The Jebel Ali Offshore Company is registered within the Jebel Ali Free Zone (JAFZA).

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1 Jebel Ali Offshore Company (UAE Offshore Company) Overview The Jebel Ali Offshore Company is registered within the Jebel Ali Free Zone (JAFZA). JAFZA is a Dubai based government-owned free zone that was established in It is one of the oldest and most prominent free zones in the UAE and claims to rank among the world s largest and fastest growing free zones. JAFZA is situated next to the Jebel Ali Port (the largest port in the Middle East) and was established to help facilitate Dubai s role as an international trading and business hub serving the surrounding region. Jebel Ali Offshore Company (JAFZA Offshore) A JAFZA Offshore can be 100% owned by foreign nationals/corporates. There are no UAE ownership requirements. JAFZA Offshore was established in 2003 primarily to offer a locally controlled UAE property holding vehicle as an alternative to the traditional foreign offshore companies such as the BVI. Currently the JAFZA Offshore is the only type of offshore company allowed to directly own mainland Dubai property as per a Dubai Land Department (DLD) ruling. Additional DLD approvals are required to register property in a JAFZA Offshore that is not owned directly by individual shareholders. Please contact your Minerva representative for further details. JAFZA Offshore can also be used for international trading but they are prohibited from trading with UAE based companies and individuals. The UAE s status as a high growth and increasingly diversified economy as well as a traditional trading hub should help give JAFZA Offshore companies commercial credibility in international trade and services and regional investments. JAFZA Offshore is significantly more expensive to set up when compared to the Ras Al Khaimah International Company (RAKIC), the alternative UAE offshore company. In addition, JAFZA has specified a larger number of prohibited international activities (please see the list below within the key features section).

2 A practical disadvantage of the JAFZA Offshore over the RAKIC is that JAFZA require the shareholder(s) to be physically present in the free zone to sign the incorporation papers. If this is not possible they must issue a Power of Attorney (POA) to another individual to attend and sign in their absence. The POA must be legalised which can be time consuming and expensive. Key features of a JAFZA Offshore Legal JAFZA Offshore Companies are governed by the JAFZA Offshore Companies Regulations 2003 and the Dubai Courts. Unlike the RAKIC, JAFZA does not allow shareholders to opt for the international law of their choice to decide succession matters. These matters will be governed by the JAFZA Offshore Companies Regulations There are no public disclosure requirements. There are no exchange controls. Taxation JAFZA Offshore Companies are not subject to any corporate/capital gains taxes within the UAE further to a 50 year renewable concession. They cannot avail of a Tax Residency Certificate from the UAE Ministry of Finance; hence it is unlikely that any benefit can be obtained from the UAE s extensive network of double taxation treaties. Permitted activity A JAFZA Offshore is prohibited from trading with UAE based companies and individuals. In addition, JAFZA is required to approve the intended international activity of the company. As per a circular from JAFZA in May 2007, the following activities are prohibited: - Banking

3 - Insurance - Financial - Professional Services - Consulting - Intellectual Property - Media - Security - Publishing - Advertising - Movie Production - Gambling - Casino - Game & Win - Advisory - Real Estate Business (excludes personal investment) - Military - Education A JAFZA Offshore Company can own shares in other companies including UAE companies. Company requirements They can be formed with a minimum of one shareholder (individual or corporate). A minimum of two natural persons are required to act as directors of the company. There are no requirements for UAE resident directors. There is no minimum capital requirement. The capital structure can be decided by the shareholders. Shares must be fully paid and allotted. Different classes of shares are not permitted. Bearer shares are not permitted. Company names must end in Limited/Ltd. A JAFZA Offshore is not required (nor allowed) to rent a dedicated office in the UAE. They must appoint a UAE based approved registered agent who will provide the registered office address.

4 A general meeting must be held at least every 18 months. Minutes of the meetings must be maintained in the registered office. Companies must produce annual accounts which need to be audited within six months from the end of the financial year although submission of audited accounts is currently not being enforced. No UAE residence visas will be allocated with a JAFZA Offshore. Formation procedures and documentary requirements The shareholder(s) is required to be present in the JAFZA offices at the time of incorporation to sign the incorporation documents. If the shareholder does not wish to travel to the UAE they can issue a POA to an individual to sign on their behalf. The POA must be notarized and attested in the shareholders home country. JAFZA requires the following documents from the shareholder(s) and directors to establish the offshore company: o Individual owner/directors: - Brief Resume/C.V. (suggested format can be provided on request) - Passport copy - Standard bank reference - Proof of residence (e.g. utility bill) - Power of Attorney (N&A*) if the individual shareholder(s) does not intend to be present in UAE to sign incorporation documents (suggested format can be provided on request) o Corporate owner: - Certificate of Incorporation (N&A*) - Certificate of Incumbency (N&A*) - Memorandum & Articles (N&A*) - Board resolution calling for the establishment of the offshore company (N&A*) (suggested format can be provided on request) The Registry reserves the right to ask for additional documents if necessary.

5 (N&A*) = Notarised in the home country and then Attested by the UAE Embassy/ Consulate or any Arabic Embassies/Consulates in the home country. Note: To keep costs down it is advisable to have all documents bound and N&A as one set. The approximate cost to N&A one set of documents for company set is US$ 1,350. The above does not include our due diligence and client take on forms. Details of these can be provided separately. Subject to the required information being received a JAFZA Offshore Company can be set up within ten working days. JAFZA Offshore fees Our standard fee schedule for formation and management of JAFZA Offshore companies can be provided separately. This note is intended to provide a brief rather than a comprehensive guide to the subject under consideration. It does not purport to give legal or financial advice that may be acted or relied upon. Specific professional advice should always be taken in respect of any individual matter.