Offshore vs. Onshore Company Formation in the UAE: A Complete Guide for 2025
The United Arab Emirates has become one of the world’s most preferred destinations for entrepreneurs, NRIs, and global investors looking to establish a business. With its world-class infrastructure, strategic location, tax benefits, and ease of doing business, the UAE offers multiple pathways for company formation—primarily Offshore and Onshore.
But what’s the difference between them? Which is better for your business model? And how do you actually get started?
This guide breaks it down clearly and helps you choose the right structure.
What Is an Offshore Company in the UAE?
An offshore company is a legal entity registered in the UAE that is permitted to conduct business outside the UAE. It is ideal for international trade, asset protection, holding companies, and global consulting.
Key Features of Offshore Companies
- Cannot do business within the UAE mainland
- Zero corporate and personal tax
- 100% foreign ownership
- No requirement for office space or physical presence
- Quick incorporation (1–2 business days)
- High level of privacy and confidentiality
- Cost-effective setup
Popular Offshore Jurisdictions
- JAFZA Offshore (Jebel Ali)
- RAK ICC (Ras Al Khaimah International Corporate Centre)
- Ajman Offshore
What Is an Onshore Company in the UAE?
An onshore company is a business registered to operate within the UAE, including the local market. This includes Mainland and Free Zone entities.
Key Features of Onshore Companies
- Can do business inside and outside the UAE
- 100% foreign ownership allowed in most sectors
- Physical office space required (mainland)
- Visa eligibility for investors and employees
- Build presence in the UAE market
- Access to government contracts (mainland)
Types of Onshore Companies
1. Mainland Company
- Licensed by the Department of Economic Development (DED)
- No restriction on business within the UAE
- Full access to the UAE market
2. Free Zone Company
- Ideal for international business + tax benefits
- 100% ownership
- No corporate tax for qualifying activities
- Some restrictions on selling directly to the UAE mainland
Offshore vs. Onshore UAE Company Formation: Side-by-Side Comparison
| Feature | Offshore Company | Onshore Company (Mainland / Free Zone) |
|---|---|---|
| Market Access | International only | UAE + International |
| Ownership | 100% | 100% |
| Corporate Tax | Mostly exempt | Applicable depending on activity (9% above AED 375,000) |
| Office Space | Not required | Required (except some Free Zones) |
| Visa Eligibility | Not eligible | Eligible |
| Cost | Very economical | Moderate to high |
| Privacy | High | Moderate |
| Best For | Holding, trading, consulting, asset protection | Retail, services, e-commerce, contracting, global operations |
Which One Should You Choose?
Choose Offshore if you:
- Want an international trading or consulting structure
- Need a holding company for global assets
- Want a cost-effective company without visa needs
- Prefer strong confidentiality
Choose Onshore (Mainland / Free Zone) if you:
- Want to sell products/services within the UAE
- Need visas for staff or family
- Want to open a physical office
- Are you planning to participate in government tenders
- Want long-term presence in the UAE market
Benefits of Setting Up a Company in the UAE (Both Models)
Strategic location between Asia, Europe, and Africa, expand and scale your business with confidence and clarity.
** Zero income tax** on personal earnings
Highly stable economy
Strong global connectivity
100% repatriation of profits
World-class banking and infrastructure
Business-friendly regulations
Explore Options