FZE vs FZCO vs Free Zone Branch: Which Legal Form to Choose (2026)

Last Updated: September 2026. Every zone row below was checked against the authority's own regulation or website in September 2026, and the rows that could not be confirmed that way are labelled as such rather than stated as fact.

Nine pages hold the front page for "FZE vs FZCO". Eight of them describe the two forms as though every UAE free zone offered both, and one states outright that the structures are "standardised across all UAE free zones". That sentence is now wrong. The Dubai Integrated Economic Zones Authority abolished the FZE by regulation: Regulation 8.2 of the DIEZ Implementing Regulations 2023 says that "An FZE is recognised as an FZCO under these Regulations" [1]. DMCC stopped letting newly registered companies use the FZE suffix on 2 January 2025 [3]. Meydan Free Zone never used either term in the first place [4].

So the real answer to FZE vs FZCO vs free zone branch is not a shareholder-count answer. It is a zone answer. The form you are allowed to have depends on which authority licenses you, and the federal government says so itself: the Ministry of Economy and Tourism lists only three generic free zone forms and tells founders to check with "the concerned body of every free zone individually" [16]. U.AE lists five and adds that not all free zones register all types [15].

Since 2013, BusinessDubai.ae has registered companies across UAE free zones, so the table below is built from each authority's own text rather than copied from other guides. This guide covers which zones still issue an FZE, what DIEZ, DMCC and Meydan use instead, shareholder limits, share capital and whether it must be deposited, visa quota, banking, corporate tax, audit, conversion between forms, and what each route costs in 2026.

Is FZE still a current legal form in every UAE free zone?

No. FZE is a current formation type at JAFZA, IFZA, RAKEZ, SPC Free Zone, Ajman Free Zone, Hamriyah and SAIF Zone, and it is gone at the three Dubai Integrated Economic Zones sites and at DMCC for new company names. Meydan Free Zone never used the term at all.

That single fact rewrites the question most founders arrive with. "FZE or FZCO" assumes both doors are open and that the only thing standing between them is how many shareholders you have. At DAFZA, Dubai Silicon Oasis and Dubai CommerCity the FZE door is bricked up by regulation, and a single shareholder walks through the FZCO door instead [1]. At DMCC a single shareholder company still exists, but it cannot be called an FZE if it was registered after 2 January 2025 [3].

Two different mechanisms produced the same outcome, which is why it is easy to miss. DIEZ removed the form itself. DMCC removed the name. A page written in 2024 and lightly refreshed in 2026 will show neither, because neither change appears in a price list.

Common Mistake: Asking a consultant for "a DSO FZE" and assuming the quote you get back is for one. Dubai Silicon Oasis no longer issues FZEs, and legacy FZEs were converted to FZCOs under the 2023 regulations [2]. If the proposal still says FZE, the consultant is working from an old template, which tells you what else on that proposal has not been checked recently.

Which UAE free zones still offer an FZE, and which have retired it?

FZE survives at JAFZA, IFZA, RAKEZ, SPC Free Zone and Ajman Free Zone on each authority's own published material, and is reported as current at Hamriyah and SAIF Zone. It is abolished across DIEZ, retired as a name at DMCC, and never existed at Meydan, DIFC or ADGM, which use entirely different vocabulary.

This is the table nobody publishes. The last column matters as much as the others: it says whether the row comes from the authority's own regulation or website, or from secondary aggregation that you should confirm with the zone before you rely on it.

Read the table as three groups rather than sixteen rows. Group one is the zones where FZE is dead or was never born: DIEZ, DMCC, Meydan, DIFC and ADGM. Group two is where FZE is alive and the classic one-shareholder-versus-several logic applies: JAFZA, IFZA, RAKEZ, SPC and Ajman. Group three is the four rows you should confirm before quoting: SHAMS, Hamriyah, SAIF Zone and Dubai South. Our free zone company setup page prices the live packages in group one and group two side by side, so you can see what the form choice does and does not change.

Based on our experience: The zones in group three are not unreliable, they are simply quiet. Hamriyah, SAIF and SHAMS publish less than Dubai zones do, and the consultancy pages filling that silence agree with each other because they copy each other, not because anyone confirmed the figure. When we need a Sharjah number for a client file we ask the zone in writing and keep the reply. If you are looking at Sharjah, our business setup in Sharjah page shows what the emirate's zones actually cost today.

Why did DIEZ abolish the FZE at DAFZA, Dubai Silicon Oasis and Dubai CommerCity?

The Dubai Integrated Economic Zones Authority rewrote its company law in 2023 and reduced the corporate forms to two. Regulation 8.1 of the DIEZ Implementing Regulations 2023 lists an FZCO and a PLC. Regulation 8.2 then absorbs the old form: "An FZE is recognised as an FZCO under these Regulations" [1].

The practical effect is that a single shareholder is no longer a reason to have a different kind of company. Regulation 16.2 allows an FZCO to have "one or more Shareholders" with no stated maximum, so the FZCO covers the whole range from a solo founder to a large shareholder group [1]. The FZE was made redundant rather than banned, and the regulation folded the existing ones in rather than forcing a re-registration.

