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No UAE national shareholder is required, it is not necessary to hire staff but it’s mandatory to rent an office though at low cost.

Benefits of Freezone Business Setup

Free Zone Companies (FZCo) are exempt of corporate taxes and personal taxes, minimizing withholding tax of remittance to other countries. No custom duties are imposed on goods imported and exported from Free Zone.

Additional Benefits are

  • Low bureaucratic requirements for incorporation.
  • Fewer Restrictions related to staff recruitment.
  • No import/export taxes.
  • High quality infrastructure facilities.
  • Competitively priced energy and utilities

The Limitations of Free Zone license

  • The Free Zone Company will be limited to its zonal business activities.
  • Cannot do the business in Dubai or other part of UAE.
  • Share capital varies from US $14/- to US $300/- depending on the Free Zone chosen.
  • The share capital can be used to fund daily business activities.
  • Company licenses are renewable annually after FZ laws are compiled with including submitting audited financial statement to authorities.
  • The FZ Company must rent office within its zone and cannot rent office in city center.

FREE ZONE DUBAI

UAE is home to more than 30 Free Zones offering services of Free Zone business registrations and Company formations. Dubai is one of the seven emirates of the United Arab Emirates (UAE).It is located south of the Persian Gulf in the Arabian Peninsula. Dubai has emerged as a business hub on a global platform. Dubai has many Free Zones. The concept of having Free Zone is to set up with special economic Free Zones with the objective of offering tax free & custom duty benefits to expatriates investors.

There are thousands of companies operates within the Free Zone in Dubai. Since the Formation of these Free Zones, over the years Free Zones has generated huge amount of employment opportunities both for Nationals and Expatriates in UAE. The idea behind the formation of these Free Zones to offer companies, private business and government organizations to keep the ownership of the companies within themselves without the need to have a UAE national partner. Dubai has the maximum number of Free Zones in UAE. Where as in case of an LLC Company, you require a UAE national as a majority partner. Free Zone Companies do not require a UAE national as a partner.

You can register a new company as a Free Zone Establishment (FZE) or a Free Zone Company (FZC, FZCO, or FZ-LLC). Free Zone companies are in generally limited liability companies (LLC).

While a Free Zone company is an independent legal entity with individual shareholder(s), corporate shareholders, or a mixture of both, an LLC is a business entity that is neither a sole proprietorship/partnership nor a true corporation, but a structure that combines some of the best aspects of both, with the limited liability of a corporation.

Key Difference

FZEFZ-LLC
Has a single-shareholder (either an individual person or a company)Generally requires 2 or more shareholders. Maximum of 5 shareholders.

While both offer the same operating benefits, there may also be differences in share capital requirements depending upon the Free Zone and the purpose of incorporation. However, as a general rule, the paid-up capital amount ranges between AED 50,000 to AED 300,000.

Why Register a Company Within a Free Zone?

  • 100% expat ownership
  • No currency restrictions
  • 100% repatriation of capital and profits
  • No corporate, personal, or capital gains tax
  • World-class and state-of-the-art purpose-built infrastructure
  • No foreign exchange controls
  • Companies can operate 24 hours, security around the clock
  • Availability of human labour
  • Availability of residency visas for 3 years (renewable)

An LLC Which is Not a Free Zone LLC

LLCFZ-LLC
Only 49% of company shares can be owned by a non-resident. Additionally, in order to setup an LLC, foreigners must appoint a local sponsor/partner who is entitled the 51% of the company shares.100% ownership by foreigners
Can only conduct business activities inside the free zone area where it is registered as well as within the UAE.Can conduct business across the UAE and internationally.
Supports commercial, professional, and industrial licensesSupports commercial, professional, and industrial licenses