Abu Dhabi, situated on the south-eastern side of the Arabian Peninsula, next to the Persian Gulf, is the largest Emirate and the centre of the UAE. The city is more than three-quarters of the territory of the country of the UAE and, after Dubai, the second most crowded Emirate in the Federation. Abu Dhabi has been developing its economy outside of oil exports since 2009, despite 10 percent of the world's oil reserves and is one of the largest producers of oil. The city has heavily funded real estate, industrial development, retail, and tourism.
Abu Dhabi is one of the world's fastest-growing and wealthiest markets. Abu Dhabi is an attractive location of choice for a businessman wishing to establish a company in the Middle East. In the Emirate, corporate practises, and business processes are transparent, and it only takes a few days to set up a company in Abu Dhabi.
Known for its luxurious life, Abu Dhabi is one of the wealthiest in the Emirate. It has the requisite infrastructure and services that will contribute to an increase in the registration of companies in Abu Dhabi. The government also took initiatives that draw both local and foreign investors. A few of the critical reasons for the rise in the creation of the Abu Dhabi Free Zone business are the conduct of the world's foremost event Dubai Expo 2020 and the increase in tourism.
You need first to obtain a commercial licence and integrate your business to start a company in Abu Dhabi. Business registration is distinct from your home jurisdiction in Abu Dhabi. It is essential to know the laws of the government, and restrictions etc. are necessary so that you can make the ideal decision for your business.
Why Establish a New Business in Abu Dhabi?
Abu Dhabi is among the most sought-after offshoring locations in the world, being the administrative capital of the UAE. It contributes to 95 per cent of the total oil reserves of the country and provides almost all economic sectors with numerous investment opportunities.
Apart from the fact that it is profitable and stable, setting up a business in Abu Dhabi is preferred due to its transparent and flexible business setup procedures. It only takes a few days to set up a new company or open an offshore branch of your company in Abu Dhabi, unlike in a few countries. You must follow the necessary guidelines correctly for that.
Here are a few other benefits of establishing a company in Abu Dhabi:
- Abu Dhabi is a popular location in Europe, Asia and Africa and has close access to the rest of the world.
- The Emirate requires 100 % foreign ownership and offers an exemption from corporate and personal income tax.
- No foreign exchange restrictions, quotas or trade barriers exist.
- With world-class facilities in healthcare, residences, leisure, schooling, and transport, the living standards in Abu Dhabi are top-notch.
Company Formation in Abu Dhabi
Commitbiz is familiar with the laws and regulations of company creation in Abu Dhabi and can assist you in setting up your company here, using the appropriate licences. You can choose from a free zone in Abu Dhabi or a mainland business.
1. Free Zone Company in Abu Dhabi
The establishment of a Free Zone company provides single-window administration and is approved as an autonomous jurisdiction that allows an expatriate businessperson (100 per cent) to own a company entirely. If the company is set up in a free zone, there is no obligation to name a UAE national as the service agent of a branch or as a partner.
There are certain restrictions on setting up a company in the UAE, so free zones serve as a gateway to foreign business trade. Local (UAE) supply of goods, however, must be channelled by local dealers, and a 5 per cent customs duty is to be paid by the company for it. The Free Zone Authority of Abu Dhabi offers the ideal portal for smooth registration of business in the Emirate.
Free zones in Abu Dhabi provide licenses:-
- Commercial Trading
- Branch of a Foreign Company
2. Mainland Company in Abu Dhabi
Abu Dhabi has a list of commercialised geographical areas on the mainland that come under the government of the UAE and its authorities. They have regularised policies and legal guidelines, making the town one of the UAE's most advanced economies. In Abu Dhabi, a mainland company may conduct business across the UAE, but maximum foreign shareholder equity capped at 49% is allowed.
3. Offshore Business of Abu Dhabi
Companies can transfer offshore Abu Dhabi legitimately for tax avoidance or to enjoy relaxed regulations. If you want to secure your properties, it may be a viable option to form a company overseas in Abu Dhabi. The offshore companies in Abu Dhabi are non-resident companies, which means that the shareholders do not issue a visa, and there is no physical office. Besides, companies in Abu Dhabi are not given with an operating licence and are only printed with an official Certificate of Incorporation. It is because, within the Emirates, they can not conduct development, trade, or business.