The capital rules in the same regulation are the part that surprises people. An FZCO has a minimum share capital of AED 1, of which 25% must be paid up. A PLC has a minimum of AED 250,000, also 25% paid up [1]. A branch has no shareholders at all under Regulation 17.2, which is the cleanest statement of what a branch is that exists in UAE free zone law [1].

That AED 1 figure is the single most useful number in this article, and it is also the one most often contradicted in the market. Our guides to DAFZA free zone setup and Dubai Silicon Oasis setup walk through what each zone charges once the form question is settled.

Common Mistake: Being quoted AED 100,000 or AED 50,000 of "required share capital" for a Dubai Silicon Oasis company. The DIEZ regulation in force sets an FZCO minimum of AED 1 [1]. Higher figures circulating in the market come from older fee sheets and from banks, which is a different conversation: a bank may want to see money in an account, but that is a banking preference, not a registration requirement. Ask which of the two you are being told.

Why does DMCC no longer let a new company call itself an FZE?

DMCC changed its naming convention rather than its company law. Since 2 January 2025, every newly registered DMCC company other than a branch must carry the "FZCO" suffix, and branches carry "FZ Branch". Existing companies could use either suffix during an 18-month transition that ends on 30 June 2026 [3].

This matters more than a naming note because DMCC is one of the most-searched zones in the country, and the change means a founder cannot register a "DMCC FZE" today no matter how many shareholders the company has. A single shareholder company is still perfectly possible. It is simply called an FZCO on the licence and on every document a bank, a customs agent or an investor will ever read.

The transition deadline is the part to diary. Once 30 June 2026 has passed, a company still using the old suffix in its paperwork is out of step with its own trade licence, and that mismatch is exactly the kind of thing that stalls a bank onboarding or a tender submission. Our DMCC free zone setup guide covers the zone's wider requirements.

Pro Tip: If you hold a pre-2025 DMCC company, check your bank mandate, your customs code registration, your supplier contracts and your website footer for the old suffix before the transition closes. Updating a trade licence is the easy part. Updating every counterparty that has your old name on file is the part that takes weeks, and nobody sends you a reminder.

What legal forms does Meydan Free Zone actually offer?

Meydan Free Zone recognises two forms and neither is called an FZE or an FZCO. Its regulations define a "Company" and a "Branch", set shareholders at a minimum of one and a maximum of 100, mandate no minimum share capital, and confirm that the UAE Federal Commercial Companies Law does not apply inside the Authority [4].

Three things follow from that. First, any quote offering you a "Meydan FZCO" is using market shorthand for something Meydan does not call by that name, which is harmless in conversation and misleading in a document. Second, the 100-shareholder ceiling is unusually generous, which matters if you are planning an employee share scheme or a friends-and-family round. Third, your shareholder rights come from Meydan's own regulations, not from federal company law, so the remedies you are used to reading about elsewhere may not be the ones you have.

Meydan also makes a point that clears up a lot of confused searching: it states that "subsidiary" is not a legal entity type in the UAE [4]. A subsidiary is a relationship between two companies, not a form you can tick on an application. What you actually register is a company, and the fact that another company owns it is what makes it a subsidiary. Our Meydan free zone setup guide and the IFZA vs Meydan comparison cover the cost side of that choice.

Real Talk: If you are choosing between Meydan and a zone that still uses FZE and FZCO labels, the labels should not decide it. A Meydan "Company" with one shareholder does the same commercial job as a JAFZA FZE. What differs is price, visa cost per head, activity fit and which authority handles your amendments. Deciding on vocabulary is how founders end up in the wrong zone with the right-sounding licence.

What is the difference between an FZE and an FZCO where both still exist?

At the zones that still use both labels, the difference is shareholder count and nothing else of substance. An FZE has exactly one shareholder. An FZCO, also written FZC or FZ Co. depending on the zone, has two or more, with a ceiling that runs from 5 at SPC Free Zone to 50 at JAFZA [5][10].

Both are limited liability companies with separate legal personality. Both can be owned 100% by foreign individuals or by foreign corporate shareholders. Both get the same trade licence classes, the same visa mechanics and the same corporate tax treatment. Neither gives you anything the other does not, other than room for more names on the share register.

The one variable worth checking before you sign is the ceiling, because it differs by a factor of ten across zones that describe their forms in almost identical language.

A ceiling of 5 is not a problem until it is. It becomes one the first time you want to bring in three angel investors, an advisor and a co-founder's holding company in the same round. Our minimum capital for a Dubai company guide covers the capital half of the same decision.

Quick Math: At SPC Free Zone the 1-visa package is AED 14,255 and at JAFZA-class Dubai zones a 1-visa package runs AED 21,050 to 21,400 [18]. SPC saves roughly AED 6,800 in year one. If your cap table will hold six names within three years, that saving buys you a restructuring you did not budget for, because SPC's FZCO caps at 5 shareholders [10]. Cheap is only cheap if the form survives your plan.

What is a free zone branch, and when does it beat an FZE or FZCO?

