Company forms and shareholder rules are set by each free zone authority and by UAE federal law, and they change. This guide reflects the authorities' published rules at the time of writing. Confirm the form your chosen zone issues before you apply.
The short answer
- FZE means Free Zone Establishment: a free zone company with a single shareholder.
- FZCO (or FZC) means Free Zone Company: traditionally a free zone company with two or more shareholders. In some zones it now covers one shareholder too.
- FZ-LLC means Free Zone Limited Liability Company: the form issued by zones such as Dubai Internet City, with one or more shareholders.
- LLC on its own usually means a mainland limited liability company, licensed by the Department of Economy and Tourism in Dubai rather than a free zone.
In every case shareholders' liability is limited to their share capital. For most founders, the name on the licence is decided by the zone you pick, not chosen separately.
FZE: Free Zone Establishment
An FZE is a free zone company owned by one shareholder, which can be an individual or a company. Jebel Ali Free Zone (JAFZA) still issues FZEs, and describes them as having a legal personality separate from the shareholder, with liability limited to paid-up capital.
The FZE is being phased out in some zones. Under the Dubai Integrated Economic Zones Authority (DIEZ) Implementing Regulations 2023, which cover Dubai Silicon Oasis, Dubai Airport Freezone (DAFZA) and Dubai CommerCity, the FZE is no longer issued and existing FZEs are treated as FZCOs.
FZCO: Free Zone Company
An FZCO is a limited liability free zone company. The shareholder rules depend on the authority:
- JAFZA: an FZCO has two to fifty shareholders, who can be individuals, companies or a mix.
- DIEZ zones (Dubai Silicon Oasis, DAFZA, Dubai CommerCity): the FZCO is the standard company form and replaces the FZE, so a single shareholder can hold an FZCO. IFZA, which operates under the DIEZ framework, issues FZCO licences.
FZ-LLC: Free Zone Limited Liability Company
The FZ-LLC is the form used by TECOM business districts. Dubai Internet City, for example, only incorporates new companies as FZ-LLCs or registers branches of existing companies, and it sets a minimum paid-up capital for FZ-LLCs. An FZ-LLC can have one or more shareholders.
Mainland LLC and sole establishment
- LLC (mainland): licensed by the Department of Economy and Tourism in Dubai, or the equivalent department in other emirates. Since 2021, foreign investors can own 100% of a mainland LLC for most commercial activities. A mainland company can trade directly with UAE customers anywhere in the country. See mainland company formation.
- Sole establishment: a mainland business owned by one individual. Unlike an LLC, it has no separate limited liability, so the owner is personally responsible for its debts.
Branch
Most zones also let an existing UAE or foreign company register a branch. A branch has no separate legal personality or share capital: it is part of the parent company, carries its name and does the same activities. It suits established businesses rather than new founders.
Which one should you choose?
- Solo founder in a free zone: an FZE, FZCO or FZ-LLC depending on the zone. There is little practical difference for day-to-day trading, visas or banking.
- Two or more founders: an FZCO or FZ-LLC, with a shareholders' agreement covering transfers, voting and exits.
- Selling mainly to UAE customers or bidding for government work: a mainland LLC. See our free zone vs mainland comparison.
- An existing company expanding into the UAE: consider a branch or a new subsidiary.
For costs by zone, see the cheapest business licence in the UAE.
How CorpWise helps
We match your activity, number of shareholders and visa needs to the right zone and legal form, then handle the licence, visas and bank account. Free zone setup starts from AED 12,500 and mainland from AED 35,000. Talk to an advisor.
