Dubai offshore business entities are designed to meet the growing needs of investors and corporations within the region, as international investors search for new markets and consumer bases. As a result, despite the extent of the Dubai International Financial Center (DIFC), a complex housed on a 110 acre free zone offering a wide range of corporate services, expressions of interest to do business in Dubai flow in from hundreds of major financial institutions from across the globe.
Dubai does not consider itself a tax haven, and rather compares its corporate landscape and stature to that of Tokyo, New York, London and Hong Kong. As a rapidly emerging market, Dubai comfortably positions itself amongst other offshore jurisdictions which do not have the traditional offshore tax haven set up, in which all companies – domestic, foreign and non-resident or offshore compete on what is commonly referred to as a level playing field, as they operate under the same laws and, most importantly, the same fiscal regime.
The magnitude of the DIFC is such that the center was created to accelerate the demand for financial assets within the region, thereby being able to stimulate the repatriation of the $1 trillion in assets that are administered and invested in jurisdictions outside the region; increase the region’s capacity for insurance and reinsurance business due to the fact that around 65% of yearly premiums are reinsured outside the region; create a fund for pensions that would accommodate Islamic groups spanning over Western Europe and East Asia including USA; and help maneuver more than 90 regional privatization projects while assisting private companies with initial public offerings so as enable the market to become more liberal and deregulated.
In Dubai terms, zero taxation signifies no personal and corporate taxes pursuant to the Dubai Law No. 9, 2004. Dubai companies and entities that are registered in the DIFC enjoy these benefits for 50 years, and can continue to enjoy this tax treatment after that period has passed. DIFC companies are also excused from local as well as municipal authority levies and taxes. Sectors within the center include capital markets, reinsurance and captives, banking and brokerage, wealth management, ancillary services and Islamic finance. Licenses are issued to Dubai companies for ventures in these areas, there are no foreign exchange controls or restrictions on foreign ownership of Dubai companies and capital can be repatriated free from any charges. Foreign companies and entities registered, not incorporated (formed), in Dubai are known as Recognised Companies.
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