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Free Zone Company vs Free Zone Establishment (FZ-LLC vs FZE)

free zone company

A Free Zone Company is a fantastic option for business owners who want to setup in Dubai. Dubai is arguably one of the world’s fastest growing business destinations. Historically, it is one of the youngest cities in the world to have evolved so rapidly. The success shared by many business owners in such a short period of time is a sure sign that this city has found a formula that works. Currently the most popular business setup option is a Free Zone company. There are over 22 Free Zones in the UAE, which represent approximately 10,000 companies. Dubai, being the most beneficial city in the UAE, for business, hosts the majority of those companies.

A Free Zone company can either be registered as a Dubai Free Zone Establishment or a Free Zone Company (FZE or FZC/FZCO/FZ-LLC, respectively). Distinguishing between a Dubai Free Zone Establishment vs. Free Zone Company is simple, although many business owners become confused as to which is best for their business needs.

While a Free Zone Company is an independent legal entity with one or more established individual shareholders, corporate shareholders or a mixture of the two; a Free Zone LLC is a business entity that is neither a sole proprietorship/partnership, nor a true corporation; but a unique structure that combines some of the best aspects of the two, with the added benefit of having the limited liability of a corporation.

Why Register a Company Within a Free Zone?

  • 100% foreign ownership
  • No currency restrictions
  • 100% repatriation of all revenue and profits
  • No personal, corporate or capital gains tax
  • World-class business infrastructure
  • No foreign exchange controls
  • Availability of skilled and unskilled workers
  • Residency visas available

Key Differences

Free Zone EstablishmentFree Zone Company
Single Shareholder (individual or company)Generally 2 to 5 shareholders

While both options offer the same benefits, there are typically some differences in share capital requirements. However, as a rule-of-thumb, the paid-up capital amount is between AED 50,000 and AED 300,000. Share capital must be present in the company’s account only at the time of registration. It may be transferred or spent post incorporation.

Non-Free Zone LLC vs. Free Zone LLC

Non-Free Zone LLCFree Zone LLC
A maximum of 49% of company shares can be owned by a foreign national. Must appoint a local sponsor who will own the majority share of the company.100% ownership by foreign nationals. No requirement for a local sponsor.
Can conduct business across the UAE and internationally.Can only conduct business activities inside the free zone area where it is registered and most areas within the UAE.
Commercial, professional and industrial licenses availableCommercial, professional and industrial licenses available

 



Zola Group offers holistic corporate services to local and global business clients. Our most popular comprehensive services include company setup, incorporation, residency and banking services. Contact our professional corporate services consultants via phone or email to inquire about how we can help you achieve success in this region's most rewarding emerging market.