How Much Does It Cost to Set Up Your Business in Abu Dhabi?

by Zaara 17, Jan 2020

How Much Does It Cost to Set Up Your Business in Abu Dhabi?

Abu Dhabi is the capital of the United Arab Emirates and consists of one of the fastest-growing markets in the world. It is also the capital of an emirate with the same name. The emirate of Abu Dhabi is the largest in UAE and is responsible for making up more than three-quarters of the country. Abu Dhabi supports people in business and entrepreneurs from all over the world and provides them with a platform where they can conduct business without any hassles.

Abu Dhabi offers various business opportunities to every sector, making it a very worthwhile and rewarding place to set up a business. The government has also understood the importance of diversifying the economy and accordingly has various investment platforms. An entrepreneur can invest in forming a company in the mainland or the designated free zones in Abu Dhabi.

Setting Up a Business in Abu Dhabi

A businessperson can incorporate a company in either the mainland or the free zone in Abu Dhabi.

Business Setup in Mainland

Being one of the fastest-growing places for conducting business in the world, setting up a business in the mainland of Abu Dhabi can be an excellent opportunity for a company. There are six different types of licenses available in the mainland, namely:

  • Commercial License
  • Agriculture License
  • Crafts License
  • Professional License
  • Industrial License
  • Tourism License

Before starting a business, the entrepreneur must take care that they acquire the necessary license and relevant permits. If not obtained, there may be drastic consequences to be faced by the company in the future.

It should also be taken care that before launching a business, the entrepreneur partners up with an Emirati. This partner or group of partners will be eligible to own 51% of the company’s capital. The companies in Abu Dhabi offer three onshore legal structures, namely:

  1. Representative Office
  2. Foreign Branch Office
  3. Limited Liability Company

The management of the company must weigh the various pros and cons of the legal structure and then set up a business in the mainland.

Business Setup in Free Zone

When an entrepreneur sets up a company in the free zone, the company is allowed to do business inside the free zone or outside of the country of UAE. A free zone is usually established near an international airport or a significant seaport or near the boundaries of a nation. This will provide the free zone a geographic advantage and will allow the various businesses to transport goods and human resources with ease.

There are several benefits of setting up a company in Abu Dhabi free zone, such as:

  • No Import or export duties are levied on the business
  • Complete repatriation of profits and the capital of the industry
  • No tax (Corporate or personal income tax)
  • The quick and easy incorporation process
  • A one-stop-shop for all the necessary licenses and permits
  • Access to the free zone markets and the markets of the adjacent GCC countries

The benefits which each of the free zones provides can vary from each other, and a company should be set up considering the requirements of the business and what benefits the free zone will ensure.

Cost of Business Incorporation in Abu Dhabi

Now setting up a business is not cheap and require some fee at various step. The management of the company has to decide how and where it needs to set up the company. No matter whether the company is being set up in the free zone or the mainland, there are specific points, the management of the company needs to keep in mind.

Cost of Company Incorporation in Mainland

The structure was chosen for the company, the activity being performed, the total number of visas required, etc. are only some of the factors that are needed to be understood to finalize a cost for the company. Mainly the management will have to spend on the following:

  • One-time company name reservation fee
  • One-time government fee (which will include Trade license fee, Activity fee, etc.)
  • Incorporation fee
  • Any price paid by sponsors
  • Fee for commercial premises
  • Company registration and Immigration fee
  • Visa (based on the number of persons)
  • Renewal of any license

A company will have to Deposit AED 150,000 in the bank account of the company which will act as the paid-up capital for the Limited Liability Company.

Cost of Company Incorporation in Free Zone

Just like the mainland, the value of the company depends upon various factors such as the activity being performed, the business activity being played, and numerous other factors. The primary spending will occur due to the following:

  • Registration fee
  • License fee
  • Rent of the location
  • Visa required
  • Share capital

Other than this, there are several other factors which are needed to be kept in mind while setting up a company in the free zone.

Apart from the costs that are associated with the location, there will be costs which will be same for during the setup of the company. These costs will include the fees of the raw materials and human resources, electricity, transportation, etc.

The setting up of a company can be difficult and complicated for an entrepreneur, and it is recommended that the services of a business setup consultancy are availed. If you are looking for such services, look no further. We at Commitbiz are here to help you set up your business in Abu Dhabi. We not only help you in company registration and end-to-end business setup in Abu Dhabi, but also advise you on the company structure to adopt to yield maximum benefits in the short and long terms. For more details, contact us – we’ll be happy to help!

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