Table of Contents
Frequently Asked Questions
What is the difference between an FZ-LLC, FZE, and FZCO in Dubai?
All three are free zone structures offering 100% foreign ownership and limited liability. The label depends on the number of shareholders: a sole founder typically receives an FZE, while two or more shareholders receive an FZ-LLC or FZCO. The legal substance is broadly the same across all three.
Can I open an FZ-LLC in Dubai without travelling to the UAE?
Yes. The entire company formation stage runs online. You submit your passport copy, choose your business activities, reserve a name, and sign documents digitally. You only need to travel to Dubai later if you want UAE residency, which requires an in-person medical test and biometrics.
How long does it take to open an FZ-LLC company in Dubai?
A standard application issues in about one business day. The Fawri instant license option issues in under 60 minutes for eligible solo founders. Residency and banking run as separate tracks afterward and take additional time.
How much does it cost to open an FZ-LLC in Dubai, including all fees?
The base license at Meydan Free Zone starts from AED 12,500, which includes the flexi desk, registered address, and up to three activity groups. Residency adds roughly AED 4,000 to 8,000 once you factor in the establishment card, entry permit, medical, and Emirates ID.
Can an FZ-LLC sell directly to customers on the UAE mainland?
Not directly. An FZ-LLC operates within its free zone and internationally. Direct mainland sales require a distributor arrangement or a separate mainland license. If most of your customers are UAE-based consumers, a mainland company is the appropriate structure.
What documents do I need to open an FZ-LLC as a foreign national?
For a sole founder, you need a clear colour copy of your passport with at least six months of validity remaining, plus a passport-size photograph with a white background. Corporate shareholders add the parent company's certificate of incorporation, memorandum of association, and a board resolution. Scans are accepted at the initial stage.
Topic Summary
What an FZ-LLC Actually Is
An FZ-LLC is a UAE business entity registered with a free zone authority, offering 100% foreign ownership and limited liability. Shareholders are only liable up to their capital contribution, with no local partner required.
What You Need Before You Start
A valid passport with six months' remaining validity, a clear business activity, and a preferred company name are the essentials. Decide upfront whether residency is part of your plan, since the company can be formed first and residency added later.
Choose Your Free Zone and Business Activity
Your activity determines what you can legally invoice for and how banks read your file. One license carries up to three activity groups from a list of more than 2,500 options, so choose the most accurate description of what you actually do.
Reserve Your Name and Submit the Application
Run a company name check, confirm it meets UAE naming rules, then submit your passport details and chosen activities online. The entire application is digital and does not require you to be in Dubai.
Pay the Fees and Receive Your Documents
Once approved, pay the license fee online and receive your trade license, certificate of incorporation, memorandum of association, and share certificate digitally. Check spellings carefully before using these documents for banking or visa applications.
What Happens After the License: Banking, Residency, and Compliance
Banking, your investor visa, and corporate tax registration are separate tracks that follow once the license is in hand. Every UAE company must register for corporate tax with the Federal Tax Authority, regardless of revenue level.
How to open Free Zone LLC company in Dubai: Requirements, Costs & Benefits
An FZ-LLC is a free zone limited liability company. It is registered with a free zone authority rather than with the mainland licensing department. That single difference shapes everything else. You get full foreign ownership with no local partner. In most cases there is no separate office lease, and the license arrives faster.
This guide explains what an FZ-LLC is, how it differs from an FZE, and how the setup process works. It also covers documents, share capital, corporate tax, and the rules on trading with the UAE mainland. Free zone rules differ between authorities and change over time. Confirm the current requirements with your chosen free zone before you commit.
Key Facts at a Glance
FZ-LLC Meaning and Structure
An FZ-LLC is a separate legal person from its owners. It can sign contracts, hold assets, employ staff, and open bank accounts in its own name. Shareholder liability is limited to the capital each has put in.
The structure exists because free zones operate as their own jurisdictions. Each free zone authority sets its own company forms, capital rules, and naming conventions. This is why the terminology is inconsistent across the UAE. Some authorities call the multi shareholder form an FZ-LLC. Others call the same thing a free zone company, or FZCO. The legal substance is broadly the same.
One point causes real confusion. An FZ-LLC is not a mainland limited liability company. A mainland company is licensed by the emirate's economic department and needs registered premises. An FZ-LLC is licensed by a free zone. The names are similar and the structures are not.