A free zone branch is the same legal person as its parent, extended into the zone. It has no shareholders and no share capital of its own, which DIEZ Regulation 17.2 states plainly [1]. It carries the parent's name, is limited to activities the parent already holds, and leaves the parent liable for everything the branch does.

That is a real disadvantage and a real advantage at the same time. The disadvantage is liability: there is no firewall, because there is no second legal person to put one between. The advantage is that the branch inherits the parent's trading history, which is precisely what a bank, a landlord or a tender committee is looking for when a brand-new company has nothing to show.

Against an FZE or an FZCO, a free zone branch wins in three situations. When the parent has audited accounts and a track record you want the UAE entity to borrow. When the UAE work is genuinely an extension of the parent's existing contracts rather than a new business. And when you need to be trading quickly and do not want to constitute a new company, appoint directors and issue shares first.

It loses in most other situations, and the reason is narrower than people expect: a branch cannot pick its own activities. It mirrors the parent. If your UAE plan involves doing something the parent does not already do, the branch route is closed before you start.

This article treats the branch only as a third option against an FZE and an FZCO inside a free zone. For the wider question of whether a foreign company should open a branch or incorporate a separate UAE company at all, including the tax-treaty and liability analysis, read our guide to branch versus subsidiary in the UAE.

Common Mistake: Registering a branch because it looked cheaper, then discovering the activity you actually wanted to sell is not on the parent's licence. Amending a foreign parent's objects to fix that is slow, expensive and sometimes politically impossible inside a group. Check the activity list against the parent's constitutional documents before the branch application, not after.

How much share capital do you actually need, and does it have to be deposited?

There is no single UAE answer, and a figure quoted without a zone attached is meaningless. DIEZ sets an FZCO minimum of AED 1 with 25% paid up [1]. IFZA and SPC Free Zone require no paid-up capital [8][10]. JAFZA has had no prescribed minimum since 2017 [5]. A DIFC Public Company needs USD 100,000 [12].

Look at that spread as one range and it is the most striking number in UAE company law. Inside one country, for broadly the same concept of a company with shares, the minimum runs from AED 1 to USD 100,000. That is a difference of more than nine hundred times, and it depends entirely on which authority you walk into.

The old AED 1,000,000 FZE minimum that still appears on some pages was removed at JAFZA in 2017 [5]. Any 2026 article still quoting it has not been updated in nine years, which is a useful test to run on any page you are reading, including this one. Our free zone company setup and mainland company setup pages give the real cash requirement for each route, which is the package price rather than a capital figure.

Real Talk: Declared share capital and cash you need are two separate things, and conflating them is the commonest cost mistake in this market. At IFZA and Meydan the investor visa route requires the shareholder to show a minimum of AED 75,000 in a bank account, in the UAE or at home [18]. That is a bank and immigration requirement, not a share capital rule, and it will not appear anywhere on a company formation page. Plan for it before you pay for the licence.

Does JAFZA really have a fifth legal form?

Yes. Alongside the FZE, the FZCO and the branch, JAFZA publishes a guide to setting up a Public Listed Company, describing the PLC as a company type that can be established within Jebel Ali Free Zone [6]. No competitor page in the ranking set mentions it, and most JAFZA guides, including earlier BusinessDubai.ae material, list four forms.

A PLC is not the right answer for most readers of this article. It exists for a company intending to offer shares more widely, and it brings governance and disclosure obligations that a two-founder trading company has no use for. It matters here because it shows how thin the standard "FZE or FZCO" framing is: at the UAE's oldest major free zone there are four choices and two of them are never discussed.

One caution on sourcing. The JAFZA PLC guide page itself carries a 2021 date, so confirm the current requirements with JAFZA before building a plan around it. The form's existence is well evidenced. The detailed shareholder and capital requirements are not published on the same page. Our JAFZA free zone setup guide covers the zone's mainstream routes.

Based on our experience: Almost nobody who asks about a free zone PLC actually needs one. What they usually need is a holding structure with several shareholders and clean share transfer mechanics, which an FZCO handles perfectly well at JAFZA's 50-shareholder ceiling. Our guide to holding company setup in Dubai covers that structure properly.

Why does DIFC no longer have an "LLC"?

Because its amended Companies Law removed the label. Under DIFC Law No. 5 of 2018, as amended, the DIFC recognises a Private Company using the suffix "Ltd", a Public Company using "PLC", and a Recognised Company, which is the branch of a non-DIFC entity [12]. There is no DIFC LLC, and any page describing one is quoting the pre-amendment regime.

The stale label travels with a stale number. A great deal of live content still quotes a USD 50,000 minimum share capital for a DIFC company. That minimum was removed by the amendment: a DIFC Private Company now has no minimum share capital, and it is the Public Company that carries a minimum of USD 100,000, paid up to at least one quarter of its value [12].

If you are comparing the DIFC against a mainstream free zone, the form vocabulary is the least of the differences. The DIFC is a separate common law jurisdiction with its own courts, its own registrar and its own regulator for financial services. Our DIFC business setup guide covers what that actually costs and who it suits.

Common Mistake: Budgeting USD 50,000 of share capital for a DIFC private company because a 2019 article said so. The figure is gone, the label it attached to is gone, and carrying both into a business plan makes every number downstream of it wrong. Check the DIFC Registrar of Companies page for the current entity list before you model anything [12].

