How To Do Comparison Between Free Zone And Offshore Companies

There are couple of likenesses between Free Zone and Offshore companies in the UAE, be that as it may, every one of them are set up for totally extraordinary purposes. Before picking an organization compose or your business in UAE, it is essential to comprehend what are the distinctions, favorable circumstances and drawbacks of a Free Zone organization and an Offshore organization.

To name a portion of the similitudes, both sort of companies can be possessed completely (100%) by an ostracize without partner with a neighborhood accomplice (support), the companies are qualified for have a ledger in the UAE banks, and above all, the two companies are enlisted and authorized by Free Zone Authorities. All things considered, the are some significant contrasts between these two kinds companies.

A Dubai freezone company formation alludes to an organization enrolled in one of the Free Zones in the UAE to work business exercises inside the UAE or inside the locale. Free Zone implies an assigned tax exempt zone where 100% remote proprietorship is permitted, there is no traditions obligation for import and fare of products, there is no prerequisites to have a neighborhood accomplice or operator to build up a business and so forth.

Be that as it may, not at all like a Free Zone organization, an Offshore organization can’t work business exercises in the UAE straightforwardly, despite the fact that it is enlisted as a legitimate element with pertinent Free Zone experts in the UAE.

UAE Free Zone Companies

At first, Free Zones in the UAE were framed in light of ocean ports or airplane terminals and their motivation was to draw in speculators to work chiefly import-(re)export, assembling and exchanging organizations “through offering them different appealing business benefits, for example,

  • No tax assessment;
  • No traditions obligation for import/send out;
  • No necessity to connect with a neighborhood accomplice to setup an organization;
  • 100% remote possession;
  • Investors and the workers are qualified for getting UAE residency visas;

For example, the most established and biggest Free Zone of the UAE is Jebel Ali Free Zone (JAFZA), situated in Dubai, has been working since 1985 and alluring for working exchanging, import/send out and modern exercises.

Right now, there are around in excess of 20 distinctive free zones in Dubai itself offering business exercises in all divisions of economy. For instance, there is a Free Zone for human services suppliers (Dubai Healthcare City or DHCC); there is a Free Zone for instructive and preparing organizations (Knowledge Village); there is a Free Zone for media companies (Dubai Media City), there is a Free Zone for giving money related administrations (Dubai International Financial Center or DIFC) and numerous others. Each free zone has its own particular tenets and directions ; however essential motivating forces as specified above are the same in every Free Zone.

UAE Offshore Companies

Despite the fact that the enrollment of seaward companies is long existing practice in nations, for example, Monaco, Liechtenstein, Panama, and Hong Kong, the UAE began enlisting such companies. According to the Regulation 2003, the Jebel Ali Free Zone Authority was approved to enlist seaward companies in Dubai. Afterward, in 2007 two other Free Zones in Ras Al-Khaimah, for example, Ras Al-Khaimah Free Trade Zone (RAKFTZ) and Ras Al-Khaimah Investment Authority(RAKIA) were approved to enroll seaward companies. As it was specified before, UAE seaward companies are not qualified for work any business movement in the UAE straightforwardly. Be that as it may, an Offshore organization can be an investor of any UAE Mainland or potentially Free Zone companies, which empowers it to go into the UAE market and help out permitted business exercises through such auxiliary companies. Besides, by law an Offshore organization might not be considered as working together in the UAE, on the off chance that it:

  • utilizes legitimate, bookkeeping, evaluating, administration consultancy and comparative administrations of the individuals who are situated in the UAE;
  • plans and keeps up books and records inside the UAE;
  • holds gatherings of its executives or individuals inside the UAE;
  • leases a property to use as an enlisted office or possesses genuine property on any freehold zones, where non natives are permitted to claim a property;


In this way, despite the fact that Free Zone and Offshore companies share a few similitudes, they have diverse parts and purposes. Free Zone companies are utilized for working business in the UAE while having a physical nearness, while Offshore companies have just office address and enrollment in the UAE without being qualified for work business exercises specifically in the UAE. Also, investors and representatives of Free Zone companies are qualified for get UAE residency visa(s), while this isn’t the situation with Offshore companies. In any case, Offshore companies have its own particular favorable circumstances also, for example, qualification to claim land, less setting up costs and no necessity to rent an office. In this way, before picking a sort of organization for your business, it is critical to accurately comprehend what are the distinctions, focal points, drawbacks and reason for every one of them.

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