What is FZE (Free Zone Establishment)?
An FZE is a Free Zone Establishment — a single-shareholder Free Zone entity, equivalent to a sole shareholder LLC. Used by solo founders incorporating in a UAE Free Zone.
Current Rate (Annual)
0% Corporate Tax on Qualifying Income (if QFZP); 9% otherwise
Example
A solo founder incorporates a IFZA FZE with AED 50,000 share capital, holds 100% of shares, runs a remote consultancy, and qualifies for QFZP on non-UAE customer income.
Related terms
An FZCO is a Free Zone Company with multiple shareholders (typically 2 or more, depending on the Free Zone Authority). It is a separate legal entity with limited liability, registered with a specific UAE Free Zone Authority. Common form for founder-led businesses with co-founders.
UAE Free Zones are special economic zones offering 100% foreign ownership, customs benefits, and (subject to QFZP rules) preferential 0% Corporate Tax on Qualifying Income. There are 40+ Free Zones across the seven emirates, each with their own Authority and licensing rules.
A Qualifying Free Zone Person is a Free Zone entity that meets specific tests under the UAE Corporate Tax law to retain the 0% rate on Qualifying Income. Tests include: substance (people and assets in the Free Zone), audited financial statements, transfer pricing compliance, de minimis non-qualifying revenue (≤5% or AED 5m).
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