A Free Zone Limited Liability Company (FZ-LLC), also known as FZCO, is a popular business structure in Dubai for foreign investors. It allows 100% foreign ownership without a local sponsor, limited liability protection (shareholders’ liability is capped at their capital contributions), and operations primarily within designated free zones.
As of 2026, Dubai’s free zones continue to attract global businesses due to streamlined digital processes, tax incentives, and sector-specific support.
This guide outlines key regulatory aspects specific to Dubai. Requirements may vary by free zone, so confirm details with the relevant authority.
Benefits of an FZ-LLC in Dubai
Establishing an FZ-LLC provides several advantages:
- Full Foreign Ownership: No requirement for UAE nationals to hold shares.
- Tax Exemptions: Usually, 0% corporate tax on profits. However, a 9% federal corporate tax may apply to certain mainland activities or income above AED 375,000. Free zones often qualify for exemptions.
- Profit Repatriation: 100% repatriation of profits and capital without restrictions.
- Customs Duty Exemptions: No import or export duties within the free zone.
- Visa and Residency: Eligibility for investor visas and employee residence permits, with quotas typically linked to office space.
- Sector-Specific Perks: Access to infrastructure tailored to industries like tech, finance, media, or logistics.
- Ease of Setup: Digital applications in many zones minimise paperwork and processing time.
FZ-LLCs cannot trade directly with the UAE mainland without a local distributor or additional licenses.
Choosing a Free Zone in Dubai
Dubai has over 30 free zones, each specialising in a specific sector. Choose based on your business activity, location, and budget. Popular options include:
- DMCC (Dubai Multi Commodities Centre): Ideal for commodities, trading, and services; known for flexible office options.
- IFZA (International Free Zone Authority): Cost-effective for startups and SMEs; offers flexible licensing options.
- JAFZA (Jebel Ali Free Zone): Suited for manufacturing, logistics, and trading; offers large warehouses.
- Ajman Free Zone: Budget-friendly for trading and services; simple setup process.
- DIFC (Dubai International Financial Centre): For finance, fintech, and legal services; regulated by its own authority.
- Dubai Internet City (DIC): Tech, IT, and software companies.
- RAKEZ (Ras Al Khaimah Economic Zone): Suitable for industrial, trading, and service businesses; competitive packages.
- DAFZA (Dubai Airport Free Zone): Aviation, logistics, and pharma.
Review each zone’s list of permitted activities, as not all business types are allowed. For example, DMCC supports commodities and trading, while JAFZA focuses on industrial activities.
Requirements for Setting Up an FZ-LLC in the UAE
As of 2026, many zones have simplified requirements, often requiring minimal or no share capital (AED 0-50,000, usually not required to be deposited upfront). Key prerequisites include:
- Shareholders: Minimum 1 (individual or corporate); maximum often 50. Can be 100% foreign.
- Directors/Managers: At least one, who can also be a shareholder.
- Business Activity: Must align with the free zone’s approved list (e.g., trading, consulting, IT services).
- Office Space: Mandatory. Options include flexi-desks (virtual offices) from AED 5,000 per year or physical offices.
- Documents Needed:
- Passport copies and photos of shareholders/directors.
- Proof of address (utility bill or similar).
- Business plan (required in some zones, such as DMCC, for regulated activities).
- No-objection certificate (NOC) if the shareholder has an existing UAE visa.
- Memorandum of Association (MOA) and Articles of Association (AOA).
- For corporate shareholders: Board resolution, certificate of incorporation, and incumbency certificate.
- Age and Eligibility: Shareholders must be at least 18 years old. Criminal record checks are generally not required except for sensitive sectors.
Audits are not mandatory for small setups, but compliance with anti-money laundering and economic substance regulations is required.
Step-by-Step Guide to Setting Up an FZ-LLC
Most processes are completed online through the free zone portal and typically take 1 to 4 weeks. The general timeline is as follows:
- Select Business Activity and Free Zone: Review the permitted activities and choose a suitable zone. Contact the authority for pre-approval if required.