What does ADGM offer, and does its PLC really need two shareholders?

ADGM offers the widest set of forms of any UAE jurisdiction: a Public Company Limited by Shares, a Private Company Limited by Shares, a company limited by guarantee, a restricted scope company, unlimited companies, branches of foreign companies, and the partnership forms including LLPs [13]. Its PLC requires a minimum of one shareholder, not two.

That last point corrects a claim repeated across a lot of UAE setup content. The ADGM Registration Authority's own legal entity types guidance puts the PLC minimum at one shareholder, which can be an individual or a body corporate, with a minimum share capital of USD 50,000. An ADGM LTD also requires one shareholder and carries no minimum share capital [13].

One honest caveat on that source: the published guidance document carries a 2017 version date. The underlying ADGM Companies Regulations framework has not been reported as replaced, but a document that old deserves a direct check with the Registration Authority before you rely on the shareholder or capital figures in a filing. Our ADGM company setup guide sets out the practical route.

Does your legal form change your liability and legal personality?

Yes, and this is the one difference that is genuinely structural rather than administrative. An FZE and an FZCO are separate legal persons with limited liability, so shareholder exposure stops at the capital committed. A free zone branch is not a separate legal person at all, so the parent carries every obligation the branch takes on [1].

Between an FZE and an FZCO there is no liability difference whatsoever. Both are limited. The number of shareholders does not change the strength of the corporate veil, and no UAE free zone applies a different liability rule to a one-shareholder company than to a five-shareholder one.

Where founders get caught is not the form, it is the personal guarantee. A new free zone company with no trading history often cannot get a lease, a credit facility or a trade finance line without the shareholder signing personally. At that point the limited liability you paid for is limited only against the creditors who did not ask for a signature. That is a commercial reality of being new, not a defect in the form.

Real Talk: If the reason you are choosing between an FZE and an FZCO is liability protection, you are solving the wrong problem. Both protect you identically. What actually determines your exposure is whether you sign personal guarantees, whether you keep company and personal money separate, and whether the company is adequately capitalised for what it is trading. A second shareholder adds nothing to any of those three.

Does the legal form change your visa quota?

Not directly. UAE free zone visa quota is set by your office or facility tier and by the zone's own allocation rules, not by whether the licence says FZE, FZCO or branch. A one-shareholder company on a flexi-desk and a three-shareholder company on the same flexi-desk get the same allocation at the same zone.

Where the form does bite is on who can hold an investor visa. Shareholders can be sponsored as investors or partners; a branch has no shareholders, so its residency route runs through the branch manager and employees rather than an investor category. That is a meaningful difference for a founder whose whole reason for setting up is residency.

The second-order effect is cost, and it is the one worth modelling. Packages are priced by visa count, not by legal form. Adding a second shareholder is usually free at the package level; adding a second visa is not.

Those are the package prices BusinessDubai.ae transacts at in 2026, and the pattern in the last column is the one to plan around [18]. Two co-founders who both want residency should compare the second-visa column before they compare anything else. If the business will never need a Dubai address, our business setup in Ajman page shows what the emirate's packages include.

Check your visa quota and costs→

Does the legal form change whether a bank opens your account?

Not by itself, but it changes the file the bank reads. An FZE with one shareholder is the simplest possible ownership chain and usually the fastest to clear compliance. An FZCO with several corporate shareholders in several countries takes longer, because the bank has to trace ultimate beneficial ownership through every layer before it can say yes.

A branch sits differently again. It banks on the parent's standing, which is an advantage if the parent is established and audited, and a problem if the parent is a dormant holding company in a jurisdiction the bank treats as high risk. In that case the branch inherits the difficulty rather than the credibility.

There is no fully remote account opening in the UAE. The signatory has to be present and the bank has to see the business. WIO and Mashreq Neo open readily for free zone companies and are where most single-shareholder files land, while traditional branch banks apply more scrutiny to flexi-desk companies regardless of form.

Based on our experience: The decline reason we see most often has nothing to do with FZE versus FZCO. It is a mismatch between the activity on the licence and the invoices in the pack, such as a general trading licence presented with consultancy invoices. The second most common is an FZCO whose corporate shareholder sits two layers up in a jurisdiction the bank will not trace. Both are fixable at licensing stage and expensive afterwards.

How is each form taxed under UAE corporate tax?

An FZE and an FZCO are taxed identically: 0% to AED 375,000 and 9% above, unless the company is a Qualifying Free Zone Person, which pays 0% on Qualifying Income and 9% on the rest with no nil-rate band [17]. A branch of a foreign parent is treated differently, and that difference is usually stated wrongly.

Here is the precise position. A branch has no separate legal personality, which many guides then convert into "so it is not taxed separately". That does not follow. Under the UAE corporate tax regime a foreign company with a branch in the UAE is a Non-Resident Person with a Permanent Establishment here, and it is a Taxable Person on the income attributable to that Permanent Establishment [14]. Legal personality and tax personality are two different tests, and the branch fails the first while meeting the second.

