Dubai based JAFZA offshore company is an appropriate and most commonly preferred SPV/SPC for the purpose of owning/holding Dubai free hold properties.
JAFZA Offshore jurisdiction over the years has evolved as the most popular jurisdiction to own Dubai freehold properties in UAE. JAFZA offshore company is the only offshore company permitted by the Dubai Land Department to own property in designated freehold areas, making it the most common corporate property ownership vehicle for foreign individuals or legal entities. Recently, the free zone authority has introduced new Offshore Company regulations which is more flexible and investor friendly. The exact enforcement date is yet to be announced but we believe that an updated version of the New Offshore Regulations with the date shall be available soon.
SALIENT FEATURES OF NEW JEBEL ALI OFFSHORE COMPANIES REGULATIONS 2018.
The Jebel Ali Free Zone Offshore Companies Regulations 2018 repeals and replaces the Jebel Ali Free Zone Offshore Companies Regulations 2003 in its entirety. The New Offshore Regulations is more investor friendly and provides additional opportunities for the international investors to restructure their businesses in UAE. The JAFZA Offshore companies are allowed to hold shares in free zone and onshore companies to make the business easier within Middle East and outside UAE.
An Offshore company that owns property in one of the designated freehold areas can apply to JAFZA for residence visa for its members (Shareholder and/or Director).
CLASS OF SHARES
The new regulation has introduced the provision to create different class of shares and thereby give provision to the investors to have management control over the offshore company.
Regulation 32.1 of new Offshore company regulation 2018 read as ''An Offshore Company shall at all times have a Registered Agent. This requirement is optional for Offshore Companies that maintain an office in the Zone''.
The regulation 30(1) of the new offshore company regulation 2018 envisages that an offshore company shall at all times have a registered office which must be an office maintained in the Zone by the company or an office maintained in the Zone or in Dubai by its registered agent to which all communications and notices may be addressed. According to the New Offshore Regulations an Offshore Company is also permitted to hold a lease of property for use as its registered office in any of the designated free hold area in the UAE, own a stake in another operating company within the UAE and also own property in one of the designated freehold areas.
NUMBER OF DIRECTORS
As per the new offshore regulation, the company affairs can be managed with one director and this could be a corporate body. The Regulation 33.1 of new JAFZA Offshore Company regulation read as ''Subject to any limitations in the articles of association, the business and affairs of an Offshore Company shall be managed by at least one Director.''
REQUIRED MAJORITY IN PASSING RESOLUTIONS
Unlike in the repealed JAFZA Offshore Company Regulation 2003, the new regulation calls for a 75% of the members voting in person or through proxy at a general meeting of which statutory notice specifying the purpose of the resolution has to be circulated among the members.
RE- DOMICILE OR TRANSFER OF INCORPORATIONS
Regulation 111 & 116 of the new JAFZA Offshore Company 2018 allows the companies to re-domicile or transfer to this jurisdiction if authorized by the laws of the jurisdiction in which it was incorporated. A JAFZA Offshore Company may with a resolution and with the approval of Registrar of Offshore companies apply to the to the appropriate official or public body of a foreign jurisdiction to transfer its incorporation to the foreign jurisdiction and request that the Offshore Company be continued as a foreign company
PROHIBITION OF LOANS TO DIRECTORS
New JAFZA Offshore regulation strictly prohibit providing loan to a Director or to enter into any guarantee or provide any security in connection with a loan made to a Director without the consent of members holding not less than 90% in normal value of the shares giving a right to attend and vote at any meeting of members.
TRANSFORMATION OF OFFSHORE COMPANY TO ONSHORE FREE ZONE COMPANY.
An Offshore Company may by a Resolution apply to the Registrar to change its corporate form to be transformed to a Free Zone Company in the Jebel Ali Free Zone. The date of incorporation of the Free Zone Company will be that of the Offshore Company and all rights and obligations of the Offshore Company shall continue with the Free Zone Company
This is a general commentary on the subject matter and should not be construed as specific legal advice.
We are happy to offer our expertise on setting up Offshore Company, Free Zone Company, Onshore Company (Limited Liability Company & Professional License Company), Branch Company, Representative Company, Re-domiciliation of Companies in UAE. Our in house legal team can assist you in drafting the board resolution, Local service agent agreement and other vital documents. We recommend you to avail an obligation free consultation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.