A Free Zone Company (FZC) is another popular business entity in the special economic zones of Dubai, designed to provide multiple shareholders an environment conducive to growth and profitability. An FZC can have anywhere between 2 to 5 shareholders, who can be individuals, corporate entities, or a combination of both. Like Free Zone Establishments (FZE), FZCs offer a series of benefits but differ in terms of ownership structure and operational aspects. This article aims to offer a comprehensive understanding of Free Zone Companies in Dubai.

What is a Free Zone Company (FZC)?

A Free Zone Company is a legally distinct business entity that can be formed within any of Dubai’s specialized Free Zones. It offers similar benefits to an FZE but is distinguished mainly by the number of shareholders. An FZC allows for a collaborative approach to business, permitting multiple partners to share the risks and rewards.

Key Features

Multiple Shareholders

An FZC must have between 2 to 5 shareholders. These shareholders can be individuals, corporate bodies, or a mix of both.

100% Foreign Ownership

Like FZEs, FZCs allow for 100% foreign ownership, granting international entrepreneurs complete control over their business without requiring a local sponsor.

Varied Licensing Options

FZCs have access to a wide range of licenses, just like FZEs. Whether you want to engage in trading, offer services, or set up a manufacturing unit, there’s a license for you.

Tax Benefits

FZCs enjoy several tax advantages, including no corporate and income taxes, and are often exempt from import and export duties.

Full Repatriation of Profits

FZCs can repatriate all profits and capital, which makes it highly attractive to foreign investors.

Flexible Capital Structure

There’s generally a lot more flexibility in the structuring of the company’s capital. Each Free Zone may have its own set of regulations, but in general, the capital requirements are designed to be flexible to attract different scales of business.

Eligibility and Documentation

The documentation requirements for an FZC are somewhat similar to those of an FZE but will typically include:

• Application forms for each shareholder
• Business plan outlining the company’s objectives and operational plan
• Copies of passports and visas for individual shareholders
• Corporate documents for entity shareholders
• Proof of address for all shareholders
• Additional forms and documentation as required by the specific Free Zone

Steps to Register an FZC

1. Select a Free Zone: Not all Free Zones are the same; each caters to specific industries and offers various benefits. Make sure to choose one that aligns with your business objectives.
2. Initial Approval: Submit the required documents to the respective Free Zone authority for initial approval. You may need to present your business plan and other relevant documents at this stage.
3. Legal Formalities: After getting initial approval, you’ll need to notarize and legalize your corporate documents.
4. Payment: Once your application has been approved, and all documents are in place, you’ll need to pay the required fees. Fees can vary depending on the Free Zone, the type of license, and other variables.
5. Finalization: After making the payment, you’ll receive your business license, and you can commence your business operations.

Regulatory Compliance

Similar to FZEs, FZCs must adhere to the regulations and laws set by the specific Free Zone authority. Compliance requirements may include periodic financial audits, renewing business licenses, and adhering to employment regulations within the Free Zone.