Start your LLC Company Setup in Dubai Free Zone | Your 2025 Guide to Success
A Free Zone Limited Liability Company (FZ-LLC) is a business structure in which foreign businesspeople and investors can set up a company in one of the UAE Free Zones and enjoy 100% foreign ownership. An FZ-LLC is more advantageous than a mainland LLC, which needs a local sponsor with 51% shares, as it provides unrestricted control, full tax exemptions, and simpler setup procedures, which is perfect for foreign investors. As of 2025, the free zones in the UAE continue to be a hub for international businesses due to their business-friendly policies and modern infrastructure.
Why Choose a Free Zone LLC for Your Business?
Setting up an FZ-LLC in the UAE comes with a lot of unique benefits for entrepreneurs. I have witnessed many startups and even established companies succeed in free zones because of the many benefits they provide. Here is what I have compiled for you.
Benefits of 100% Foreign Ownership
- Full Control: For a Free Zone company, you don’t need a UAE national partner, and unlike a mainland LLC, you have full ownership. You control 100% of your Free Zone company.
- Global Reach: It’s a go-to for foreign investors who wish to venture into the Middle East without any local sponsorship.
- Flexibility: Shareholders may be individuals or corporate entities with a minimum of 1 and a maximum of 50.
Tax Incentives and Profit Repatriation
- Zero Corporate Tax: Most free zones offer corporate tax exemptions. Your company’s profit tax-free up to 375,000 AED for Free Zones is a huge boost to startups.
- No Export/Import Duties: Reduce costs for international trade, a massive help for logistics companies or eCommerce startups.
- 100% Profit Repatriation: Profits and capital can be moved back without any limitations.
Access to World-Class Infrastructure
- High-Tech Class A Offices: Free zones like DMCC or DIF provide top-of-the-line offices, Class A warehouses, and IT connectivity.
- Free zones offer industry-specific hubs tailored to your sector, for example, Dubai Media City for media-related businesses and Dubai Silicon Oasis for technology companies.
- Logistics Advantage: Having access to ports and airports, like DAFZ near Dubai International Airport, streamlines Dubai Silicon Oasis.
How to Set Up a Free Zone LLC in the UAE: A Comprehensive Guide
Establishing an FZ-LLC in an emirate like Dubai is simple when following a specific procedure. Many of my clients have completed this process, and I am confident that this guide will help you as well. Let’s get started:
Step 1: Choose Your Business Activity
The variety of activities each business can engage in is wide-ranging and directly affects what sort of business license is needed. Some of the existing licenses are
- Commercial License: For the trading of goods through import and export.
- Professional License: Provided for consultancy and legal or accounting services.
- Industrial License: For any sort of manufacturing or production activities.
- eCommerce License: For online businesses, expected to grow in 2025.
Step 2: Select the Right Free Zone
There are over 40 free zones in the UAE, each dedicated to a specific industry. Some of the more well-known include:
- Dubai Multi Commodities Centre (DMCC): Ideal for commodities, tech, and single-family offices.
- Dubai International Financial Centre (DIFC): Perfect for financial services and wealth management.
- Abu Dhabi Global Market (ADGM): Suited for fintech and investment firms.
- Meydan Free Zone: Cost-effective for startups and creative businesses.
- Sharjah Media City (Shams): Great for arms of media and content production.
Step 3: Register Your Trade Name
Your trade name should be distinctive and follow the rules of the UAE. These rules are:
- Incorporate “LLC” or “FZ-LLC” as the suffix.
- No offensive or inappropriate wording.
- It must comply with your business activities.
- You can check the free zone’s portal or the Department of Economic Development (DED) for name registration.
Step 4: Secure Office Space
All FZ-LLCs need an office registered in the chosen free zone. The following are offered:
- Flexi Desk: A shared desk for new businesses starting at AED 10,000/year.
- Executive Office: Private offices for large teams (15-200 sq m).
- Warehouse: Available in Jebel Ali Free Zone for industrial or trading businesses.
Cost Insight: In DMCC, a flexi desk goes for AED 15,000/year, while executive offices start at AED 30,000.
Step 5: Submit Pre-Approval Documents
- You need to submit:
- Application form
- Shareholders’ and directors’ passport copies.
- Business activities plan
- Shareholders’ proof of residence.
- Trade license (if applicable for corporate shareholders).
Step 6: Finalize Company Registration
Following the pre-approval process, you may need to submit the following documents:
- Business Board resolution appointing a manager or director.
- Business Memorandum and Articles of Association, properly notarized.
