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JEBEL ALI FREE ZONE AUTHORITY ISSUES NEW REGULATIONS FOR OFFSHORE COMPANIES

JEBEL ALI FREE ZONE AUTHORITY ISSUES NEW REGULATIONS FOR OFFSHORE COMPANIES

18 Oct 2018
JEBEL ALI FREE ZONE AUTHORITY ISSUES NEW REGULATIONS FOR OFFSHORE COMPANIES

JEBEL ALI FREE ZONE AUTHORITY ISSUES NEW REGULATIONS FOR OFFSHORE COMPANIES
 
The Jebel Ali Free Zone Authority (JAFZA) has issued the Jebel Ali Free Zone Authority Offshore Companies Regulations (“the New Offshore Regulations”). 
 
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.
 
Once enforced, the New Offshore Regulations will repeal and replace the Jebel Ali Free Zone Authority Offshore Companies Regulations 2003 in its entirety 
 
The New Offshore Regulations is more investor friendly and provides additional opportunities for international investors to restructure their businesses in UAE. 
 
Some of the key features of the New Offshore Regulations are: 
 
Residence Visas- 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).
 
•Different Class of Shares- Members of the company can request the Registrar to divide the shares into different classes. This will allow the investors to have management control over the Offshore Company 
 
Minimum 1 Director- The mandatory requirement to have 2 directors to manage the affairs of the Offshore Company has now been changed. Only one director is required to be appointed and this could also be a corporate body
 
Clarification on permitted Activities- 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  
 
Resolution Majority clarified- Resolution has been defined as a resolution passed by 75% of the members voting in person or through proxy at a general meeting of which notice specifying the intention to propose the Resolution has been duly given. The old regulations required a simple majority. 
 
Re- domicile or Transfer – Foreign companies may redomicile as an Offshore Company to JAFZA OR Offshore Companies in JAFZA can now redomicile to a foreign country without having to set up a new company or branch. This Continuation of Incorporation process has been clarified in detail in the New Offshore Regulations. 
 
Conversion into a Free Zone Company- An Offshore Company may by a Resolution apply to the Registrar for its corporate form to be converted 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
 
Even as we wait for the guidelines to be released on these regulations it is important to state that the New Offshore Regulations are clearly based on international best practices and has been drafted to address markets needs and enable companies to operate smoothly
 
 
Being one of the top law firms in Dubai and a Registered Agent with the Jebel Ali Free Zone, James Berry & Associates have qualified and experienced lawyers in Dubai who can assist you with the interpretation of the Jebel Ali Free Zone Authority Offshore Companies Regulations
 
To know more contact Deepa - deepa@jamesberrylaw.ae 
 
This is a general commentary on the subject matter and should not be construed as specific legal advice.
 

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