Starting from 1 January 2011, the Land Department in Dubai will only register properties in the name of offshore entities registered as such with Jebel Ali Free Zone Authority (JAFZA).
The Jebel Ali
Offshore Company (“JAOC”) is regulated in detail by Jebel Ali Free Zone
Authority Offshore Companies Regulations of 2003 (“JAOC-Regulations”). The JAOC
has some similarities with the offshore companies from other jurisdictions,
however there are also some substantial differences (e.g. no bearer shares
allowed, nominee shareholders and nominee directors are not accepted or
supported by the concerned authority, the shareholders shall personally signed
the incorporation documents).
The offshore companies have been created for the purpose of registering freehold property rights to real estate in some projects in Dubai (in particular, properties on the Palm Islands and other projects by Nakheel, Emaar and Dubai Properties) and consequently the offshore companies should not carry out any activity in the territory of the UAE. However, this does not exclude the offshore company’s right to be engaged in commercial activities outside the United Arab Emirates.
The Land Department issued a circular to prohibit offshore companies (except those incorporated in the Jebel Ali Free Zone) from owning properties in Dubai. The force of this circular is non-retrospective and will apply solely to new registrations for property ownership at the Land Department from 1 January 2011.
If an offshore company wishes to own property in Dubai, it must first incorporate an offshore company in the Jebel Ali Free Zone, which will become the registered owner of the property. When registering property in the name of the Jebel Ali Free Zone offshore company, the company will also be required to provide a separate formal undertaking to notify the Land Department of any change share ownership of the company.
Dubai real estate, which is currently registered with the Land Department and held by offshore companies, is not affected by the provisions of the circular; however, any request made after 1 January
2011 by such entities (excluding those incorporated in the Jebel Ali Free Zone) to register additional real estate with the Land Department will not be approved unless the company has established an offshore company in the Jebel Ali Free Zone.
There are the following differences between offshore companies in the Jebel Ali Free Zone from all other companies in the Jebel Ali Free Zone are:
The differences are summarised in the table below:
|Offshore companies in Jebel Ali Free Zone
|Other companies in Jebel Ali Free Zone
|Minimal capital required
|AED500,000 – AED1,000,000
|One or few shareholders/owners
|Minimal number of directors required to be appointed
|Office or industrial premises required
|The registration agent is a must
|License for business in Jebel Ali Free Zone (export, import, trading, manufacturing, etc)
|Certificate of Incorporation of an offshore company
|Different legal forms
|Provision of residence visas for shareholders/directors of the company
|Bank account in the UAE
In order to proceed with the registration, we will require the following documents:
Time frame for Incorporation of a JAOC:
From the date of application for registration of a JAOC (which may only be submitted once all the necessary information and documents are available) and the signature of the documents by the shareholders/attorneys it will take approximately 3-7 working days for the company to be duly registered. The presence of the shareholders and directors is obligatory unless the POA is provided.
The registration is completed once the following documents are received:
Cost of incorporation of offshore company
We charge a flat fee
of US$6,000 (Six Thousand US Dollars) for the registration of an
offshore company in JAFZA.
* Additional fees for the stamp of the company is US$100.
* Additional fees for the assistance in opening a bank account is $1,000.
Renewal fees are US$2500 (inclusive of JAFZA renewal fees and the agent’s annual fees). These fees are subject to change at any time. ThereisapenaltyofUS$35 permonth.
Should you wish to registeran offshore company in JAFZA, please contact my firm – Marina Fox Legal Consultancy - that is a duly licensed agent for registration of offshore companies in Jebel Ali Free Zone in Dubai.
© MarinaFox, 2011