Freezone Company, Freezone LLC in Dubai- what are the key differences between them?
After considering the rising interest of capitalist across
the world, State Government of Dubai has taken several purposeful steps not
only to provide plenty of business opportunities but also flexibility to
establish commercial setups and enterprises easily. Formation of free economic
zones in Dubai and UAE is an example of efforts made by State authorities.
Currently, UAE possesses more than 22 free zones to facilitate international
business startups. These zones possess more than 10,000 foreign companies.
However being the business hub of UAE, Dubai houses the largest number of such
setups.
Since the inception of this concept, it has been used
internationally as a model to promote business and trade. The primary aim to
set up FZ in Dubai is to attract genuine trading and successful export
companies to inaugurate their setups in the city. These zones allow
entrepreneurs to set up two main kinds of corporate entities called Freezone Company in Dubai and Freezone
Company (FZCO or FZ-LLC). Traders are free to choose any kind of enterprise
infrastructure according to their needs.
Free Zone firms are independent entities/ establishments
owned by an individual shareholder, corporate shareholder or mixture of both
whereas LLC is defined as an entity/group which is neither a sole ownership of
a candidate nor a true corporation. Rather it essentially has two or more
shareholders.
What are the key differences between the FZ & FZ-LLC?
• They can be
primarily differentiated on the number of shareholders. FZ are the
establishments with single shareholder (a person/a company) in contrast to
those FZ-LLC companies are actually Limited Liability Companies with two or
shareholders. Both of them have unique operating benefits. Share capital
requirements for FZ-LLC totally depend on the zone in which it is located.
• Besides this, a
FZ- corporation can be used to open a Branch of another firm because the branch
is not new firm rather it’s an extension of a parent business. But branches
that are located outside economic zones can never be called as FZE, FZCO or
FZ-LLC.
• FZ-LLCs are the
companies with 2-5 shareholders that are located in F zone. In addition to 100%
ownership to foreign shareholders, it offers not only the flexibility to
conduct business across the UAE but also on an international scale. The
infrastructure supports a wide range of commercial, professional and industrial
licenses.
Is
there any difference in share capital?
Irrespective of their types FZ or FZ-LLC, all the
enterprises open in free zones will need solvency to deposit share capital
amount. They have to open a bank account in UAE licensed bank in the name of
the new organization. Soon after the amount is deposited, a bank statement is
then issued to show Free Zone Authorities to process enterprise setup process.
Once the legal process of establishing a company is completed, the deposit is
released and can be utilized or save for the future. Although initial amount
may vary between zones and purpose of business, generally, the amount ranges
from AED 50,000 to AED 300,000 (approximately USD $13,600 to $82,000) for the
majority of the F zones across UAE.
Is it
necessary to establish a standard office setup?
Similar to other setups, free-zone companies also require
physical office within the premises of specific free zone area. Almost all
zonal authorities offer hot-desk and virtual offices for enterprises that do
not need a full fledge office setup.
Summary: These are the few key difference between the major company
infrastructures of free
zone companies in Dubai. To ensure maximum benefits choose them
wisely.
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