Business Setup in Abu Dhabi

Abu Dhabi is a critical hotspot for global entrepreneurs and investors who want to develop new businesses, with over a trillion dollars invested in the city.

UAE has a very strong economy, with the second-largest economy in the GCC nations. Abu Dhabi is one of the best locations for setting up a business as it has easier connections to markets in different countries and also it has a fast-growing market.

The process of business setup in Abu Dhabi is fairly easy and simple and also it takes only a few days to set up a new business here, depending upon the type of business and the location, however, you might require the assistance of a business set up consultant during the inception of the business.

Business Setup Cost in Abu Dhabi

The Abu Dhabi Department of Economic Development (ADDED), in partnership with other government entities, including the Abu Dhabi Chamber of Commerce, has slashed business setup fees by over 90%, i.e., to Dh 1,000. The new fee structure has been effective from 27th July 2021.

The new rate will see the scrapping of some fees that were previously payable to different public bodies. The reduced cost applies to six activities within the business license.

It will cover all fees from Abu Dhabi government entities like ADDED, the Department of Municipality and Transport, membership fees for Abu Dhabi Chamber, CoC (Certificate of Conformity) issuances fees, and fees required by Abu Dhabi regulating entities dependent on the type of business.

Here is a table describing the tentative Business Setup Costs in Abu Dhabi.

Authorities Involved in Incorporating Business in Abu Dhabi

The following authorities are involved in business setup in the Emirate.

Department of Economic Development (DED)

The various services offered by the DED to existing businesses as well as new enterprises through their administrative office and the official online e-portal are –

• Issuing Trade License
• Reserve Trade Name
• Renew Trade Name
• Renew Trade License
• Issue Initial Approval
• Issue Branch Initial Approval
• Print License
• License Activities' Terms and Conditions
• Manage License Contact
• Pay Inspection Fines
• Update Mobile Number
• Issue Legal Contract for License
• Issue Legal Contract
• Approve Legal Contract
• Print Legal Contract.

Commercial Registration Department

The applicants must apply for necessary permits and trade licenses with the DED. Moreover, the company's Memorandum of Association (MoA) must be notarized by the DED post, in which the cumulative documents must be submitted to the Company Registration Department.

Types of Business Formation in Abu Dhabi

You can choose between a Free Zone and a Mainland Business Setup in Abu Dhabi.

Free Zone Company Abu Dhabi

Abu Dhabi's free zone provides several business opportunities in different business sectors. Free Zone company formation here offers single-window administration, meaning that a businessman can submit all the necessary information and details to a single agency and is authorized as an independent jurisdiction allowing an expatriate businessperson to have complete ownership of the company (100 %).

Abu Dhabi Free Zone Authority provides a perfect gateway for the smooth registration of companies in the Emirate. The free zones issue licenses for:

• Commercial Trading Business
• Consultancy Business
• Branch of a Foreign Company.

Abu Dhabi Mainland Company

A Mainland can be defined as a geographical area that is outside of a Free Zone and which falls under the UAE government. These commercialized areas have the option to trade within the mainland but cannot make trade in the Free Zones.

They have regularized policies and legal guidelines, which makes the emirate one of the most developed economies in the Emirates. A mainland company in Abu Dhabi can carry out business across the UAE now with an amendment in the Commercial Companies Law (CCL) which was applicable from 1 June 2021 (allowing ex-pats to hold 100% ownership of the business).

Earlier, the ownership of a company was only 49% by the ex-pat and the rest by a local sponsor.

How to Start a Business in Abu Dhabi?

Setting up a business in Abu Dhabi can be a very beneficial decision as the business will have access to the markets of various regions, and also there will be an ample and expert workforce that will assist in business setup in the Emirate, but an error during the setup process and can result in future problems for the business.

Below are the steps to be followed for setting up a company in Abu Dhabi:

1. Determine the Type of Economic Activities

It is very important to understand the type of business activity to be performed by the business. This will help in understanding all the requirements to be fulfilled by the company, both legally and economically.

It will also help in understanding which licenses will be required for conducting the business activity without any hindrance.

2. Find a Local Sponsor

As per the UAE jurisdiction, foreign companies need a local sponsor (a service agent or a company owned by UAE nationals) to open a branch office in Abu Dhabi. A local sponsor will facilitate the necessary licenses for the branch office without bearing any liability for capital contribution or losses. With the recent amendment, the requirement for a local sponsor has been limited to only certain sectors.

You can consult our business setup experts to know more about the requirement of a Local Sponsor.

3. Determine the Legal Form of the Business

Rules and regulations are different for different ownership types and business establishments. Before establishing a business, the management needs to figure out which business structure will be the most suitable.

Here are a Few Legal Entities:

• Limited liability Company (LLC)
• Joint Liability Company
• Simple Commandite Company
• Private Joint Stock Company (PR JSC)
• Public Joint Stock Company (PJSC).

Other Types of Companies:

• Civil Company
• Sole Establishment
• GCC Company Branch
• Local Company Branch
• Foreign Company Branch
• Foreign companies' representative offices
• Free zone company branch.

4. Register Your Trade Name

Registering a trading name is very important for a business, as any other organization in the country cannot use the trade name once registered. We help our clients set up a business in Abu Dhabi and register a trading name from the list of registered trade names provided by the Department of Economic Development (DED).

5. Fulfil Licensing Requirements

Apart from licenses, many other permits and approvals are required, and to start a business, the management needs to acquire them.

License Types

Some of the license types are as follows:

⮚Tourism

The Abu Dhabi Tourism and Cultural Authority issues a tourism license. This license is granted to companies offering tourism-related services like hotels, travel agencies, boat rentals, and so on.

⮚Occupational

An occupational license is for businesses that involve individuals using their talents, mentaland intellectual capabilities, and abilities to serve clients.

⮚Commercial

A commercial license is issued to the companies involved in business activities like public trading companies, construction and real estate, hospitals and clinics, and business contractors.

⮚Industrial

An industrial license is issued to the businesses that wish to set up manufacturing operations in Abu Dhabi.

⮚Professional

A professional license is issued to professionals and artisans who are involved in the operation of a specific craft. Examples of professional licenses include carpentry, steelwork, and smithery.

6. Obtain the Initial Approval

The foreign businessman must get approval from the General Directorate of Residency and Foreigners Affairs - Abu Dhabi before starting the process to set up a business. We help our clients get all the necessary approvals from the concerned officials, including the DED, and help them pay legal the fee for getting a business license issued.

Documents Required for Preliminary Approval

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

7. Get Special Approvals

Many businesses require special approvals or permits which can be obtained after contacting the relevant authorities. 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.

Our Business Setup Services in Abu Dhabi

It can be challenging to go through all these steps alone in a foreign land. Hence it is advised to get help from company formation consultants in Abu Dhabi.

We at Commitbiz are business setup consultants and can help you with the following services:

• Business Registration
• Local sponsorship
• Public Relations Officer (PRO) services
• Accounting and bookkeeping
• Auditing
• Tax consulting
• Value Added Tax (VAT) registration
• Legal advisory
• Setting up a branch office in Abu Dhabi
• Intellectual property protection.

So, for business setup services in Abu Dhabi, contact us, and we'll be glad to assist.