Origin of Offshore

Offshore in the UAE is rather popular due to the great number of free trade zones in the country. The term is not new and in a literal translation from English it means beyond the shore.

Some sources say that it appeared in the course of proceedings related to commercial rights of merchants in England at the later 18th century and some say that it originates from America in the 20th century, when one of the local firms changed its location for the area beyond the country, thereby denying its subordination to the American law. The offshore that is most similar to the currently existing schemes appeared in the Switzerland, where the financial secrecy authorities started active operation. The law provided for confidentiality of offshore companies, which drew attention of the great number of investors.

If you delve deeper into the history, you will see that offshore schemes existed in the ancient Athens, when the merchants sold their goods on the nearby Greek island due to the import taxes imposed by the government authorities. And if so, why not assume that offshore for the UAE is not a new phenomenon, the offshore schemes existed even in the time of Bedouins.

Nevertheless, whichever version we would adhere to, the meaning remains the same. Offshore has acquired the economic and geographic nature and been used nowadays to characterize the situation when the company changes its geographical location and goes out of the state control due to commercial interests. As a rule, it is conditioned by the more favorable conditions in the country or trade zone, where the company intends to carry out its business activity. For example, registration of the company in the UAE offshore zone is much easier as the procedure for registration is simplified and the requirements imposed by the government authorities on accounting are not so severe.

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