Small Business Relief runs for tax periods ending on or before 31 December 2029 under Ministerial Decision No. 131 of 2026, which amended the earlier decision and moved a deadline many pages still show as 2026 [17]. The QFZP de minimis threshold for non-qualifying revenue is the lower of 5% of revenue or AED 5,000,000 under Ministerial Decision No. 229 of 2025 [17]. Neither of those turns on whether you chose an FZE or an FZCO.

Quick Math: A two-founder consultancy billing AED 1,400,000 with AED 500,000 of costs has AED 900,000 of profit. As an FZCO electing Small Business Relief, the tax is nil. As a Qualifying Free Zone Person on non-qualifying consultancy income, 9% applies from the first dirham with no AED 375,000 band, about AED 81,000 [17]. The legal form changed nothing. The tax election changed AED 81,000.

Does your legal form decide whether you need an audit?

No. Audit obligations follow the zone's own rules and your tax status, not the FZE or FZCO label. A Qualifying Free Zone Person needs audited financial statements at any revenue level, and an ordinary taxable person crosses into a mandatory audit at AED 50,000,000 of revenue [17]. Shareholder count plays no part.

Most zones also require audited accounts at licence renewal regardless of the federal position, and the requirement varies by zone rather than by form. JAFZA and DMCC have historically been stricter on this than the low-cost zones, which is a genuine cost difference between zones that never appears in a package comparison.

The branch position is different again, because a branch's accounts are part of its parent's accounts. What the zone wants to see at renewal is usually the parent's audited financial statements, which means a branch of a parent that does not get audited at home creates a problem that has no cheap fix.

Year two is when this lands, along with the licence renewal, the UBO update, the corporate tax return and the visa renewals, all within a few months of each other. Our post-setup services team runs that calendar so it does not arrive as a surprise.

Pro Tip: Ask the zone for its audit requirement in writing before you choose it, and ask specifically whether it applies at renewal or only above a revenue threshold. An audit on a small company costs real money every year and it is entirely invisible in the year-one package price that most founders decide on.

Can you convert from an FZE to an FZCO later?

At JAFZA, yes, and it is a defined process rather than a favour. JAFZA states that a company registered as an FZE or an FZCO may convert to either type, with fees from AED 50 to AED 5,000 and a processing time of 21 working days [7]. Most other zones treat it as a shareholder amendment.

That is the answer to the anxiety behind most FZE-versus-FZCO questions. Founders agonise over the choice because they assume it is permanent. At the zones that still use both labels it usually is not, and the cost of being wrong is an amendment fee and three weeks, not a new company.

Two conversions are genuinely hard, and it is worth knowing which. Converting a branch into a company is not an amendment at all, because there is no legal person to convert: you incorporate a new entity and wind the branch down, duplicating the setup cost. And moving between zones is a new registration in the new zone, not a transfer.

There is a useful commercial point on zone moves. Switching partner or zone costs what a new package costs, with no separate switching penalty [18]. If your current zone no longer fits, the arithmetic is simply the new package price, which is often less frightening than founders assume.

Pro Tip: If you are undecided between one shareholder and two, start with one and add the second later where the zone allows the conversion. A conversion is a known fee and a known timeline. Unwinding a shareholder who turned out to be the wrong partner is neither, and it is the more expensive of the two mistakes by a wide margin.

What does each route actually cost in 2026?

The legal form itself is close to free. Dubai free zone packages run AED 12,500 to 12,900 licence-only and AED 21,050 to 21,400 with one investor visa, and most bundle three shareholders into that price, so choosing an FZCO over an FZE costs nothing [18]. Visas, office tier and year two are what cost money.

The table below itemises a Dubai free zone company against a Dubai mainland company on the same basis, because that is the comparison a founder is really making once the form question is settled.

Read the table and the form question shrinks. The difference between an FZE and an FZCO is AED 0 in most packages. The difference between one visa and two is AED 3,200 to AED 6,550 depending on zone, and the difference between Dubai and Ajman on a 1-visa basis is roughly AED 8,000 [18]. Those are the numbers that should drive the decision. Our free zone company setup page itemises each package including the year-two line.

Get an itemised quote across zones→

Which legal form should you choose for your situation?

For a single founder, an FZCO at a DIEZ zone or an FZE where the label survives, which are the same company. For two or more founders, an FZCO whose shareholder ceiling clears your three-year plan. For a foreign company, a branch only if the activities match the parent. For a group, a company owned by the parent.

The table sets out the five profiles that cover almost every enquiry we receive, with the trap that catches each one.

One route sits outside this table. If you only need a vehicle to invoice clients abroad and you do not need UAE residency, a free zone company may be more than you need, and our offshore company formation team can price the lighter structure against a free zone licence. The federal picture behind all of this is covered in our guide to the UAE Commercial Companies Law, and the two most-compared Dubai zones are priced in our IFZA free zone setup guide.

Real Talk: If you are stuck between an FZE and an FZCO at the same zone, take the FZE and move on. It is one shareholder, it converts, and the decision is worth less than a single afternoon of your time. The decisions that are worth agonising over are the zone, the activity list and the visa count, because those are the ones that are expensive to reverse.

