Business setup in the Abu Dhabi: A Comprehensive Guide

by Zaara 23, Jan 2017

Business setup in the Abu Dhabi: A Comprehensive Guide

Somewhere in the Middle East in the Persian Gulf, lies a T-shaped island that is home to 1.5 million people. The island is called Abu Dhabi which is the capital of the United Arab Emirates (UAE) and is the second most populous city in the UAE. Abu Dhabi is also the capital of Emirate of Abu Dhabi, which is one of the seven emirates of the UAE.

About Business Setup in Abu Dhabi

Abu Dhabi is home to Abu Dhabi Emiri family and the president of the UAE who comes from the same family. There are large numbers of federal offices located in this city and it is the country’s center of political and industrial activities. Today this city has grown into a megacity and boasts of rapid urbanization which has made Abu Dhabi as major commercial and cultural center. Roughly, Abu Dhabi accounts for 2/3rds of the UAE economy.

Needless to say, business set up in Abu Dhabi is a viable option for business owners in the world over. It is due to a simple fact, to run a thriving business; you need to operate in the thriving economy. Abu Dhabi offers flexible business setup opportunities to entrepreneurs who are eying a fertile economy to set base.

Before we get into details of procedures to be followed, it will be a good idea to have a look into the types of companies that you can open in Abu Dhabi.

Types of Company Formation in Abu Dhabi

There are two main jurisdiction in Abu Dhabi.

Abu Dhabi Mainland

Under Abu Dhabi mainland jurisdiction, the most preferred business entity type is LLC company formation in Abu Dhabi. Here, local sponsor will own the majority of the shares as opposed to the owner of the business.

Abu Dhabi Free Zone

There are many free zones in Abu Dhabi specifically dedicated to an industry. A free zone in the UAE offers advantages like complete foreign ownership, repatriation of capital, exempt from personal and corporate tax and much more.

Based on business operations, business owners can choose which category they wish to work into.

Type of Business Entities in Abu Dhabi

Most of the investors prefer LLC when it comes to Abu Dhabi and mainland. Free zone comes with three options. Nevertheless, here are the different corporate entities one can choose from while setting a business in Abu Dhabi.

  • Limited liability Company (LLC)
  • Branch of local (UAE) company
  • Branch of the Foreign Company
  • Free Zone Company
  • A public joint stock company
  • Free Zone Establishment
  • Private stock company

Each type of company has its own benefits and modus operandi. You can get in touch with business consultants in Abu Dhabi-Commitbiz to identify which kind of company formation suits you the best.

Procedure to Company Setup in Abu Dhabi

For ease and simplification, the Abu Dhabi business setup procedure is classified into 4 main steps.

1.Determining the Nature of the Business

As a prospective business owner, you must be aware of the kind of business activity you would be indulging in. It is important to factor in local drivers like economy, culture, and resources before finalization of a business trade. In addition to that, you must ascertain the type of company formation in Abu Dhabi that you would form e.g. Limited Liability Company, public joint stock company etc.

This is important because different business trades fall under the administration of different authorities.

Here are some examples

  • For construction, real estate, clinics, transportation etc. you must go for a commercial license which is provided by the Abu Dhabi Department of Economic Development (DED
  • For hotels, travel agency, tourist camp, boat rentals, you must apply for tourism license which is granted by Abu Dhabi culture authority (TCA)
  • For the practice of any profession that involves intellectual abilities like writer, lawyer, consultant, you must apply for an occupational license, which is granted by Abu Dhabi Department of Economic Development (DED)
  • For agricultural farms, the processor of animal and marine products, you must apply for agriculture license, also granted by Abu Dhabi Department of Economic Development (DED)
  • For factories of all manufacturing units, you must apply for an industrial license, which is granted by ZonesCorp

2.Registration of Company Trade Name

Choosing an appropriate trade is important, as it not only gives an identity to your business, but it also gives a glimpse into the type of business activity. Like every country, there are certain guidelines that DED has provided that you must keep in mind while choosing a trade name.

Here are a few

  • The name must be coherent with the type of legal activity and business trade
  • The name should not be in violation of public law and order
  • It should not have been previously registered under the same activity of similar activity
  • It must not be misleading to the consumer
  • It should contain any mention of religion, denomination or governing authority, names or logos of any Arab, international body.
  • Additional trade name related information can be obtained from trade name registrations service

3.Seeking Appropriate Approvals from Authorizing Authorities

Here comes the important part, once you are ready with your business idea, business type, and trade name and licensing requirements, you must apply for approvals with respective authorities.

Business owners must apply for preliminary approvals from the Department of Economic Development, after obtaining the trade name registration certificate. This preliminary approval comes in handy when you proceed with other approvals as it speeds up the process.

One important fact that you must be aware of is that this preliminary approval is valid only for a period of 3 months, post which you must obtain a new certificate.

Documents Required for Preliminary Approval for Abu Dhabi Business Setup

  • Approved trade name
  • For foreign investors: Approval from the department of naturalization and residence
    valid passport copies
  • Copy of Emirates ID, if applicable
  • No objection certificate

4.Licensing Approvals

Upon submission of all documents, the license must be collected from the concerned authority. In additional DED, there may be special approvals required from government bodies like -

  • Abu Dhabi customs duty
  • Abu Dhabi Distribution Company
  • Ministry of civil aviation
  • Telecommunication regulatory authority
  • Supreme petroleum council.
  • Abu Dhabi education council
  • Medical council
  • Central bank

Apart from this, the cost of setting up a company in Abu Dhabi differs depending on different business activities chosen.

How can we help?

All in all, business setup in Abu Dhabi involves interaction with many authorities and the licensing & registration procedures can become tedious for you. That’s where we come into the picture. We at Commitbiz are a business setup consultants in Abu Dhabi.  We have in-depth local knowledge and business expertise to guide to smoothly to your business goal in Abu Dhabi. We take care of the formalities, while you focus on converting your business idea into a profitable business. To know more, contact us today.

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