of those areas, own a stake in another operating UAE company, and hold a UAE bank account.
RAK ICC Regulation 40 reaches a similar place by a different road. Subsection 1 grants full capacity to carry on any business. Subsection 5 bars business with persons in its Zone unless RAK ICC expressly authorises it, and bars financial services by way of business anywhere in the world, a definition that runs from deposit taking and lending to managing investments for others. Subsection 6 confirms that professional contact with lawyers, keeping books, holding meetings and running a bank account for routine transactions do not count as business in the Zone.
Subsection 8 settles most arguments. A RAK ICC company must not conduct activities in the UAE outside the Zone unless it has first obtained all appropriate licences from the competent authorities, and Jafza Regulation 14.3 says the same from the other direction. The structure is not invisible here. It cannot trade here without doing what any other company does to trade here.
| Point | RAK ICC | Jafza Offshore |
| Instrument issued | Certificate of incorporation, no trade licence | Certificate of incorporation, no trade licence |
| Registered agent | Mandatory at all times (Reg 92) | Mandatory, optional with an office in the zone (Reg 32.1) |
| Audited accounts | Not required by the 2018 Regulations | Required within six months of period end (Reg 60.4) |
| Record retention | Minutes and resolutions (Reg 107) | Accounting records for ten years (Reg 59.3) |
| UAE property | Through DLD arrangements, no objection certificate AED 1,250 | May own property in approved freehold areas (Reg 14.2) |
| Residence visa | Not provided for in the Regulations | Property owning company may apply for members (Reg 31.2) |
The practical effect is that an offshore company cannot invoice a UAE customer for work delivered here, and cannot rent an office and put staff in it. A consultancy billing a Dubai developer, a trader clearing goods through Jebel Ali for local sale, an agency serving clients in Business Bay: none of them fit. One issue we often see is a founder who signs a coworking contract in the company name, then finds the bank and the authority both read it as local activity the structure does not support.
Property, visas and the Dubai Land Department route
Property is where offshore structures earn their keep. Dubai Land Department signed memorandums of understanding with RAK ICC and RAKEZ in July 2019 for the registration of land and freehold properties on behalf of free zone companies.
The conditions are worth reading twice. DLD will accept registration of freehold plots, properties or any right in rem subject to the required documents, registration fees and a no objection letter, as long as the company is registered with RAK ICC or RAKEZ and the shareholders are natural persons. DLD may also approve registration where the owners are juristic persons or a mix of the two, so a corporate shareholder turns a standard filing into an approval you have to ask for. RAK ICC prices a no objection certificate per property at AED 1,250.
The visa position is the most misquoted item in this subject. A bare offshore company gives you no residence visa, because there is no licence and no establishment card behind it. Jafza Regulation 31.2 is the exception and it is narrow: a company that owns property in a designated freehold area may apply to the Authority for a residency visa for its members, subject to the Authority’s eligibility requirements. That is an application tied to property, not a visa quota attached to a company.
What it costs to keep one alive
RAK ICC publishes its numbers, which makes budgeting possible. From the fee schedule effective 1 January 2026, incorporating an IBC costs AED 3,250 for one year or AED 9,600 for three, and renewal costs AED 3,950 or AED 10,650 on the same terms. A foundation registers for AED 1,500 with an annual licence of AED 750, a certificate of good standing is AED 750, and voluntary strike off is AED 1,500. Beyond three shareholders or directors, add AED 200 per individual and AED 400 per corporate entity, and companies that need enhanced due diligence pay a differential price of AED 7,000 on top of the IBC fee.
Missing a renewal has a published timetable rather than a vague warning. One month of grace runs from expiry, then renewal costs the normal fee plus 10 per cent in the second month, rising to 50 per cent by the fifth, with a strike off notice at the start of the sixth month and formal strike off at six months. Restoration needs the Registrar’s approval, all arrears and a flat AED 550. Registered agent fees sit on top of every figure above and neither registry publishes them, so ask for the agent’s annual fee in writing, separated from the registry fee, before you sign.
Corporate tax, and what replaced economic substance
An offshore company incorporated here is a juridical person incorporated in the State, which puts it inside the corporate tax system whether or not it earns anything. Federal Tax Authority Decision No. 3 of 2024, effective 1 March 2024, requires a resident juridical person incorporated on or after that date, including a free zone person, to register within three months of incorporation. The Ministry of Finance confirmed on 27 February 2024 that Cabinet Decision No. 10 of 2024 imposes an AED 10,000 penalty for late registration.
Whether the 0 per cent free zone rate is available is a separate question with no automatic answer. The FTA’s Free Zone Persons guide of May 2024 defines a free zone as a designated and defined geographic area within the UAE specified in a Cabinet decision, and a free zone person as a juridical person registered in one. A registry that is not a designated geographic area is a different thing in that definition, so confirm the classification of your entity with the FTA or a tax adviser rather than with a formation brochure. Qualifying status also brings conditions many holding companies never meet, including audited financial statements and a cap on non qualifying revenue at the lower of AED 5,000,000 or 5 per cent of total revenue.
Small Business Relief runs on a different track. Ministerial Decision No. 73 of 2023 sets the threshold at AED 3,000,000 of revenue and blocks multinational group members and qualifying free zone persons from electing for it, and the Ministry of Finance announced on 7 August 2026 that Ministerial Decision No. 131 extends the relief to tax periods ending on or before 31 December 2029.
Economic substance filings, the item that dominated offshore structuring from 2019, are largely finished. The Ministry of Finance announced the cancellation of reporting for financial years ending after 31 December 2022 under Cabinet Decision No. 98 of 2024. Obligations for 2019 to 2022 remain, including responding to information requests and paying penalties already imposed, and our corporate tax team sees that history surface during bank reviews.
Accounts and audit split the two registries
Jafza requires real accounting. Regulation 58.1 calls for records sufficient to show and explain transactions and disclose the financial position with reasonable accuracy at any time. Regulation 59.3 keeps them for ten years, and 59.2 lets the Registrar ask for them. Regulation 60.1 has directors prepare accounts for a period of no more than 18 months, and 60.4 requires them to be examined and reported on by auditors within six months of the period end, then laid before a general meeting.
RAK ICC is lighter. Regulation 107 requires minutes of meetings and copies of resolutions, with a fine up to level 3 for wilful failure, and the Regulations impose no annual audit filed with the registry. That gap is not permission to keep no books. Corporate tax filings, bank reviews and any free zone claim all assume a set of accounts exists, so a company that keeps none creates the work later at a worse moment. Budget for bookkeeping either way, and for an audit if you go to Jafza.
When an offshore company is the wrong structure
If the plan involves UAE customers, staff or a residence visa for the founder, a free zone or mainland company is the right starting point. A Dubai marketing agency, a clinic, a brokerage and an e-commerce seller shipping within the UAE all need a licence the offshore registries do not issue. Compare the operating forms in our guide to sole establishment, LLC and FZE structures.
Banking is the second reality check. Both rulebooks allow a UAE account, but opening one takes a compliance team through the ownership chain, the source of funds and the reason an entity with no local operations needs a local account. Several corporate layers or a trust in the chain add time, and some applications fail. RAK ICC’s enhanced due diligence pricing signals the same thing on the registry side.
Where offshore does work is narrower and duller than the marketing suggests: holding shares in operating companies, owning intellectual property, holding approved freehold property, ring fencing assets in a segregated portfolio company, or sitting above a free zone entity that trades and sponsors the visas. For that operating layer, our pages for Jafza and RAKEZ set out what the licences cover.
