A black list of offshore and the UAE

A black list of offshore and the UAE

If businessman needs to open an offshore company, he should understand that many countries are on the black list, and there will be no business trust to companies in these listed countries. An offshore is essentially a company that does not conduct business in the country but executes transactions with companies abroad. Such a company is created in a country with low or preferential taxation system.

Due to the fact, that offshore companies were usually used for tax evasion, the EU countries in 2017 created a black list of countries with offshore companies in which it is forbidden to conduct business activities. The blacklist of offshore countries includes countries where there are no taxes (or the tax rate is minimal), there is no obligation to provide information about the beneficiaries or shareholders of the company, and to report on financial transactions.

In 2019, the composition of the blacklist was revised due to the fact, that many countries adopted reforms and reorganized the system of regulation and reporting of commercial processes in accordance with the requirements of the EU countries. The United Arab Emirates, Marshall Islands and Dominican were excluded from the blacklist. The offshore zones of these countries have tightened the requirements for business transparency.

Many countries have also committed to review transparency in the exchange of information, but not all of these obligations have been met. Therefore, such countries as the US Virgin Islands, American Samoa and Vanuatu, Fiji, Guam, Belize, Trinidad, as well as Oman and Tobago remain on the black list.

Also, the list of countries from the “gray” list of offshore companies was revised. Switzerland, Albania, Serbia, Costa Rica and Mauritius were excluded from it.

It is worth noting that, unlike many other countries, the UAE retained a complete absence of income tax on the profits of individuals and legal entities. This factor increases the attractiveness of the UAE for investors and businessmen from around the world.