For investors from all around the globe, UAE offshore businesses have continued to provide a productive and prosperous environment to do business. Despite this, many people connect offshore businesses with shady practises such as money laundering and asset concealment.
Assumptions hold that offshore company formations are mostly performed in order to conceal illegal funds and assets. The UAE government, on the other hand, takes rigorous measures to eliminate any such operations that have been identified by the relevant offshore authorities.
For this reason, the UAE government has established a ‘Financial Action Task Force’ to address the problem. The Federal National Council directs the work of the ‘Financial Action Task Force,’ which is a government entity. They are involved in the fight against money laundering and terrorist funding. The committee aims to establish a clean and uncorrupt economic environment in the UAE, which has harsh fines and lengthy prison sentences.
Here are some common misconceptions about offshore company creation in the United Arab Emirates:
Tax evasion is a myth, according to experts.
Fact – It is a misconception that you may avoid taxes by forming an offshore corporation, which is completely untrue! There is no question that forming an offshore corporation may be advantageous in terms of taxation. Tax evasion is possible via the establishment of an offshore company in the United Arab Emirates. As a result, it lowers your total tax liability, which is encouraged by the law. Tax evasion and tax avoidance, on the other hand, are two very different things! It is technically unlawful to engage in tax evasion, which is defined as failing to pay what should be paid in accordance with applicable laws.
It is an unfounded myth with additional risks.
Fact – There is a widespread belief that offshore corporations are unlawful. Risk is seen as a negative attribute by business owners all over the world when establishing a company or obtaining a commercial bank account. The reality is that every jurisdiction that provides offshore company registration in the United Arab Emirates is governed by a regulatory body. The offshore authority is the only entity responsible for guiding and controlling businesses operating inside the jurisdiction. In addition, the authority guarantees that all legal, privacy, and security advantages are provided at all times!
Myth: It is expensive to start a business.
Fact – Establishing an offshore company is one of the most expedient methods of establishing a UAE business. This leads some individuals to believe that forming an offshore corporation will be an expensive endeavour. The truth of the matter is that offshore corporations are not only cost-effective, but they also provide an inexpensive option for starting a company in the United Arab Emirates.
Myth: There is no government or law.
Fact – Offshore corporations do offer confidentiality, ownership privacy, and transaction secrecy, all of which are important considerations. However, it is not true that offshore businesses in the United Arab Emirates lack governance or are not subject to the law. Offshore jurisdictions in the United Arab Emirates have its own authority structure, as well as separate directive laws, to guarantee that all transactions are transparent.