Real Client Stories

These are real examples from businesses we have helped set up. Names have been changed for privacy.

The founder who ordered an FZE and received an FZCO

An Indian ecommerce founder came to us mid-process, holding a proposal for a "Dubai Silicon Oasis FZE" from another consultant and a licence that said FZCO. He assumed he had been given the wrong product and had spent two weeks trying to get it changed. Nothing was wrong. DIEZ abolished the FZE in its 2023 regulations and recognises every FZE as an FZCO, so a single shareholder at DSO gets an FZCO licence and always will. His reaction: "I lost a fortnight arguing about a word because the company selling it to me had not read the regulation it was selling under."

The UK engineering group whose branch could not sell what it came to sell

A British engineering group opened a free zone branch to win UAE maintenance contracts, on the reasoning that the branch would inherit twenty years of audited accounts for the bank and the tender panel. It did, and the bank account opened quickly. The problem arrived at the first tender, which required a training and certification activity the UK parent did not hold. A branch mirrors its parent, so the activity could not simply be added in Dubai. Amending the parent's objects took four months. Their finance director: "We chose the branch for the credibility and forgot it also inherits the limits."

The two consultants who hit a five-shareholder ceiling

Two Egyptian management consultants set up an FZCO at a Sharjah free zone on price, saving roughly AED 6,800 against a Dubai package in year one. Eighteen months later they agreed terms with three angel investors and an advisor, which would have taken the share register to seven names. Their zone caps an FZCO at five shareholders, so the round could not close in that entity. They moved the business to a Dubai zone at full package price, and the move cost more than the original saving. One of them told us: "We optimised the cheapest year and paid for it in the year that mattered."

Choose the form that fits the zone, not the zone that fits the form

Three things decide this, and the FZE-versus-FZCO question is not one of them. The first is whether your chosen zone still issues the form you are asking for, because DIEZ abolished the FZE, DMCC retired the name and Meydan never used it. The second is the shareholder ceiling, which runs from 5 to 100 across zones that describe their forms in nearly identical words. The third is your visa count, which is where all the real money sits.

Anything a page tells you about UAE free zone legal forms that is not attached to a named zone and a dated source is a guess. That is why the table in this guide carries a source column, and why four of its rows say to confirm with the zone rather than pretending to a certainty nobody has published.

BusinessDubai.ae has completed 700+ company registrations across the UAE since 2013, with itemised pricing and no hidden fees. We will price a free zone company setup against a mainland company setup on the things that actually differ for your plan, which are shareholder room, visa cost per head and what year two looks like, and our post-setup services team handles the renewals, UBO filings and tax registrations once the licence is live.

Talk to a setup expert→

Frequently Asked Questions

What is the difference between an FZE and an FZCO?

An FZE is a free zone company with exactly one shareholder and an FZCO is the same kind of company with two or more. Both have limited liability and separate legal personality. The maximum number of shareholders in an FZCO varies by zone, from 5 at SPC Free Zone to 50 at JAFZA as of 2026.

Can I still register an FZE in Dubai Silicon Oasis?

No. Dubai Silicon Oasis no longer issues new FZEs. Under the DIEZ Implementing Regulations 2023, an FZE is recognised as an FZCO, and legacy FZEs were converted automatically. A single shareholder at Dubai Silicon Oasis receives an FZCO licence.

Does DMCC still offer an FZE?

Not by that name. Since 2 January 2025, every newly registered DMCC company other than a branch must use the "FZCO" suffix, and branches use "FZ Branch". A single-shareholder DMCC company is still possible; it is simply called an FZCO. Existing companies had an 18-month transition that ends on 30 June 2026.

What legal forms does Meydan Free Zone offer?

Meydan Free Zone recognises two forms: a "Company" and a "Branch". It does not use the terms FZE or FZCO at all. Its regulations set shareholders at a minimum of one and a maximum of 100, mandate no minimum share capital, and state that the UAE Federal Commercial Companies Law does not apply inside the Authority.

Is "subsidiary" a legal entity type in the UAE?

No. Meydan Free Zone states directly that "subsidiary" is not a legal entity type in the UAE. A subsidiary describes a relationship between two companies, not a form on an application. You register a company, and the fact that another company owns it makes it a subsidiary.

Does JAFZA offer a PLC?

Yes. JAFZA publishes a guide to setting up a Public Listed Company inside Jebel Ali Free Zone, making it a fifth form alongside the FZE, FZCO and branch. The guide page carries a 2021 date, so confirm current requirements with JAFZA before planning around it.

Can I convert an FZE to an FZCO, and how long does it take?

At JAFZA, yes. JAFZA states that a company registered as an FZE or an FZCO may convert to either type, with fees from AED 50 to AED 5,000 depending on the step and a processing time of 21 working days. Most other zones handle the change as a shareholder amendment, so ask your zone for its route in writing.

What is the minimum share capital for an FZE?

There is no UAE-wide answer, and any figure quoted without a zone attached is meaningless. IFZA and SPC Free Zone require no paid-up capital. JAFZA has had no prescribed minimum since 2017. At DIEZ zones the FZE no longer exists and an FZCO has a minimum of AED 1 with 25% paid up.

