|Considerations||UAE (LLC)||Branch||Freezone Company (FZCO)/ Freezone Establishment (FZE)|
|Ownership||Must be 51% owned by a UAE national or UAE owned company.||100% foreign ownership. It is not a separate legal entity.||100% foreign ownership.|
1. FZE: One Shareholder
2. FZCO: Two to five Shareholders
|Restrictions on Trading||May trade within the UAE within the scope of activities it is licensed for.||Unless the parent company is a UAE company, a foreign branch cannot trade.||May not sell goods and services directly to the UAE.|
Requirement to appoint distributors or agents to conduct such activity or to set up separate trading entity (LLC).
|Local Service Agent||n/a||A local service agent is required for a foreign/freezone brand. No such requirement for an LLC.||Not required. The Freezone Authority performs this role.|
|Procedure for Establishment||Set up process can be quite lengthy and departmental approval is required.|
Corporate documentation has to be notarized and attested up to the UAE Embassy level at the country of origin and translated into Arabic.
|Requires Ministry of Economy approval in addition to other departmental approvals.||Administratively well organsied.|
Application procedures are accomplished smoothly. However certain documents must still be consularised up to the UAE Embassy level.
|Capital Requirement||No capital requirement unless a specific activity requires a certain level of capital.||There is no capital requirement for a branch.||The minimum share capital required for a FZE/FZCO depends on the freezone in question.|
|Juridical Nature||The LLC is a separate legal entity distinct from its shareholder. The liability of members is limited to their shareholdings in the capital. It is the most common corporate entity for trading in the UAE.||A branch office is not independent from its parent company. The parent company is liable for its acts.||An FZE/FZCO has a separate legal entity distinct from its shareholders. The liability of its shareholders is limited to their capital contribution.|
|Sponsorship of Employee||The LLC is able to sponsor employees on its own account.||A branch is able to sponsor employees on its own accord.||Freezone Authority will act as sponsor for employees. Secondment agreements and bank guarantees are required.|
|Attestation/Translation||Corporate documents must be notarized and attested up to the UAE Embassy level at the country of origin of the foreign entity. It must then be attested by the UAE Ministry of Foreign Affairs and Ministry of Justice and translated into Arabic.||Attested and notarized documents up to the UAE Embassy level are sufficient. UAE MOF attestation is required. No Arabic translation is necessary if it is a foreign branch but not for a branch of an LLC.||Attested and notarized documents up to the UAE Embassy level are sufficient if the shareholder is a foreign entity. UAE MOF attestation is required.|
|Taxes/Benefits||No corporate taxation is currently imposed. However, VAT and Excise Tax is applicable.||No corporate taxation is currently imposed. However, VAT is applicable.||Depending on the freezone and subject to other tax laws, no corporate taxes are currently imposed.|
The application of VAT varies depending on the freezone.
|Management||Must have a General Manager resident in the UAE or can have a Board of Directors.||Must have a General Manager resident in the UAE.||Must have a General Manager resident in the UAE or alternatively at least one of the Directors must be a resident of the UAE.|
|Advantages||An LLC is not subject to trading restrictions. The shareholders liability is limited to the amount of its capitalization.|
Flexibility to do business in any part of the UAE with local and government authorities.
Office premises can be located anywhere in mainland UAE.
Unlimited visas for the company dependent on the size of the office space, however employees who work remotely are not attributed to office space
Wider variety of business activities to choose from
Fewer nationality restrictions with regards to shareholding and visas in comparison to freezones.
|A branch is not subject to minimum capital requirement.||An FZE/FZCO can be 100% foreign owned.|
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