Free Zone LLC vs. Branch Office in RAKEZ: Which Structure Is Best? (2025 UAE Guide)
RAKEZ is one of the most business-friendly setups in the UAE and it’s gaining traction fast. Based in Ras Al Khaimah, RAKEZ supports more than 50 industries. These industries range from trading and logistics to tech and consulting. The zone caters to both start-ups and global brands. What is so appealing, though? The flexibility, simplicity, and a solid reputation for getting things done.
The question is why Rakez? There are so many other free zones too. It’s simple. Setting up a business here doesn’t burn a hole in your pocket. RAKEZ company setup costs are lower than most other zones. Packages are flexible, and office options range from virtual desks to full warehouses.
You also get:
- 100% foreign ownership
- No currency restrictions
- Full repatriation of profits
- A strong legal framework
Add modern infrastructure, a strategic location, and access to both local and global markets and it’s clear why RAKEZ company formation is in demand. There’s another big win: RAKEZ corporate tax benefits. Free zone entities that qualify under the UAE’s new tax regime can still enjoy a 0% corporate tax rate on eligible income.
That’s huge. Especially in 2025, when tax planning matters more than ever. So if you’re looking to launch or expand in the UAE, RAKEZ deserves your attention. But The big question is “should you open a Free Zone LLC or register a Branch Office”?
Let’s break it down.
What Is a Free Zone LLC in RAKEZ?
A Free Zone Limited Liability Company (FZ-LLC) in RAKEZ is one of the most flexible business structures available in the UAE. It gives you full ownership, limited liability, and the freedom to operate in a booming economic zone without any local partner involved.
This isn’t a branch. It’s a fully independent legal entity. You can set it up with just one shareholder, or up to fifty. That makes it ideal for solo founders, family-owned firms, and investment-backed startups alike.
Once your RAKEZ company formation is complete, you’re treated as a standalone business under UAE commercial law. That’s important. It means your company takes on its own debts and liabilities your personal assets stay protected.
You also get access to a wide selection of license types:
- Commercial (for trading and general business)
- Service (for professionals and consultants)
- Industrial (for manufacturing or assembly)
- Educational (for training centers and institutions)
- Media (for creatives and content firms)
And it’s not just about licenses. RAKEZ free zone company setup gives you options for real estate too. From flexi-desks to private offices, warehouses, and land for development, the options are many and the benefits are real.
Tax-wise, FZ-LLCs registered under RAKEZ corporate tax rules can still benefit from the 0% corporate tax rate. But this is true only if they meet qualifying criteria. That includes earning income strictly from within the free zone or from other free zone entities.
FZ-LLCs also allow:
- Full profit repatriation
- No restrictions on currency movement
- Easy shareholder transfers
- Access to UAE residency visas for owners and employees
- Fast-track setup and digital services via RAKEZ’s portal
Who picks this structure?
Founders who want control. Businesses that plan to scale. Investors who want a clean cap table and a protective legal wrapper. And companies looking to take advantage of RAKEZ free zone company formation benefits without compromise.
It’s the go-to setup for those who want flexibility today and growth potential tomorrow.
Free Zone LLC vs. Branch Office in RAKEZ: What Really Sets Them Apart
You’ve seen the basics. Now let’s zoom in. Here’s how a Free Zone LLC stacks up against a Branch Office in RAKEZ, point by point. No fluff. Just what matters when you’re making a decision.
Legal Status
An FZ-LLC stands on its own. It’s a separate legal entity with its own identity. A Branch Office is just an extension. It operates under the name and structure of its parent company. No legal independence.
Shareholders
An FZ-LLC can have between 1 to 50 shareholders. Great for founders, investors, or group ownership. A Branch doesn’t have shareholders. It belongs entirely to the parent.
Ownership
Both structures allow 100% foreign ownership in RAKEZ. With an FZ-LLC, you own the company. With a Branch, the parent company owns it completely.
Liability
An FZ-LLC limits your risk. The company is liable, not you. A Branch Office pushes all liabilities up to the parent. Any legal or financial trouble? It lands on the main company’s books.
Business Activities
An FZ-LLC can choose from a wide range of licenses—commercial, service, industrial, media, and more. A Branch is restricted. It can only perform the exact same activities as its parent company.
Bank Account
An FZ-LLC opens its own corporate bank account in the UAE. A Branch usually operates under the parent’s financial structure. That means less flexibility in handling money locally.
Tax Treatment
Both follow RAKEZ corporate tax rules. FZ-LLCs enjoy 0% on qualifying free zone income up to AED 375,000, and 9% on anything above. Branches pay tax based on where income comes from and whether it qualifies under the free zone regime.
Repatriation of Profits
FZ-LLCs can freely repatriate profits and capital. No restrictions. Branches typically pass profits back to the parent, following its policies.
Setup Speed
Both are quick. You can usually complete a RAKEZ company setup in 5 to 10 working days, whether it’s an FZ-LLC or a Branch.