- Reserve Trade Name: Submit three to five name options through the portal. Names must be unique, appropriate, and include “FZ-LLC” or a similar designation. Approval typically takes one to three days.
- Apply for Initial Approval: Submit shareholder details, activity description, and required documents. Pay the application fee (AED 1,000-5,000). This provides preliminary approval.
- Prepare Legal Documents: Draft the MOA and AOA, detailing share distribution, management, and other terms. Notarise if required.
- Lease Office Space: Sign a lease agreement with the free zone, such as for a flexi-desk for remote operations. The office size determines the visa quota, for example, one visa per nine square meters.
- Submit Full Application and Pay Fees: Upload all required documents and pay the license and registration fees. Authorities will review for compliance.
- Obtain Business License: Once approved, receive the electronic license. License types include commercial (trading), service (consulting), or industrial.
- Open a Corporate Bank Account: Approach UAE banks such as Emirates NBD or HSBC with your license and documents. The process takes one to two weeks and includes KYC checks.
- Apply for Visas: Submit applications for investor or employee residence visas, valid for two to three years. The process includes medical tests and the issuance of an Emirates ID.
- Register for VAT (if applicable): If annual turnover exceeds AED 375,000, register with the Federal Tax Authority.
Many zones offer one-stop services or PRO (Public Relations Officer) assistance for an additional fee.
Costs Involved
Costs vary by free zone, business activity, and selected services. An approximate breakdown for a basic setup (one shareholder, flexi-desk, one to three visas) as of 2026:
- Registration and License Fees: AED 6,000-15,000.
- Office Lease: AED 5,000 to 20,000 per year (from flexi-desk to small office).
- Visa Fees: AED 3,000 to 5,000 per visa, including medical tests and Emirates ID.
- Total Startup Cost: AED 12,000 to 50,000 for affordable zones, such as IFZA. Premium zones like DIFC may exceed AED 50,000.
Annual Renewal: AED 10,000 to 30,000. There are no hidden taxes, but consider living costs if relocating.
Timeframe
- Application to Approval: Three to ten days for straightforward cases.
- Full Setup (including visas and bank account): Two to four weeks.
- Delays may occur for regulated activities, such as finance, that require additional approvals.
Post-Setup Considerations
- Compliance: Complete annual license renewal, financial reporting if required, and adhere to UAE labour laws.
- Expansion: To trade on the mainland, appoint a local agent or convert to a mainland LLC.
- Banking and Accounting: Engage local firms for setup. Digital banking is standard practice.
- Updates for 2026: Processes are increasingly digital following 2025 reforms, with AI-assisted approvals in zones such as DIC.
- Professional Help: Consider engaging consultants such as Shuraa for a seamless setup, especially if you are unfamiliar with UAE regulations.
Why Need Professional Help?
Although setting up a free zone LLC is straightforward, engaging experts like Shuraa can accelerate and streamline the process.
Shuraa Business Setup is known as a full-scale Business Setup Company in the UAE and one of the UAE’s end-to-end Business Setup Specialists. Recognised as the UAE’s fastest-growing Business Setup Company, Shuraa helps entrepreneurs establish a free zone limited liability company in Dubai quickly and efficiently.
Our team assists with documentation, license approval, and visa processing at every stage of forming your free zone LLC in Dubai.
Start Your Free Zone LLC with Shuraa!
Establishing a free zone LLC in the UAE is a reliable way to start your business, offering full ownership, limited liability, tax benefits, and a straightforward registration process. Many Dubai companies choose this structure for long-term growth and security.
A Dubai free zone LLC enables legal operation and asset protection, whether starting alone or with partners. With proper guidance, the setup process is straightforward and stress-free.
Shuraa Business Setup offers comprehensive assistance for establishing your LLC in a Dubai free zone, including documentation, licensing, and visa support. Contact our team at +971 4 408 1900, WhatsApp +971 50 777 5554, or email info@shuraa.com for prompt and professional service.
