UAE (free zone) vs UAE (RAK ICC offshore)
The UAE (RAK ICC offshore) is £1,640 cheaper in year 1 and £400 a year cheaper after that.
| UAE (free zone)Free zone LLC / FZCO | UAE (RAK ICC offshore)RAK ICC company | |
|---|---|---|
| Costs | ||
| Minimum, year 1 | £2,800 | £1,160 |
| Minimum, per year after | £1,500 | £1,100 |
| Typical year 1 | £5,375 | £1,878 |
| Government fee | £2,500AED 6,000 to 25,000 licence (renewed yearly) | £655AED 3,250 registry fee for one year |
| Indirect setup | £300–2,350 | £505–1,940 |
| Running per year | £1,500–8,850 | £1,100–1,810 |
| Share capital | Usually none | None |
| Rules | ||
| Directors | No local director | No local director |
| Remote setup | Visit neededThe licence can be done remotely. The visa and bank account usually need a visit. | Through a providerFully remote through a registered agent. |
| Audit | Audit needed for 0% free zone tax | No audit for most companies |
| Time to form | 1 to 3 weeks | About 1 week |
| Ease for foreign owners | 4/5 | 4/5 |
| Tax and banking | ||
| Corporation tax | 0% / 9%0% on qualifying free zone income, 9% on other profit above AED 375k. | 0% / 9%0% up to AED 375k profit, 9% above. It must register for UAE corporate tax and file a return. |
| Dividend withholding | None | None |
| VAT / GST | 5% | None |
| Banking | 2/5UAE banks usually want a residence visa and a visit. | 1/5UAE banks rarely open accounts for offshore companies. |
| All company setup fees in the UAE (free zone) | All company setup fees in the UAE (RAK ICC offshore) | |
Questions
Is the UAE (free zone) cheaper than the UAE (RAK ICC offshore) for company setup?
No. The UAE (RAK ICC offshore) is cheaper, at least £1,160 in year 1 against £2,800 for the UAE (free zone).
Which is cheaper to run each year?
The UAE (RAK ICC offshore), at least £1,100 a year against £1,500 for the UAE (free zone).
Which needs a local director?
Neither. You can run a company in either without a local director.
Which is faster to set up?
The UAE (RAK ICC offshore), in about 1 week. The UAE (free zone) takes 1 to 3 weeks.
How does corporation tax compare?
The UAE (free zone): 0% on qualifying free zone income, 9% on other profit above AED 375k. The UAE (RAK ICC offshore): 0% up to AED 375k profit, 9% above. It must register for UAE corporate tax and file a return.
Sources: PwC · The Tax Lead · VJM Global · Binderr · Noble Core · UAE Free Zone Finder