Minimum Capital Requirement
FZ-LLCs need to show AED 10,000 to 15,000 in minimum capital (depends on the activity). Branches don’t need any share capital. That’s one less thing to fund upfront.
Customization
FZ-LLCs offer flexibility. You can shape the structure, change shareholders, and tweak the setup as your business grows. Branches are rigid. You’re locked into the parent’s identity and structure.
The simple answer is if you want flexibility, growth potential, and legal protection, go FZ-LLC.
If you just need a local presence and want to keep things simple, go Branch.
Setup Process for Each Structure
Let’s get real about what it takes to set up business in RAKEZ. Whether you’re building from scratch with a Free Zone LLC, or opening a Branch Office of an existing business, the process is straightforward, but not identical.
Free Zone LLC Setup Steps
Starting fresh? Here’s what you’re in for:
- Choose your business activity and structure.
This defines everything else—your license, your costs, and your compliance. - Pick a trade name.
RAKEZ has rules. No duplicates, no offensive language, no references to religion or government. - Apply for initial approval.
Submit your plan, ID documents, and request approval to proceed. - Register legal documents.
You’ll need a Memorandum of Association (MOA), Articles of Association (AOA), and passport copies. - Pay fees and get your license.
Once approved, you settle the government fees and collect your license. - Open a UAE business bank account.
Your company is now a separate legal entity, so it needs its own account. - Start operations.
You’re live. Time to rent an office, hire staff, and get moving.
Timeline: If your documents are in order, expect 5 to 10 business days for full setup.
Branch Office Setup Steps
Already have a company? This path is shorter—but stricter.
- Get a board resolution from the parent company.
This authorizes the opening of a branch in RAKEZ. - Gather your legal documents.
That includes the parent company’s certificate of incorporation, MOA, AOA, and a power of attorney. - Submit your application to RAKEZ.
Add the trade name, activity type, and supporting papers. - Pay the fees and receive your business permit.
Once approved, you’re good to go. - No share capital required.
That’s one less item on your checklist.
Timeline: Also around 5 to 10 business days, assuming no hiccups in documentation.
RAKEZ Free Zone LLC: Key Benefits & Drawbacks
Let’s say you’re leaning toward the Free Zone LLC. What’s the upside—and what should you watch for?
Major Benefits
- Full control. You own it. You run it. No local partner required.
- Wide choice of activities. From trading to tech to training—you’re covered.
- Investor-friendly. Easy to add shareholders or bring in partners later.
- Office flexibility. Rent a desk, a private suite, or a full warehouse. RAKEZ has options.
- Visa packages are clean and fast. Staff, partners, even family—sorted.
- Built for growth. Ideal for startups, SMEs, or foreign investors eyeing the UAE market.
Potential Drawbacks
- More paperwork if you’re in a regulated sector. Finance, media, or healthcare may need extra approvals.
- Tax compliance is on you. Yes, there are RAKEZ corporate tax benefits, but you still need to register, file, and stay compliant under UAE law.
RAKEZ Branch Office: Key Benefits & Drawbacks
Choosing a Branch Office in RAKEZ isn’t just about skipping setup costs. It’s a deliberate move, best suited for companies that already have traction elsewhere and want a clean entry into the UAE.
Key Benefits
- Quick expansion path. Already have a business? A branch lets you set up without reinventing the wheel.
- No share capital needed. That’s money saved upfront.
- Simplified compliance. Most regulatory work mirrors your parent company’s processes.
- Brand consistency. You operate under the same name, same identity, same business model.
Perfect for businesses that want to grow into RAKEZ without creating a whole new legal structure.
Drawbacks
- Zero legal independence. The branch can’t act on its own. The parent company is on the hook for everything—contracts, debts, liabilities.
- Limited activities. You’re locked into whatever the parent company is licensed for. No pivoting.
- No flexibility with ownership or structure. You can’t bring in partners or new investors. The branch remains 100% tied to the parent.
In short: if you want control and agility, this probably isn’t it.
Taxation, Banking, and Compliance in 2025
Let’s get practical. RAKEZ offers strong tax advantages. This however needs clear understanding of the tax rules on your part:
Corporate Tax
Both Free Zone LLCs and Branches fall under UAE’s federal tax law. Here’s how it works in 2025:
- 0% tax on profits up to AED 375,000
- 9% tax on anything above, unless you qualify as a free zone entity with eligible income
RAKEZ corporate tax incentives still apply but you have to meet the conditions. That means doing business primarily within the free zone or with other free zone entities.
Personal Income Tax
Still zero. That hasn’t changed. No tax on salaries or dividends at the personal level for either structure.
Banking Access
Both FZ-LLCs and Branches can open business accounts in UAE banks. But in practice, banks often prefer FZ-LLCs. Why? Because they’re standalone entities. Less risk. Clearer structure. Branches may face more paperwork, especially if the parent is overseas.