Company Registration in Abu Dhabi
The Abu Dhabi Economic Department is the licencing department which, except for the free zones, assigns licences to all types of business in Abu Dhabi. A corporation can follow each of the following legal forms in Abu Dhabi:
1. Sole Ownership
In Abu Dhabi, an investor may set up a new company as a sole trader. One has to name a UAE national as a service agent with 51 per cent shares. Physicians, attorneys, and engineers often use this kind of organisational structure.
2. Limited Liability Company
LLC is one of the companies that an investor chooses for the Abu Dhabi company setup. It is a separate legal body, i.e. the directors, different from its owner, shareholders, and the people who operate it. A minimum of one owner and two shareholders are chosen for the establishment of an LLC company in Abu Dhabi.
Accordingly, it is strictly forbidden for foreigners to form a partner company in Abu Dhabi. This type of business structure is restricted to UAE nationals only.
4. Public Shareholding Company
PSC is known in Abu Dhabi as a Joint Stock Firm. It is ideal for large-scale ventures or events requiring a significant expenditure of funds or private or public capital raising. A PSC may have at least ten founders in Abu Dhabi, of which at least 51% must be owned by a UAE national.
5. Joint Venture
A joint venture is a contractual deal between a foreign party and a licenced regional party to participate in the business activity that is desired. In the UAE, joint ventures are set up in the form of an LLC. In practice, collaborative partners are seen as enabling companies working together on particular experiences to have a suitable structure.
6. Branch of a Local (UAE) Company
UAE registered companies with a chapter in the UAE may sell or distribute products in the region, unlike a foreign company branch office.
7. Branch of a Foreign Company
A foreign company's Abu Dhabi branch is permitted to invoice UAE customers, sign local sales contracts, and earn customer profits. Here, to sponsor visas and permits, a local UAE agent are chosen.
8. Free Zone Company
Abu Dhabi Free Zone Companies are created for tax advantages. They have benefits like 100% capital and profit repatriation, 100 % foreign ownership, no currency limits, and so on.
9. Foreign Representatives Agency
The international representative office is wholly owned and operated by a non-UAE national in Abu Dhabi. It does not have a legal authority to make direct sales within the UAE, even though the entity is foreign-owned. A representative office is typically created to do market research for that specific area.
Things to Know Before Abu Dhabi Business Registration
Before a new company set up in Abu Dhabi, rules, features, facts, and regulations must be understood so that in the future, there will be no problem.
1. Local Promoter
In general terms, the local sponsor refers to local service agents and candidate shareholders with foreign investment in the mainland companies in Abu Dhabi. An Emirati with a family membership card requires to be a sponsor. If a person wants their company to start in the mainland of Abu Dhabi, then they must have a local sponsor. A local sponsor in Abu Dhabi is expected to own 51 percent of the business shares, while foreign investors will own the remaining 49 per cent. It is essential to consider what one wants from them when selecting a local sponsor.
Here are a couple of topics to remember—
- If you want an actively participating supporter or a sponsor for the nominee?
- If your sponsor promises to open doors, agreements, and introductions, how are you going to make sure they follow through?
- Would your busy, high-profile sponsor, upon request, be viable for document signings?
- If the sponsor dies, what happens to the 51 per cent share of your company in Abu Dhabi?
- What is your plan for departing, and is it enforceable?
2. Membership in the Chamber
Law No. (7) of 1998 mandates all nationals and foreigners engaged in any economic, manufacturing, technical or professional operation within the territory of the Abu Dhabi Emirate. Whether individuals, branches or businesses, must join the Abu Dhabi Chamber of Commerce and Industry and become a representative of the Abu Dhabi Chamber of Commerce and Industry as a requirement for the purchase of a business licence.
3. PRO Services
Any business requires the Public Relations Office in Abu Dhabi. The benefits of Abu Dhabi PRO apply to all operations related to the processing of government papers and documents, such as visa applications, documentation and approvals of company trade licences, and labour cards. In Abu Dhabi, PRO's services include —
- Attestation Paper
- Renewal of Visas and Revocation
- License to Trade
- Approvals to Legislation
- Clearance of General Document
- Legal translation approved by the UAE
Cost of a Company Set-up in Abu Dhabi
At any move, there is undoubtedly a cost involved. There is a price involved, whether it is a free zone business or a mainland company in Abu Dhabi. The cost of establishing a business in Abu Dhabi for various jurisdictions is as follows.
