The emirate of Abu Dhabi is the largest in the United Arab Emirates and also houses the capital of the country, which is also called Abu Dhabi. The city of Abu Dhabi is the second-most populous city in the state, second to Dubai. In recent times, the government of Abu Dhabi has considered to shift its focus from the revenue obtained from the oil and gas sector and try to find new avenues of revenue. His means that there is a massive potential for setting up and growth of a business in Abu Dhabi.
What Is a Business License?
Acquiring a business license is a significant step in setting up a business in Abu Dhabi. If the relevant licenses are not present with the management, the company may have to face additional fees, penalties operational restrictions etc. and may have to shut down the company ultimately.
A business license is essentially a document of permit or approval which allows the company or individual entity to conduct a particular business. These licenses are dependent upon several factors such as the size of the company, the activity being performed, the jurisdiction in which the company is being set up and various other factors.
Different Licenses in Abu Dhabi
According to the website of the Abu Dhabi Judicial Department, there are six types of licenses in Abu Dhabi. It should be kept in mind that if the companies are being set up in the free zones, it needs to partner with a local emirate which will guide the foreigner through all the government.
In case the company is being formed in a free zone, the company does not need to partner themselves with a local Emirati.
The six different types of licenses available to a business are:
1. Commercial License
A commercial license is provided to the companies which partake in activities such as the following:
- Trading (General or Specific)
- Real Estate
- Transport of Goods and Service
To obtain this license, the relevant government needs to be contacted and also mention the type of business activity which is to be conducted.
2. Agricultural License
Agricultural Licenses are mainly provided to the businesses which have agricultural land and own livestock farms or fisheries.
3. Craft License
A craft license is given to a person who uses physical efforts and utilizes his tools and various other equipment to conduct his business. The types of companies for which this license is provided includes professions such as blacksmith, carpenter, printer, etc.
It is to be kept in mind that if you obtain a craft license, you also need to avail the services of a local sponsor. This local sponsor has no liability to the business nor has any equity participation. The fees provided to the local sponsor will be a fixed sum of money which will be offered annually to the person.
4. Industrial License
These licenses are provided to companies which wish to open a factory in Abu Dhabi. With the recent boom in the manufacturing sector and understanding and lenient government, setting up a company in Abu Dhabi is one of the best decision which and entrepreneur can take.
5. Professional License
If a business entity utilizes the talents it has acquired or the intellectual abilities to conduct business, a professional license is issued to the object. This license is usually granted to professionals such as Accountants, doctors, engineers, lawyers and other professionals.
It should be kept in mind that the entities having any nationality can obtain a professional license as long as these businesses adhere to the rules and regulations of the Department of Economic Development of Abu Dhabi, also known as ADDED.
6. Tourism License
If an entity wishes to form a business related to travel and tourism, then in such a case, they need to obtain a travel and tourism license. This license can be very easily obtained as the Department of Culture and Tourism is integrated with the Department of Economic Development. A tourism licence will not only simplify the process of setting up your company but will also help in increasing the legitimacy of the tourism business.
These six types of the license will take care of all the possible businesses that are going to be set up in Abu Dhabi. If you require any help in incorporating a company in Abu Dhabi, you should avail the services of a business setup consulting firm. One such firm is Commitbiz.
Commitbiz is a management consultancy firm which will help you in the company incorporation process and will also help in various other services that a company may require in the future such as intellectual property services or tax fillings etc. For more details, contact us – we’ll be glad to help.