Free Zone Company Structures Compared
Most free zones allow a single shareholder company to convert later when new shareholders join. If you expect to bring in a partner or an investor, the multi shareholder form is worth considering from the start.
How to Open an FZ-LLC Company in Dubai Step by Step
The process is shorter than the mainland route and largely online.
- Choose your free zone and activity. The activity drives your license type, your permitted operations, and your fees.
- Pick the legal structure. An FZ-LLC for two or more shareholders, or a free zone establishment for one.
- Reserve a trade name. Naming rules apply, including restrictions on religious and government terms.
- Submit the application and documents. Most free zones handle this through an online portal.
- Pay the fees and receive the license. Some free zones issue digitally within the same day.
- Get the establishment card. This opens the company immigration file so you can sponsor visas.
- Apply for residence visas. Each person then goes through medical, Emirates ID, and stamping.
- Open a corporate bank account. This is assessed separately by the bank and can take several weeks.
Speed varies by free zone. Meydan Free Zone issues its Fawri license online in under 60 minutes, while the Regular license starts from AED 12,500. Both include a flexi desk and a registered address, plus up to three activity groups from a list of more than 2,500.
Documents Needed for an FZ-LLC Setup
Requirements are lighter than the mainland equivalent. There is usually no notarised Arabic memorandum to arrange at a court.
- Passport copies. For every shareholder, director, and manager.
- Emirates ID and visa copies. Where a shareholder already lives in the UAE.
- Proof of address. Often requested for non resident shareholders.
- Corporate documents. Attested and translated formation papers where a company is a shareholder.
- Application forms. Completed through the free zone portal, including business activity selection.
Free zones apply their own know your customer checks. Non resident applicants should expect requests for bank statements or proof of source of funds.
FZ-LLC Cost and Share Capital
Cost depends on the free zone, the activity count, the workspace, and the number of visas.
License packages are the main figure. A Meydan Free Zone license starts from AED 12,500 for the Regular option and AED 15,000 for Fawri. Because a flexi desk and registered address are included, there is no separate office lease to budget for at entry level. Visas, workspace upgrades, and extra activities are priced separately.
Share capital rules vary widely. Many free zones require no paid up capital at all. Others set a figure, and some regulated activities require substantial capital. There is no single UAE wide number. Check the requirement for your free zone and activity rather than relying on a general figure.
Corporate Tax Rules for Free Zone Companies
This is the most misunderstood part of free zone setup, and the misunderstanding is expensive.
A free zone company is not automatically tax free. Corporate tax applies across the UAE. A free zone company may access a 0% rate, but only as a Qualifying Free Zone Person, and only on qualifying income. Everything else is taxed at 9%.
The conditions are cumulative. The company must be a free zone person and derive qualifying income. It must maintain adequate substance in the UAE and comply with transfer pricing rules. It must also prepare audited financial statements and not have elected into the standard regime. Non qualifying revenue must stay within the de minimis threshold. That is the lower of AED 5 million or 5% of total revenue.
Adequate substance is the condition most often underestimated. It means real activity in the zone, with appropriate staff, assets, and spending. A company with an address and nothing else is unlikely to satisfy it. Breaching the conditions can cost the status for the current tax period and several that follow.
This section is general information only. It is not legal or financial advice. Speak to a qualified tax professional before relying on the 0% rate.
Trading With the UAE Mainland
A common myth says free zone companies cannot do business in the UAE. That is not accurate, but the rules do differ.
An FZ-LLC can trade freely inside its own free zone and internationally. Selling directly to mainland customers is where the extra step comes in. There are three usual routes. You can appoint a mainland distributor or agent, open a mainland branch, or hold a dual license where the free zone offers one. Each route has cost and tax implications, including on qualifying income.
If most of your revenue will come from mainland UAE customers, model that properly before choosing the structure.
Next Steps
An FZ-LLC suits founders who want full ownership, limited liability, and a setup route without a separate office lease. Decide your shareholder structure first, since that determines whether you register an FZ-LLC or a free zone establishment. Then check your activity against the free zone's list and confirm the share capital rule that applies. Take advice on the qualifying income conditions before assuming a 0% tax outcome. Plan a mainland route if your customers sit onshore. The team at Meydan Free Zone can explain what a license includes, what visas cost, and how quickly you could be trading.
