UAE Companies Information

JEBEL ALI (“JAFZA”)

Jebel Ali contains one of the world’s biggest shipping ports and is located just outside of Dubai and about
an hour’s drive from the capital city, Abu Dhabi. Jebel Ali Free Zone Authority (JAFZA), in conjunction with
the Dubai Government, introduced the offshore company in 2003. JAFZA offshore is regulated by the Jebel
Ali Free Zone Offshore Companies Regulations 2003 and is the most well-known of the UAE’s free zones
and the most popular UAE offshore jurisdiction.

Features:

• 100% Foreign Ownership is Allowed
Unlike the legislation governing companies incorporated in mainland Dubai, the JAFZA offshore company
regulations allow and require no local shareholding in a company.
• Local Real Estate Ownership
JAFZA offshore is the only offshore company that can directly own local Dubai real estate. Most properties
in Dubai can be owned by a JAFZA offshore but the approval of the free zone and the developer must be
sought first. Sovereign can assist with this.
• Local Banking
The company can hold a bank account in the UAE for the purpose of conducting routine operational
transactions and can also maintain professional relations with legal consultants, accountants and
management companies or other similar persons carrying out business within UAE.
• Inspection
The Registrar has the power to appoint inspectors to investigate the affairs of an offshore company. The
company owner may be liable to pay any charges related to such an inspection.
• Can Own Shares in Local Companies
Despite a general prohibition on offshore companies to conduct business with persons resident
in UAE, the authorities frequently allow offshore companies to hold shares in both offshore and
onshore UAE companies .

Characteristics of an offshore company registered in the JAFZ are as follows:

Shareholders

A minimum of one shareholder is required. Corporate shareholders are permitted though the company
documentation must be notarised and attested before it can be used for this purpose. Shareholders
decide the capital structure of the company. No minimum capital requirements have been stipulated.
Bearer shares are not permitted. A shareholders meeting should be conducted periodically (at least once
annually). The Register of Members shall be open for inspection by any member of the offshore company
and any other person.

Directors

A minimum of two directors is required and corporate directors are not permitted. Details of directors are
not available for public inspection.

Secretary

Every company must have a secretary. The client would normally act in this capacity.

Annual Reporting

Every company must keep accounting records, which must be kept for 10 years from the date on which they
were prepared. Accounts must be approved by the directors and signed by one of them. Every company
must appoint an Auditor (from an approved list) to examine and report on the accounts in accordance with
the regulations.

Timescale

Registration of the company in the Free Zone will take 3-4 weeks.

Restrictions on Name and Activity

Names must end with Limited. The following words, and their associated activities, cannot be used:
Assurance, Bank, Building Society, Chamber of Commerce, Chartered, Co-operative, Fund, Imperial,
Insurance, Municipal, Mutual Fund, Royal and Trust.

Local Requirements

As a matter of local company law the company MUST maintain a registered office address within the Free
Zone and appoint an approved registered agent (Sovereign are approved for this purpose). A registered
agent’s office in Dubai or in the Free Zone can also be used as the registered office. The shareholders of the
JAFZA company will have to travel to the free zone for signing of the M&As. Alternatively, they can issue a
power of attorney to us to act on their behalf.

International initiatives such as US FATCA, UK FATCA, Common Reporting Standards (CRS) and many others
have greatly increased the ongoing costs of compliance. As per industry standards, we will charge a
nominal fee of £100 or equivalent as shown towards the costs of compliance. Extra charges may be levied
where additional work is required.

OPTIONAL SERVICES

Directors

Most onshore countries have provisions within their tax legislation whereby any company, no matter where
it is incorporated which is managed or controlled from within their jurisdiction will be tax resident there and
taxable on its worldwide income at local rates. For example, any offshore company which had UK based
directors would be tax resident in the UK and subject to UK tax on its worldwide income. Failure by the
directors to declare the liability of the offshore company to UK tax would be an offence with potentially very
serious consequences. Most other onshore countries have similar provisions within their tax legislation so it
will rarely be advisable for onshore resident clients to act as the directors of an offshore company. To establish
an offshore tax residency for the company we can provide professional third party directors and in most cases
it is essential to take this service if tax savings are to be made. Our fees for the provision of management
services would be from US$2,500 per annum. If you require this service please tick the appropriate box in the
application form.

Bank Accounts

We can open bank accounts for the company in most places in the world and our fees for attending to the
account opening procedures would be from US$1,500 plus the costs of preparing any additional notarized
documentation which a particular bank may require.
Remailing, Fax, Tel. and Office Facilities

As part of the domiciliary services package we provide a registered office address in the jurisdiction of
the incorporation of your company in order to meet the local statutory requirement and included in our
management services, we permit the use of that address or your main admin office for mailing purposes.

However, many clients ask that we provide remailing and other office services out of one of our other Group
offices located in Hong Kong, London or elsewhere. When we receive mail we will re-package it into a plain
envelope and can arrange for it to be posted, according to your instructions, directly from the place of receipt
or via one of our onshore offices to ensure that correspondence is not received at your home address bearing
an offshore postmark and the name of your company. In this way confidentiality which would be lost if mail
was received directly can be maintained. Faxes, e-mails and telephone calls can be dealt with according to
agreement to further ensure confidentiality. Our fee for the provision of this service is US$500 per annum plus
handling charges (US$3 per item plus disbursements). If you require this service please the appropriate box in the
application form.

Dedicated Telephone Lines

For those companies which are particularly active or wish to have a higher profile we can arrange the
immediate allocation of a dedicated telephone line answered with the name of your company. Additional
costs apply to this service and details are available upon request.

Trust Services

Using a trust to own the shares of an offshore company can result in very substantial tax and non-tax related
advantages which will accrue both on death and during the lifetime of the trust settlor. These advantages
may be summarised as follows:-

(1) SAVING ON INHERITANCE TAX: On death, the inheritance tax which would normally be assessed on the
value of the shares would generally be eradicated.
(2) ASSET PROTECTION: Assets placed into trust are generally beyond the reach of creditors who might arise
as a result of financial difficulties, divorce proceedings, litigation etc.
(3) AVOIDANCE OF PROBATE: A trust provides a means whereby assets can be smoothly passed on to the next
generation without the disruption, delays, substantial costs, loss of confidentiality associated with the
probate procedure which necessarily follows when assets are bequeathed by will.
(4) CONTINUITY: Trusts provide a means whereby assets can continue to be administered in accordance with
the wishes of the settlor after his death so the weak can be protected from others and the spendthrift can
be protected from himself.
(5) LIFETIME TAX SAVINGS: During lifetime, substantial income and capital gains tax advantages may result
from setting up the trust.

Trust services can be provided by our licensed trust corporations in Gibraltar, Guernsey, the Isle of Man,
Singapore and the Turks & Caicos Islands through our various Group offices. Fees for drafting the trust deed
and for the provision of trustee services will be quoted on a case by case basis.