Setting up offshore firm in UAE is more economical

• There are four offshore jurisdictions in the UAE, viz. Jebel Ali Free Zone, RAK Free Trade zone, RAKIA and Ajman Free Zone.

Q: I am a GCC country national. I have been in touch with some parties in Europe who want to buy different kinds of items. Such items will be mostly sourced from China and directly shipped to the customer and goods will not touch UAE. I am interested in a company setup with minimum costs whereby I can open a bank account in UAE. As I shall be mostly travelling and do not intend to employ anybody at the moment, office and residence visas are also not required. Kindly let me know your views. AB, Bahrain

A: I gather from your query that you do not require a physical office or visa in the UAE. As you do not intend to do any business in the UAE perhaps a UAE offshore company would be an option as it is more economical and you can open a bank account in the UAE. There are four offshore jurisdictions in the UAE, viz. Jebel Ali Free Zone, RAK Free Trade zone, RAKIA and Ajman Free Zone. Costs and requirements will differ based on the jurisdiction you choose. Bear in mind that business is not permitted in the UAE for such offshore companies and they need to be renewed every year. Offshore companies are suitable for international business and even ownership of property in the UAE and overseas.

Q: I am a person employed by a company in UAE though would like to engage in trading of building materials. I have been informed that UAE free zones allow 100 per cent foreign ownership. Most of my potential customers would be outside the free zone area. Will a free zone company suit me? SJ, Dubai

A: Free zones in UAE do allow 100 per cent foreign ownership. As you are on employed in a UAE company most free zones would need a no objection letter from your sponsor to be an owner in the free zone company. Some free zones also insist that the manager of the said company should hold the free zone visa. As a free zone entity you can import and export the trading items you are licensed for though UAE free zones stipulate that sales in the UAE mainland can be done through an appointed agent after payment of the relevant import duties in the UAE. You can have more than one agent in the mainland to sell your goods. There are several free zones in the Emirates; costs, procedures and facilities differ from free zone to free zone. You may choose the free zone as per your requirements and budget.

Q: I have a small trading business in Dubai and I have employed four persons to assist me in the company. Business has grown over the years. During the last four years I have been unable to take a leave or vacation as I am the sole authorised signatory of my company and am not sure if my employees are trustworthy. I need to find a solution, please guide. SV, Dubai

A: Delegation and proper internal controls are the keys to your predicament. As the business grows it is beyond the means of one person to handle all aspects of the same. The fundamental of internal control within any small, medium or large organisation is that that each task should involve more than one person to complete whereby work of one is overlooked/supervised by the other. As more than one person will be required to conclude a task the chances of fraud and error are reduced substantially. To start with, make a proper authorisation system for major tasks like sales, purchases, cash, etc for your staff which will bring relief to you as an owner and you may utilize your skills in the growth of the business. You may seek professional help to design an internal control system if desired.

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The writer is partner at Crowe Horwath, UAE. You can send your business queries to him at atik.munshi@crowehorwath.ae