- Business Manager’s power of attorney.
- Business Manager’s specimen signature and passport-sized photographs.
- Business: Share capital information, if applicable.
Step 7: Obtain Your Business License
As soon as all fee payments have been completed, the free zone authority will issue your business license within a span of 2 to 10 days. Processing of visas can then begin, as well as opening a bank account.
Requirements for Setting Up a Free Zone LLC
A prerequisite for setting up an LLC in a specific free zone in the UAE is that you have to fulfill certain company requirements. These requirements will differ depending on the free zone you select.
Capital Requirements
No universal minimum: Nearly all free zones, for instance, RAKEZ or Sharjah Media City, have no minimum capital requirements.
Exceptions:
- DMCC: AED 50,000 is required for most activities; for general trading, AED 1 million.
- KIZAD: For LLCs, AED 150,000.
- Dubai Media City: For broadcasting activities, AED 2.5 million.
- Insight: From my experience, clients have been able to make a significant saving by selecting zones like Meydan, which have no minimum capital for new businesses.
Shareholders and Directors
- Shareholders: Individuals or companies have a minimum of 1 and a maximum of 50 shareholders.
- Directors: No nationality or number restrictions, but need to have at least one director.
- Flexibility: You may combine the two roles, which aids in the reduction of the firm’s workload.
Appointment of a company secretary and manager
- Manager: Must be an authorized signatory for all company contracts and for dealing with the free zone authority.
- Company secretary: Though optional, it is best for the governance of the firm, maintenance of the records, and ensuring compliance with mandatory reporting documents.
Costs of Setting Up a Free Zone LLC in UAE
The Dubai Free Zone company setup cost varies based on the free zone, business activity, and office type.:
Registration and License Fees
- Registration Fees: AED 3,500–10,000 (e.g., AED 3,500 in RAKEZ, AED 7,500 in DMCC).
- License Fees: AED 10,000–50,000 annually, depending on the activity (e.g., AED 15,000 for a professional license in Dubai Silicon Oasis).
- Additional Fees: AED 20 for “Knowledge Dirham” and “Innovation Dirham” per transaction.
Office Space Costs
- Flexi Desk: AED 10,000–20,000/year (e.g., AED 15,000 in DMCC).
- Executive Office: AED 30,000–100,000/year, based on size and location.
- Warehouse: AED 50,000–200,000/year in zones like Jebel Ali.
Visa and Additional Expenses
- Visa Costs: AED 3,000–5,000 per visa, with quotas based on office size (e.g., 1 visa per 80 sq.ft.).
- Bank Account Setup: Free with most UAE banks, but minimum balance requirements range from AED 10,000–50,000.
- Other Costs: Notarization (AED 1,000–5,000), business plan preparation (AED 2,000–10,000).
Total Estimate: Starting an FZ-LLC in Dubai costs AED 20,000–100,000 in the first year, depending on the free zone and setup.
Compliance and Ongoing Obligations
Running an FZ-LLC requires adherence to free zone regulations. Here’s what you need to stay compliant:
Annual General Meetings
- Requirement: Hold at least one meeting per year (unless you’re a single shareholder).
- Process: Pass resolutions by majority vote, as outlined in your Memorandum and Articles of Association.
Audited Financial Statements
- Mandatory: Submit audited statements within 90 days of the license renewal period or calendar year.
- Tip: Hire a chartered accountant to ensure compliance and avoid penalties.
Ultimate Beneficial Owner (UBO) Filing
- Requirement: Maintain and file a UBO register with the free zone authority.
- Updates: Notify changes within 15 days to avoid fines.
License Renewal
- Frequency: Annually, with fees similar to initial license costs.
- Example: In DMCC, renewal costs around AED 15,000–30,000, depending on the license type.
Comparing Free Zone LLC vs. Mainland LLC
To help you decide, here’s how an FZ-LLC compares to a mainland LLC, addressing the query “LLC vs Free Zone company in UAE”:
Ownership Structure
- FZ-LLC: 100% foreign ownership, no local sponsor required.
- Mainland LLC: Requires a UAE national sponsor with 51% shares, unless exempt (e.g., professional licenses allow 100% foreign ownership with a local service agent).
Business Jurisdiction
- FZ-LLC: Restricted to the free zone or international markets. Mainland trade requires a distributor.
- Mainland LLC: Can operate anywhere in the UAE, ideal for local market access.
Taxation and Costs
- FZ-LLC: Zero corporate tax, no import/export duties.