Compliance Requirements
Doesn’t matter which structure you pick—you still have to stay on the right side of the law.
That means:
- Economic Substance Regulations (ESR)
- Ultimate Beneficial Ownership (UBO) filings
- VAT registration and filings (if you cross the threshold)
- Corporate tax registration and returns
No shortcuts here. Whether it’s a RAKEZ company formation or a branch setup, compliance isn’t optional.
Decision Factors: Which Is Best for Your Business?
Let’s make this simple. You’re not choosing between good and bad. You’re choosing what fits your goals. Both the options work but it only depends on what you are looking for.
Choose a Free Zone LLC if:
- You want a stand-alone UAE entity with full independence
- Flexibility and future growth are part of your plan
- You aim to bring in investors, partners, or shareholders down the line
- You want a clear legal separation between your personal and business liabilities
- You prefer a structure banks like when opening an account
Choose a Branch Office if:
- You already have an established business in the UAE or abroad
- You want to test the UAE market with minimal structural changes
- You need brand consistency with your main company
- You want to keep control centralized at your head office
- You’re not planning to raise capital or bring in partners locally
Still not sure? Then you’re not just choosing a structure, you’re shaping your expansion strategy. The wrong call creates friction later. The right one unlocks growth.
RAKEZ Setup Packages & Costs (2025)
Good news: RAKEZ company setup is still one of the most affordable in the UAE.
FZ-LLC Packages
Start from AED 5,750–6,000, depending on license type and visa needs. These starter packages typically include:
- Trade license
- Flexi-desk or shared workspace
- 1 UAE residency visa
- Company documents
Need more? RAKEZ has tailored packages for:
- E-commerce businesses
- Industrial operations
- Media and education providers
- Multi-visa packages with larger offices or warehouses
Branch Office Setup
Similar licensing and registration fees apply around the same ballpark. But here’s the kicker: no share capital required. That’s money saved.
How ADEPTS Can Help
Forming a company is easy. Forming it right that’s where expertise comes in.
ADEPTS helps businesses navigate the RAKEZ setup process without headaches.
Here’s what we do:
- Help you pick the right structure based on your business model, market plans, and long-term goals
- Handle all documentation and filings, from name reservation to final license issuance
- Assist with banking, including introductions to UAE banks and account setup
- Ensure tax compliance, including RAKEZ corporate tax, ESR, UBO, and VAT
- Support your growth with accounting, audit, and advisory services tailored for RAKEZ businesses
Whether you’re launching an FZ-LLC or opening a branch, ADEPTS gives you clarity, speed, and peace of mind.
FAQs:
Not directly. A RAKEZ Free Zone LLC is meant to operate within the free zone or internationally. If you want to sell goods or services in the mainland UAE, you’ll need to work through a local distributor or agent who holds the necessary mainland license. That’s standard across all UAE free zones.
RAKEZ gives you options. You don’t need a full office to get started. A flexi-desk package is enough for many license types, especially for solo founders or service-based businesses. As your company grows or you hire more staff, you can easily upgrade to a physical office or warehouse.
Not at all. Renewals in RAKEZ are designed to be fast and straightforward. Most of it can be done online. Costs depend on your license type and visa count, but overall, RAKEZ is known for keeping renewal fees reasonable and transparent, especially compared to Dubai free zones.
It depends on your facility type. A flexi-desk usually gives you 1 to 2 visas. A physical office or warehouse means more space and more visas. RAKEZ ties visa eligibility to your leased workspace, but they’re flexible. You can increase your visa quota as your team grows.
There’s no switch button. You’d need to shut down the branch and go through a fresh RAKEZ company formation process for a Free Zone LLC. That means new documents, new registration, and a new license. It’s doable, but it’s not a direct conversion.
Some activities fall under regulated sectors, and they need outside approvals. Think financial services, healthcare, education, media, and legal consulting. In these cases, you’ll need clearance from UAE authorities like the Central Bank, KHDA, or Media Regulatory Office before RAKEZ can issue your license.
Both FZ-LLCs and Branch Offices must meet UAE compliance standards. That includes:
- Corporate Tax registration and filing
- Economic Substance Regulations (ESR), if applicable
- Ultimate Beneficial Ownership (UBO) declarations
- VAT registration and returns, if turnover exceeds the threshold
Some FZ-LLCs, especially in regulated sectors, may also need to submit audited financials annually. Branches may be able to rely on the parent company’s audit reports but it depends on the activity and structure.
ADEPTS doesn’t disappear after you get your license. We stay involved, helping you stay compliant, grow, and adapt. That includes:
- Handling corporate tax, ESR, UBO, and VAT filings
- Running internal audits to catch issues before they become problems
- Supporting you with payroll, bookkeeping, and financial reporting
Offering advice whenever you need to make a change—whether it’s hiring, restructuring, or expanding to new markets
