The emirate of Abu Dhabi is the largest in the United Arab Emirates and houses the country's capital, 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 shifting its focus from the revenue obtained from the oil and gas sector and try to find new avenues of income. He means that there is a massive potential for setting up and developing 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. Suppose the relevant licenses are not present with the management. In that case, the company may have to face additional fees, penalties, operational restrictions, etc. and ultimately shut down the company.
A business license is essentially a document of permit or approval that allows the company or individual 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 Abu Dhabi Judicial Department website, 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 to guide the foreigner through all the government. If the company is being formed in a free zone, the company does not need to partner with a local Emirati.
Issuing a Business License in Abu Dhabi
A business license is a certificate that allows a natural person or a legal entity to practice a particular activity in compliance with the terms and conditions stipulated by the laws and regulations of the Department of Economic Department. The "Law No. (2) For the Year 2009 Concerning Issuance of Licenses in the Emirate of Abu Dhabi" regulates all types of commercial activities in Abu Dhabi and issuing of licenses. Under this law, no person, natural or legal may engage in practising any economic activity, or part of the activity, as the Department Decision stipulates, prior to obtaining a license, from the concerned authority, in conformity with all requirements set forth by laws governing the practising of that activity. The issuing of the license is the final stage, in the procedures for obtaining a trade license of any activity.
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 mention the type of business activity 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 include blacksmith, carpenter, printer, etc.
It is to be kept in mind that if you obtain a craft license, you also need to avail yourself of 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 offered annually to the person.
4. Industrial License
These licenses are provided to companies that 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 its talents or intellectual abilities to conduct business, a professional license is issued to the object. This license is usually granted to 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 yourself of a business setup consulting firm. One such firm is Commitbiz.
Commitbiz is a management consultancy firm that 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.