Is the old AED 1,000,000 minimum share capital for an FZE still real?

No. JAFZA removed the AED 1,000,000 FZE requirement and the AED 500,000-per-shareholder FZCO requirement in 2017. Capital must now be sufficient for the licensed activities. Any 2026 page still quoting AED 1,000,000 as a current requirement has not been updated in nine years.

Do I have to physically deposit my share capital in a bank?

At most free zones, no. IFZA and SPC Free Zone require no paid-up capital, and Meydan mandates no minimum. DIEZ zones require 25% of an FZCO's AED 1 minimum to be paid up. Declared share capital and the cash a bank wants to see are separate things, so confirm which one you are being asked for.

How many shareholders can an FZCO have?

It depends entirely on the zone. JAFZA and RAKEZ allow up to 50. SPC Free Zone caps at 5. Meydan allows 1 to 100 in its "Company" form. The generic "2 to 50" figure repeated across most guides is true at some zones and wrong at others, so check the one you are joining.

Can a company be a shareholder in an FZE or FZCO?

Yes. Corporate shareholders are permitted at the major UAE free zones, including JAFZA, IFZA and SPC Free Zone, and 100% foreign corporate ownership is standard. A bank will want to trace ultimate beneficial ownership through every layer of the chain, so a multi-country corporate structure takes longer to onboard than an individual shareholder.

What is a free zone branch, legally?

A free zone branch is the same legal person as its parent, extended into the zone. The DIEZ Implementing Regulations 2023 state that a branch has no shareholders. It carries the parent's name, is limited to the parent's activities, holds no share capital of its own, and leaves the parent fully liable for its obligations.

Is a free zone branch of a foreign company taxed separately in the UAE?

Yes, for corporate tax purposes, even though it is not a separate legal person. A foreign company operating through a UAE branch is a Non-Resident Person with a Permanent Establishment and is a Taxable Person on the income attributable to that Permanent Establishment. Legal personality and tax personality are different tests.

Can a free zone branch choose its own business activities?

No. A branch mirrors its parent's name and activities. If the UAE work requires an activity the parent does not hold, the branch cannot simply add it, and the fix is amending the parent's objects in its home jurisdiction. Check the parent's activity list before filing the branch application.

Does an FZE or FZCO give better liability protection?

Neither. Both are limited liability companies with separate legal personality, and shareholder count has no effect on the strength of that protection. What actually determines your exposure is whether you sign personal guarantees, whether you keep company and personal funds separate, and whether the company is adequately capitalised for its trading.

Does choosing an FZCO instead of an FZE cost more?

Usually nothing at all. Most UAE free zone packages bundle three shareholders as standard, and RAKEZ and ANC Free Zone include ten, so adding a second shareholder sits inside the price you are already paying. What moves the price is visa count, office tier and activity count, not the legal form.

Does the legal form change my visa quota?

No. Visa quota is set by your office or facility tier and the zone's allocation rules, not by whether the licence says FZE, FZCO or branch. The form does affect who can hold an investor visa: a branch has no shareholders, so its residency route runs through the branch manager and employees instead.

Does DIFC still recognise "LLC" as an entity type?

No. Under DIFC Law No. 5 of 2018 as amended, the DIFC recognises a Private Company ("Ltd"), a Public Company ("PLC") and a Recognised Company, which is a branch of a non-DIFC entity. Any page describing a "DIFC LLC" is quoting the pre-amendment regime.

What is the minimum share capital for a DIFC private company?

None, as of 2026. The former USD 50,000 minimum was removed by amendment to the DIFC Companies Law. The figure still appears on many pages because they have not been updated. A DIFC Public Company is the one that carries a minimum, at USD 100,000 paid up to at least one quarter.

Does an ADGM PLC require two shareholders?

No, one. The ADGM Registration Authority's legal entity types guidance sets the PLC minimum at one shareholder, which may be an individual or a body corporate, with USD 50,000 of share capital. The commonly repeated claim of two shareholders is wrong. The published guidance carries a 2017 version date, so confirm before filing.

Which UAE free zones require no minimum share capital at all?

IFZA and SPC Free Zone publish zero paid-up capital requirements, Meydan Free Zone mandates no minimum in its regulations, and JAFZA has had no prescribed minimum since 2017. DIEZ zones set a nominal AED 1 minimum for an FZCO with 25% paid up, which is effectively the same thing.

Which free zone caps FZCO shareholders at five rather than fifty?

SPC Free Zone publishes a cap of 2 to 5 shareholders for an FZCO. Hamriyah Free Zone and SAIF Zone are reported to cap an FZC at 5, with SAIF reported as extendable to 7 by authority approval, but those two figures come from secondary sources and should be confirmed with the zone.

Does an FZE need an audit?

It depends on tax status and zone rules, not the form. A Qualifying Free Zone Person must have audited financial statements at any revenue level, and an ordinary taxable person crosses into a mandatory audit at AED 50,000,000 of revenue. Many zones also require audited accounts at renewal, and the requirement varies by zone.

Is an FZE or an FZCO better for a Qualifying Free Zone Person claim?

