The main differences between an LLC and a free zone company (FZC) in the UAE lie on the requirements to set up the business entity and the limitation of business activities allowed.
A free zone company (in the form of LLC) can be 100% owned by foreigners. On the other hand, only 49% of company shares can be owned by non-resident for an LLC. In order to setup an LLC, foreigners must appoint local sponsor/partner who is entitled the 51% of the company shares. In addition, an LLC must obtain approval from the Department of Economic Development and the Ministry of Economy.
For the limitation of business activities, a free zone company is only granted business activities inside the free zone area where it is registered as well as outside the UAE. On the other hand, an LLC is allowed to trade across UAE and international market.
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