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How and why did we set up a JAFZA Offshore holding company for our financial securities Client? - YouTube
Channel: unknown
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Hello everyone! My name is Chloe Tan and I'm聽
the Website Content Writer at Healy Consultants
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based in Singapore. So today I'm聽
here with my co-worker Apurv Trivedi.聽聽
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He's one of our Client Relationship Officers in聽
our Dubai office. He's going to talk about a JAFZA
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offshore engagement he's currently on. Hi Apurv!聽
How are you? Hi Chloe I'm fine. How are you doing?
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Good! Good! So could you give me a聽
brief summary about this engagement?
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What sort of business is the Client in and What聽
was some of the goals they wanted us to meet?聽聽
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Sure! So this engagement again is
you know is is very interesting for us because聽聽
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the Client initially came to us and they wanted聽
to set up a financial advisory business. When I聽聽
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say financial advisory they wanted to get into聽
securities and commodities and different asset聽聽
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groups and provide dealer advice around that.聽
So you know that was the business that they聽聽
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wanted to set up and we were advising聽
them where they can set it up聽in UAE.
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And then eventually they told us that they were聽
going to be three partners while setting it up.
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With one local UAE national. And the Client had聽
a few concerns because they did not know the UAE聽聽
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national and it was introduced by a third party to聽
them and you know there were some concerns about聽聽
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their participation in the business and how聽
they can insulate the business activity from聽聽
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their personal liability. And they wanted us聽
to kind of put together a holding structure聽聽
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for them that insulates them also in terms聽
of risk and also optimizes you know their聽聽
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business structure going forward given they聽
wanted to expand their securities businesses聽聽
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in in different jurisdictions moving forward as聽
well. So that was the initial conversation that聽聽
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we had with the Client. We had a set of you聽
know two to three different meetings where we
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gave them our recommendations on what would be聽
an ideal structure for them and understanding聽聽
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Client's pain points, you know what are the key聽
concern areas for them. Eventually we settled on聽聽
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a JAFZA offshore holding company. You know that's聽
the structure that we we're setting up right now聽聽
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before we get into setting up their securities聽
business moving forward, so that's the one that聽聽
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we're doing right now. Okay. Just one question聽
like what is like the full name for JAFZA?
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So a JAFZA is actually one of the聽
free zones in Dubai. It's called Jebel
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Ali free zone. JAFZA is an acronym聽
for Jebel Ali Free Zone Authority.聽聽
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Ah, okay. Okay. So you mentioned in the beginning聽
that this is an interesting engagement, could you聽聽
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elaborate on that? Yeah. Like I said you know it's聽
going to be a financial business for the Client,聽聽
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a holding structure for a financial business has聽
has a lot of key concerns for the Client which is聽聽
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basically you know the capital gains taxation,聽
the taxation on withdrawing dividends so we聽聽
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and again you know one of the Clients聽
is an Indian national resident in UAE聽聽
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the other is a British national resident聽
in UAE again so it was.. We had to optimize
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the holding structure in a way聽
which optimize their taxation聽聽
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because the Client did not want to incur a lot聽
of taxation they wanted to optimize the structure聽聽
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and also optimize the regulation which you聽
know basically exposes them to the least聽聽
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in terms of if anything goes wrong with their聽
partner because their partner was somebody that聽聽
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they did not know from the start so addressing聽
those concerns and you know understanding聽聽
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the situations that the Client would find聽
themselves into and then finding solutions for聽聽
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that it was a very learning very you know I would聽
say very enlightening journey for us also in this聽聽
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engagement. All right. So with this engagement聽
were there like any like specific challenges聽聽
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that you have faced if there are any of them?聽
Yeah. So you know one of the reasons the Client聽聽
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wanted a JAFZA offshore company and聽
why we recommended it was because聽聽
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for UAE offshore companies you know it's very聽
difficult to get local UAE bank accounts because聽聽
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typically their reputation is not that great聽
within the local UAE fraternity because they have聽聽
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no substance. The difference with a JAFZA company聽
is JAFZA's reputation is impeccable. Primarily聽聽
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there is a CID investigation that's done on the聽
UBOs and the Shareholders and it's approved by the聽聽
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Ministry of Interior and that is when you get to聽
incorporate a company. So that's something which聽聽
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is not common with offshore company setups but聽
it's something which JAFZA does to kind of add聽聽
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more credibility to the offshore structure and聽
the Client needs to physically visit the JAFZA聽
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office in Dubai before the聽
company (is incorporated). So
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it's a challenge also but since the Client was a聽
UAE resident it was easier for us to set it up and聽聽
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incorporate the business that way. Definitely.聽
Yeah. So how were you able to overcome this聽聽
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challenge? For us another challenge聽
was the Client was planning to travel聽聽
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to India you know it's a local festival in聽
India and they wanted to travel and we had聽聽
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only about a week's time before they travel聽
so typically what happens is when you聽聽
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submit an application to JAFZA, JAFZA do the CID
investigation and then they call you to sign in聽聽
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the incorporation forms. But because our Client
was going to travel for about four weeks what we聽聽
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did was you know we spoke to JAFZA, sought聽
an exemption for the Client where we asked聽聽
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the Client to sign the incorporation forms聽
before the CID investigation is completed,聽聽
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so that you know the Client does not have to聽
travel back to UAE to to sign the incorporation聽聽
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forms and everything can move in a timely fashion.聽
So fortunately we managed to get that exemption聽聽
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the client signed the forms and the application聽
currently is under the Ministry of Interior聽聽
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for approval. So that was a challenge聽
that we had to overcome for the Client.
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But well win-win situation on both sides. So聽
I know opening a corporate bank account can be聽聽
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challenging for many engagements or even tedious聽
at times, how did you handle that? So again you聽聽
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know given that the Client was a UAE resident
and had an existing UAE bank account it's聽聽
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somewhat easier compared to other聽
accounting processes and you know聽聽
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again, though we are setting up an off-shore
company we set up a JAFZA offshore company聽聽
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which has a lot of reputation especially within聽
the UAE banks so it was easier. What we did for聽聽
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the Client was we got an in-principle willingness聽
from multiple UAE banks you know it's now just聽聽
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about signing off the forms once the company is聽
incorporated, the bank does a compliance check聽聽
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if everything's all right they on-board us. So...
Okay cool. So for this engagement like what were聽聽
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some of the highlights for you to think? I think聽
the the best part of this engagement or the most聽聽
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interesting part of the engagement was the initial聽
structuring that we had to do for the Client.聽聽
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To kind of come to the conclusion where we are聽
today and you know it's something which we as聽聽
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Healy Consultants Group bring to the table in聽
terms of our global expertise and experience where聽聽
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we can help our Clients optimize聽
their global structure to the way聽聽
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they want to in terms of their taxation, in terms聽
of their handling and so on and so forth. Okay,聽聽
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well great! I hope the rest of the engagement聽
goes smoothly fingers crossed and thank you聽聽
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for your time today have a great day Apurv! Thank聽
you so much Chloe, thank you. Thank you, bye-bye.
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