Neither is better. QFZP status turns on your activities, your substance in the zone and the de minimis threshold, which is the lower of 5% of revenue or AED 5,000,000 under Ministerial Decision No. 229 of 2025. Shareholder count plays no part in the test.

Can I move my company from one free zone to another?

Not as a transfer. Moving zones means registering a new entity in the new zone and closing the old one. There is no separate switching penalty, so the cost is simply the new package price. Form the new entity first, move the bank account, then move or cancel the visas, then cancel the old licence.

Does the UAE government publish a single list of which free zone offers which form?

No. U.AE lists five free zone legal forms federally and states that not all free zones register all types. The Ministry of Economy and Tourism lists three generic forms and directs founders to check with the concerned body of every free zone individually. No federal source centralises the zone-by-zone answer.

Why did DMCC change its company name suffix in 2025?

DMCC standardised on a single suffix for newly registered companies. From 2 January 2025, all new registrations other than branches carry "FZCO" and branches carry "FZ Branch". Existing members could use either suffix during an 18-month transition ending 30 June 2026, after which the old suffix is out of step with the licence.

Can I register a free zone company entirely remotely?

The licence, usually yes. Residency and banking, no. Most free zones accept remote incorporation with attested documents, but the investor or employee visa requires biometrics and a medical inside the UAE, and no UAE bank opens a corporate account without the signatory present. Plan at least one trip.

What happens to my existing FZE if my zone retires the form?

Nothing adverse. DIEZ recognised every existing FZE as an FZCO under its 2023 regulations rather than cancelling them, and DMCC gave existing members an 18-month transition on the suffix. The change is administrative, but update your bank mandate, customs registration and contracts so your documents match your licence.

References

[1] Dubai Integrated Economic Zones Authority. Implementing Regulations 2023, including Regulation 8.1 and 8.2 on recognised forms and the recognition of an FZE as an FZCO, Regulation 16.2 on shareholders, Regulation 17.2 on branches, and Regulations 23.2 to 23.4 on minimum share capital. dso.ae

[2] Dubai Silicon Oasis. Licence types and the position that no new FZEs are issued following the 2023 regulations. dso.ae

[3] DMCC. New suffix for DMCC member companies, effective 2 January 2025, with the 18-month transition ending 30 June 2026. dmcc.ae

[4] Meydan Free Zone. Company and branch forms, the 1 to 100 shareholder range, the absence of a minimum share capital, the non-application of the Federal Commercial Companies Law inside the Authority, and the statement that "subsidiary" is not a UAE legal entity type. meydanfz.ae

[5] Jebel Ali Free Zone Authority. Company formation, covering the FZE, FZCO and branch forms, shareholder counts, the activity-mirroring rule for branches, and the removal of the prescribed minimum share capital in 2017. jafza.ae

[6] Jebel Ali Free Zone Authority. How to set up a PLC, confirming the Public Listed Company as a form available within Jebel Ali Free Zone. jafza.ae

[7] Jebel Ali Free Zone Authority. Conversion from FZE to FZCO or FZCO to FZE, including fees from AED 50 to AED 5,000 and a 21 working day processing time. jafza.ae

[8] IFZA. Company formation in Dubai, listing the FZ LLC, FZ Co. and FZE labels with their shareholder counts and confirming no paid-up share capital requirement. ifza.com

[9] RAKEZ. Legal entities, covering the FZ-LLC with 1 to 50 shareholders and the FZE and FZ-LLC licence-name suffixes. rakez.com

[10] SPC Free Zone. FZE and FZCO structures, shareholder counts of 1 and 2 to 5 respectively, and zero paid-up capital requirements. spcfz.ae

[11] Ajman Free Zone. Type of business, listing the FZE, FZC, branch of a local company and branch of a foreign company. afz.gov.ae

[12] DIFC. Registrar of Companies entity types, with the Private Company, Public Company and Recognised Company forms, read alongside published legal summaries of DIFC Law No. 5 of 2018 for the share capital positions. difc.com

[13] ADGM Registration Authority. Legal entity types guidance, covering the PLC and LTD shareholder minimums and share capital requirements. adgm.com

[14] Federal Tax Authority. Permanent Establishment, and the treatment of a non-resident person with a UAE permanent establishment as a taxable person on attributable income under Federal Decree-Law No. 47 of 2022. tax.gov.ae

[15] U.AE. Starting a business in a free zone, listing five free zone legal forms federally and confirming that not all free zones register all types. u.ae

[16] Ministry of Economy and Tourism. Establishing a business in free zones, listing three generic forms and directing founders to each free zone authority individually. moet.gov.ae

[17] Federal Tax Authority. Corporate tax rates and thresholds, Small Business Relief under Ministerial Decision No. 131 of 2026, the Qualifying Free Zone Person de minimis threshold under Ministerial Decision No. 229 of 2025, audit thresholds and VAT registration thresholds. tax.gov.ae

[18] BusinessDubai.ae. Internal data from free zone and mainland company registrations since 2013, including 2026 package prices by visa count across eleven UAE zones, investor visa bank balance requirements, conversion and switching costs, and client setup timelines and case studies. businessdubai.ae