- Mainland LLC: Subject to 9% corporate tax on profits over AED 375,000 (as of 2025).
- Cost Example: An FZ-LLC in Meydan starts at AED 20,000, while a mainland LLC requires AED 300,000 capital (not deposited).
Table: FZ-LLC vs. Mainland LLC Comparison
| Factor | FZ-LLC | Mainland LLC |
| Ownership | 100% foreign ownership | 51% UAE national sponsor |
| Jurisdiction | Free zone or international | Anywhere in UAE |
| Corporate Tax | 0% | 9% on profits > AED 375,000 |
| Office Requirement | Flexi desk or office in free zone | Minimum 140 sq.ft. on mainland |
| Visa Quotas | Based on office size or package | Based on office size (80 sq.ft./visa) |
| Setup Cost | AED 20,000–100,000 | AED 30,000–150,000 |
Which Free Zone Is Best for Your Business?
Choosing the right free zone depends on your business activities and budget.:
Popular Free Zones in Dubai
- DMCC: Supports over 600 activities, ideal for tech, commodities, and single-family offices. Setup cost: AED 35,000–100,000.
- DIFC: Best for financial services, with a robust legal framework. Setup cost: AED 50,000–150,000.
- Dubai Silicon Oasis: Perfect for tech and innovation startups. Setup cost: AED 20,000–80,000.
- Meydan Free Zone: Budget-friendly for creative and professional services. Setup cost: AED 15,000–50,000.
Free Zones in Abu Dhabi, Sharjah, and Beyond
- ADGM: Fintech and investment hub, with strong regulatory support. Setup cost: AED 40,000–120,000.
- Sharjah Media City (Shams): Great for media and content creators. Setup cost: AED 15,000–60,000.
- RAKEZ: Versatile for SMEs, with low costs. Setup cost: AED 10,000–50,000.
How to Open a Bank Account for Your Free Zone LLC
Opening a bank account for your FZ-LLC is straightforward. Most UAE banks, like Emirates NBD or Mashreq, offer accounts for free zone companies. Here’s how:
- Choose a Bank: Select based on minimum balance (AED 10,000–50,000) and services.
- Submit Documents: Provide your business license, passport copies, and Memorandum of Association.
- Complete KYC: Banks require proof of address and business activity details.
- Account Activation: Takes 3–7 days after approval.
UAE Golden Visa: Can Your Free Zone LLC Qualify?
The UAE Golden Visa offers long-term residency (5–10 years) for investors. FZ-LLC owners may qualify if:
- They invest a minimum of AED 2 million in the business.
- The company generates significant revenue or employs a certain number of staff.
- The business aligns with strategic sectors (e.g., tech, healthcare).
Process: Apply through the free zone authority or PRO services, submitting financial statements and proof of investment.
Why Use PRO Services for Free Zone Company Setup?
Navigating the UAE business setup process can be complex. PRO services simplify:
- Document Preparation: Handle application forms, notarizations, and translations.
- License Processing: Ensure compliance with free zone regulations.
- Visa and Banking: Streamline visa applications and bank account openings.
Common Questions About Free Zone LLC Setup
Q1: What is the cost of setting up a Free Zone LLC in UAE?
Costs range from AED 20,000–100,000, including registration (AED 3,500–10,000), license fees (AED 10,000–50,000), and office space (AED 10,000–100,000).
Q2: How long does it take to set up an FZ-LLC?
Setup takes 4–10 days, depending on the free zone. RAKEZ is fastest (2–4 days), while DIFC may take up to 10 days.
Q3: Can freelancers set up an FZ-LLC?
Yes, freelancers can set up an FZ-LLC with a professional license in zones like Dubai Media City or Shams, requiring fewer documents (e.g., CV, bank reference).
Q4: What are the cheapest free zones in UAE?
Meydan and RAKEZ are budget-friendly, with setup costs starting at AED 15,000–20,000.
Conclusion: Start Your Free Zone LLC Journey Today
Setting up a Free Zone LLC company in UAE is a smart move for entrepreneurs seeking 100% foreign ownership, tax exemptions, and access to a business-friendly environment. By choosing the right free zone, securing a business license, and leveraging PRO services, you can establish your company efficiently in 2025. Whether you’re launching a tech startup in Dubai Silicon Oasis or a trading business in DMCC, the UAE’s free zones offer unmatched opportunities. Start your company formation in Dubai today and unlock the potential of the Middle East’s business hub.
Ready to begin? Contact a business setup consultant in Dubai to streamline your UAE business setup and ensure compliance.
