An FZE has one shareholder, an FZCO has two to fifty, and an LLC is the standard mainland company, with one owner or up to fifty. All three limit your liability to your capital. The real differences are how many owners you have and where you trade.
- FZE (Free Zone Establishment): one shareholder, licensed by a free zone authority.
- FZCO (Free Zone Company): several shareholders, licensed by a free zone authority.
- LLC (Limited Liability Company): one to fifty owners, licensed on the mainland by DET in Dubai.
What is an FZE?
An FZE lets a single shareholder form a free zone company. The shareholder can be an individual or a corporate entity, and the company’s liability stays limited to its paid-up capital. A free zone authority licenses it and sets its own rules. Jafza, for example, states that its zone has no foreign ownership restrictions.
Best fit: a solo founder who wants a free zone licence.
What is an FZCO?
An FZCO suits a business with more than one owner. At Jafza, an FZCO can have two to fifty shareholders, individuals or companies in any mix, and liability stays limited to paid-up capital. The Dubai government describes the FZCO as needing at least two shareholders.
Best fit: partners, or a founder and an investor, who want a free zone licence.
What is an LLC?
An LLC is a mainland company in which each partner’s liability stops at their share of the capital. Federal Decree-Law No. 32 of 2021 on Commercial Companies sets the structure. It allows two to fifty partners, and it also lets one person, whether an individual or a company, form and own an LLC.
Foreign investors can own an LLC, and the Dubai government says most activities allow 100% foreign ownership. Restricted sectors need an Emirati partner. An LLC has no territorial restriction on where it trades in the UAE or the GCC.
Best fit: founders whose main market sits on the mainland.
How do FZE, FZCO and LLC compare?
| FZE | FZCO | LLC |
Owners | One | Two to fifty at Jafza | One, or two to fifty |
Liability | Limited to paid-up capital | Limited to paid-up capital | Limited to share in the capital |
Licensed by | Free zone authority | Free zone authority | DET in Dubai |
Mainland trade | Needs a DET licence or permit | Needs a DET licence or permit | Direct |
Free zones can also offer a private LLC of their own, with two to fifty shareholders according to the Dubai government. The names and details vary by zone, so read an FZ-LLC as a free zone form, not a mainland LLC.
The Commercial Companies Law lists five company forms: joint liability, limited partnership, limited liability, public joint stock and private joint stock. This guide compares the FZE, FZCO and LLC, the three forms founders weigh most often.
How do you pick the right structure?
- Count your owners. One owner points to an FZE or a single-owner LLC. Two or more owners point to an FZCO or an LLC.
- Decide where your clients sit. An LLC trades on the mainland directly. A free zone company needs a DET licence or permit first.
- Decide which authority licenses you. A free zone authority licenses an FZE or FZCO. DET licenses a mainland LLC.
- Plan for mainland access. A Dubai free zone company can serve the mainland with a DET licence or permit under Executive Council Resolution No. 11 of 2025.
- Think about partners. An FZE has a single shareholder by definition, so a founder who expects partners should weigh an FZCO or an LLC.
RVG sets up companies in free zones and on the mainland.
What mistakes do founders make when they pick a legal structure?
- Treating FZE and FZCO as different liability levels. Both limit liability to paid-up capital.
- Choosing an FZE and expecting to add partners. An FZE has a single shareholder.
- Assuming a free zone company trades freely on the mainland. It needs a DET licence or permit first.
- Assuming all zones share one rulebook. Each free zone authority sets its own rules and names its company forms its own way.
- Assuming a mainland LLC always needs a local partner. Most activities allow 100% foreign ownership, and only restricted sectors need an Emirati partner.
Frequently asked questions
What is the difference between an FZE and an FZCO?
What does LLC mean in the UAE?
Can one person own an LLC?
Can a foreigner own 100% of an LLC?
Can an FZE or FZCO trade on the mainland?
Which structure suits a solo founder?
Choosing your structure with RVG
If you want a second opinion on which structure fits your plan, the RVG team can walk you through it before you apply.
