The Jebel Ali Free Zone Authority (“JAFZA”) issued a new Companies Regulation pertaining to offshore companies (“New Regulations”), which repeals and replaces the JAFZA Offshore Companies Regulations 2003. Whilst the set enforcement date is not yet announced, JAFZA have already verbally confirmed that a specific date will be announced shortly. The New Regulations provide foreign investors new ways to structure their investments in the UAE, mitigating against potential risks of carrying out business in the UAE, whilst also granting them additional announced privileges to help attract foreign investment and ensure stability.
- Residence visas. An Offshore Company, which owns a property in a designated freehold area in the UAE can now apply to JAFZA for residency visas for its members (such as directors and shareholders).
- Increased permitted activities. An Offshore Company can now own a property in any of the designated freehold areas in the UAE as well as use the property as its registered office. The Offshore Company can also own a stake in another operating company onshore in the UAE.
- Conversion and redomiciliation. Subject to conditions, a foreign company may re-domicileas a JAFZA Offshore Company. Offshore Companies in JAFZA can now also re-domicile to a foreign country. This ability to re-domicile simplifies the transition for a foreign company to the JAFZA as it no longer requires the establishment of a branch or new company.
- Multiple share classes. An Offshore Company can now create different classes of shares giving the company the ability to allocate different voting rights or rights to dividends Amongst shareholders.
- Streamlined director requirements. The director requirements for an Offshore Company have now decreased from a minimum of two directors to a minimum of one director. The director is no longer required to be a natural person and can now be a body corporate entity (subject to the approval of JAFZA)
- Resolution requirements. A minimum percentage of shareholders required to pass any resolution is now 75%, increased from the previous requirement of a simple majority.