Abu Dhabi Mainland Set-up Cost
Depending on the corporate structure, business operation, office space, and various visas, the cost varies. Other than these, the few prices that you need to be aware of are —
- Incorporation fees (submission of appropriate papers, approval/inspection schedule-one-time)
- Fees for sponsors (annual)
- Valid (one time) fees
- Taxes on government and third parties (trade permits, notary fees, legal translations, typing centres, one-time and annual fees mixed)
- Per individual visa (typically lasts for two years)
Advantages of Starting a Company in Abu Dhabi
The process is transparent as to how to start a small business in Abu Dhabi. Knowing its advantages will give Abu Dhabi a necessary boost to do business. Some benefits are mentioned below —
- It is easy to obtain an Emirates commercial licence, local visas, rent a premise and open a corporate bank account from the Chamber of Commerce and Industry of Abu Dhabi for LLC registration in Abu Dhabi.
- The investor will become a partner in the business.
- The investor will run the company without the local, national partner's day-to-day intervention.
- Abundant and cheap supply of energy
- Competitive charges on freight
- Price of Competitive Real Estate
- Simple to open corporate bank accounts worldwide
It includes most of the items related to the setting up of companies in Abu Dhabi. A foreigner investing in Abu Dhabi for the first time, however, does not know where to invest and earn profits. Therefore, it is essential at this point to understand the booming sectors in Abu Dhabi.
Booming Business Industries in Abu Dhabi
While thinking of starting a company, Abu Dhabi has everything an investor dreams of. For any entrepreneurial drive, it is an ideal spot. Not only does it provide the facilities and infrastructure required for starting up a company, but it also has a growing number of visitors from all over the world. It is well known that tourism in the Emirate has flourished over the past few years. Also, two key industry sectors have reached the highest expectations in their approach to being the best. They are-
1. IT Sector
Since the UAE aims to develop itself as a Smart Country, the Abu Dhabi government has taken a range of initiatives in the area towards the IT sector. Abu Dhabi Hyperloop, whose vision is to bring about a robust economic transformation powered by technology and automation. Information Technology Industry in Abu Dhabi is increasing its efforts to succeed in the area of technology and innovation and to integrate all possible business sectors in the same way.
2. Hospitality Sector
In terms of growth in the hospitality sector, the Middle East, especially Dubai and Abu Dhabi, are considered the GCC's leading cities. They are not only increasing in terms of tourism and infrastructure but also the names of public and private sector jobs and industry. Due to government initiatives, festivals, and strategic locations, and so on, the hospitality sector in Abu Dhabi has seen enormous growth over the years, and it will continue to expand.
If you want to know more about the booming business opportunities in Abu Dhabi in-depth, click here.
Things to do After Company Registration in Abu Dhabi
There are a few items that must be taken care of once a company has been licenced in Abu Dhabi. Like, just like, like,
1. Company Card (Labor Card)
Every company activity in the UAE has to be registered with the Ministry of Labor and the Immigration Department. An organisation would not be sponsoring (or legally employing) workers without these cards. All employment-related issues are handled by the Ministry of Labor or Labor Department in the UAE. For those who are entitled to one, the MOL is responsible for issuing labour cards and effective labour bans.
To get a valid visa to access the UAE, citizens from different countries have to meet other requirements. The sort of visa you need to apply for depends on your requirements. In the UAE, the additional permits available are—
- Job visa
- Travelling visa
- Visit visa
- Visitors visa
- Transit visa
Our Business Setup Facilities in Abu Dhabi
Going through all these measures alone in a foreign land can be difficult. It is therefore recommended to get assistance from business formation consultants in Abu Dhabi. We at Commitbiz are Abu Dhabi business setup consultants and can assist you with the following Abu Dhabi business setup services:
- Business Setup
- Registering Business
- Sponsorship locally
- Services of a Public Relations Officer (PRO)
- Bookkeeping and Accounting
- Consulting on taxation
- Registration with Value Added Tax ( VAT)
- Judicial Recommendation
- Establish an Abu Dhabi branch office.
- Protective of intellectual property
Commitbiz helps businesses and organisations through business registration, incorporation, and legal advisory services to set up a company in Abu Dhabi. Our specialists, following the laws of the UAE, take care of the banking, visa, legal, and licencing formalities. With your business ambitions at the core of our ecosystem, we support you through your business creation.
In this booming economy, we are helping you to plan your business. It involves managing all the legal procedures to help your company gain a foothold, create open trade agreements, and make use of all the region's state-of-the-art amenities. Contact us for company setup services in Abu Dhabi; we will be happy to assist.