Setting Up a Free Zone LLC Company in the UAE | 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.
A Free Zone LLC (FZ-LLC) in UAE is a company in a free zone with 100% foreign ownership, zero corporate tax, and limited liability. It’s ideal for international trade, tech, media, or logistics businesses, with a streamlined UAE business setup process.
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 Setup.
- 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.
Insight: A client in Jebel Ali Free Zone saved thousands on import duties, boosting their logistics business’s profitability.
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.
Breaking Down the Costs: How Much to Budget in 2025?
Understanding the Dubai Free Zone company setup cost is crucial for planning.:
Registration and Licensing 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/year, based on activity (e.g., AED 15,000 for a professional license in Shams).
- Additional Fees: AED 20 for “Knowledge Dirham” and “Innovation Dirham” per transaction.
Office Space and Facility Costs
- Flexi Desk: AED 10,000–20,000/year (e.g., AED 12,500 in Meydan).
- Executive Office: AED 30,000–150,000/year, depending on size (e.g., 50 sq.m. in DAFZ costs AED 40,000).
- Warehouse: AED 50,000–250,000/year for industrial businesses in Jebel Ali.
Visa Processing and Additional Expenses
- Visa Costs: AED 3,000–5,000 per visa, with quotas tied to office size (e.g., 1 visa per 80 sq.ft.).
- Notarization: AED 1,000–5,000 for documents like Memorandum of Association.
- Business Plan Preparation: AED 2,000–10,000 if outsourced.
- Bank Account Setup: Free, but minimum balance requirements range from AED 10,000–50,000.
Total Estimate: Setting up an FZ-LLC in Dubai costs AED 20,000–150,000 in the first year, with RAKEZ and Meydan being the cheapest (AED 15,000–50,000).
Cost Breakdown by Free Zone
| Free Zone | Registration Fees | License Fees | Flexi Desk | Total First-Year Cost |
| DMCC | AED 7,500 | AED 15,000–50,000 | AED 15,000 | AED 35,000–100,000 |
| RAKEZ | AED 3,500 | AED 10,000–30,000 | AED 10,000 | AED 15,000–50,000 |
| Meydan | AED 4,000 | AED 12,500–25,000 | AED 12,500 | AED 20,000–60,000 |
| DIFC | AED 10,000 | AED 20,000–50,000 | AED 30,000 | AED 50,000–150,000 |
Ongoing Compliance: Staying on the Right Side of Regulations
Running an FZ-LLC requires ongoing compliance to avoid penalties. Here’s what you need to know:
Annual General Meetings and Resolutions
- Requirement: Hold at least one annual general meeting (AGM) unless you’re a single shareholder.
- Resolutions: Passed by majority vote, as per your Memorandum and Articles of Association.
- Tip: Document all resolutions to maintain corporate governance.
Audited Financial Statements
- Mandatory: Submit audited statements within 90 days of the license renewal period or calendar year.
- Process: Engage a chartered accountant to prepare audited financial statements.
- Penalties: Non-compliance can lead to fines or license suspension.
Ultimate Beneficial Owner (UBO) Requirements
- Requirement: File a UBO register with the free zone authority, identifying the ultimate owner.
- Updates: Notify changes within 15 days to avoid penalties (e.g., AED 5,000–20,000 fines).
- Example: A client in DMCC avoided a fine by promptly updating their UBO after a shareholder change.
License Renewal and Penalties
- Frequency: Renew your trade license annually, with fees similar to initial costs (AED 10,000–50,000).
- Penalties: Late renewals can incur fines (e.g., AED 1,000–10,000) or license cancellation.
Choosing the Best Free Zone for Your Industry
Selecting the right free zone is critical for success. Here’s a deep dive into top options and industry-specific insights to address “Which free zone is best for an LLC startup?”:
Dubai’s Top Free Zones
- DMCC: Supports 600+ activities, from precious metals to fintech. Ideal for startups and SMEs.
- DIFC: A global financial hub for banks, wealth management, and capital markets.
- Dubai Silicon Oasis: Perfect for tech startups, software development, and innovation.
- Meydan Free Zone: Budget-friendly for consultancy and creative industries.
- DAFZ: Strategic for aviation, logistics, and warehousing near Dubai International Airport.
Free Zones in Other Emirates
- ADGM (Abu Dhabi): A leader in fintech and investment firms, with robust regulations.
- RAKEZ (Ras Al Khaimah): Cost-effective for SMEs, manufacturing, and eCommerce.
- Sharjah Media City (Shams): Ideal for media, content production, and digital content.
- Ajman Free Zone: Great for trading and professional services at low costs.
Industry-Specific Free Zone Insights
- Tech and Innovation: Dubai Silicon Oasis offers incubators and R&D facilities.
- Media and Content: Dubai Media City and Shams provide studios and media licenses.
- Logistics and Trading: Jebel Ali and DAFZ excel due to port and airport access.
- Fintech and Finance: ADGM and DIFC offer regulatory support and networking.
Banking for Your Free Zone LLC: A Practical Guide
Opening a bank account for your FZ-LLC is essential for operations. Here’s how to do it:
- Select a Bank: Choose banks like Emirates NBD, HSBC, or Mashreq, with minimum balances of AED 10,000–50,000.
- Submit Documents: Provide your business license, passport copies, Memorandum of Association, and proof of address.
- Complete KYC: Banks verify your business activities and shareholder details.
- Account Activation: Takes 3–10 days, depending on the bank.
UAE Golden Visa: Unlocking Long-Term Residency
The UAE Golden Visa offers 5–10 years of residency for FZ-LLC owners who:
- Invest AED 2 million or more in their business.
- Generate significant revenue or employ staff in strategic sectors (e.g., tech, healthcare).
- Submit financial statements and proof of investment via the free zone or PRO services.
How PRO Services Simplify Your Free Zone Setup
PRO services are a lifesaver for navigating UAE business setup. They handle:
- Document Preparation: Application forms, notarizations, and translations.
- License Processing: Ensure compliance with free zone rules.
- Visa and Banking: Streamline visa processing and bank account openings.
- Compliance Support: File UBO details and audited statements.
FAQS For Free Zone LLCs
Q1: What is the cost of setting up a Free Zone LLC in UAE?
Costs range from AED 15,000–150,000, including registration (AED 3,500–10,000), licenses (AED 10,000–50,000), and office space (AED 10,000–150,000).
Q2: How long does it take to set up an FZ-LLC?
Setup takes 2–10 days, with RAKEZ at 2–4 days and DIFC up to 10 days.
Q3: Can freelancers set up an FZ-LLC?
Yes, freelancers can get a professional license in zones like Shams, needing only a CV and bank reference.
Q4: What are the cheapest free zones in UAE?
Meydan and RAKEZ offer setups starting at AED 15,000–20,000.
Q5: What happens if I don’t renew my trade license?
Late renewals incur fines (AED 1,000–10,000) or license cancellation.
Conclusion: Launch Your UAE Business with Confidence
Starting a Free Zone LLC company in UAE in 2025 is a strategic move for entrepreneurs seeking 100% foreign ownership, tax exemptions, and a business-friendly environment. With over 40 free zones, from DMCC to RAKEZ, you can find the perfect hub for your business activities, whether in tech, media, or logistics. By following the step-by-step process, leveraging PRO services, and staying compliant, you’ll set up a thriving business in no time. Ready to dive into company formation in Dubai? Connect with a business setup consultant in Dubai to make your UAE business setup seamless.
