LLC vs FZ-LLC: Which UAE Company Structure?
LLC and FZ-LLC differ sharply in ownership, setup cost, tax rules, and banking access. This guide shows which structure fits your 2026 UAE business plan.
Ownership and Control Rules
In a mainland LLC you can hold 100 percent ownership in most sectors since 2021. A free zone FZ-LLC also allows 100 percent foreign ownership, yet its licence restricts activities to the zone or to permitted international markets. Choose the structure that matches where you will actually sell or operate.
Setup Costs and Timeline
A mainland LLC costs AED 15,000 to AED 30,000 in 2026, including trade licence, memorandum, and visa allocation. An FZ-LLC starts at AED 12,000 in cheaper zones such as RAKEZ and reaches AED 40,000 in premium zones such as DMCC or IFZA. Mainland approval usually takes 5 to 10 working days; free zone packages finish in 3 to 7 days once documents are submitted.
Tax and Compliance
Both structures pay the same 9 percent corporate tax on profits above AED 375,000. Free zone entities can keep 0 percent tax on qualifying income if they meet substance rules and file audited accounts with the zone authority. Mainland companies must register for corporate tax and may face additional municipality fees in certain emirates.
Banking and Currency Access
Local banks open accounts faster for mainland LLCs because they operate under full UAE commercial law. Free zone companies can open accounts but often face extra KYC checks and higher minimum balances of AED 50,000. Both structures receive full access to AED and foreign currency transfers.
Visa Quotas and Office Rules
A mainland LLC receives two investor visas with a 100 square metre office; extra visas cost AED 3,000 each. FZ-LLC packages bundle 3 to 6 visas and include a flexi-desk or warehouse as standard. If you need staff inside Dubai city limits, mainland gives simpler labour approvals from MOHRE.
Choosing the Right Fit
Pick a mainland LLC when you need direct access to government tenders or on-shore clients. Choose an FZ-LLC when you want lower entry costs, faster setup, and mainly export or online sales. Speak with a licensed consultant to confirm your activity list before you file.
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Frequently asked questions
Can I convert an FZ-LLC to a mainland LLC later?▾
Yes, you can migrate after settling zone fees and obtaining DED approval, usually within 30 days.
Do both structures pay 9 percent corporate tax?▾
Yes, both pay 9 percent on taxable profits above AED 375,000 from June 2023 onward.
Which structure allows home-based operations?▾
Only a mainland LLC with a home office permit in approved residential zones.
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