Types of Business Entities in Abu Dhabi

Abu Dhabi, the capital of the UAE, is one of the most favoured destinations in the world. It offers ample investment opportunities to investors. Apart from being the most sought-after locations in all aspects, incorporating a business is also hassle-free due to transparent and flexible company set up procedures.

Before registering an Abu Dhabi business, one of the essential steps is to decide on the legal structure of the company. Listed below are the different corporate entities available in Abu Dhabi and can help one determine which one to choose for their business.

But first, understand the different jurisdictions in Abu Dhabi.

There are three primary jurisdictions, namely –

  1. Abu Dhabi Mainland
  2. Abu Dhabi Free Zone
  3. Abu Dhabi Offshore

Corporate Structures in Abu Dhabi Mainland

Here the different business entities available in mainland Abu Dhabi.

1.Limited Liability Company (LLC)

An LLC is the most preferred form of business setup in the UAE. It requires having a minimum two and maximum of fifty shareholders. Shareholder’s liability is limited to the number of shares available in the company’s capital. The minimum capital needed to set up an LLC is DH 150,000 in Abu Dhabi. Management is handled by not more than five nominated managers, who are not necessarily members of the company. Non-UAE nationals may own up to 49 per cent of a Limited Liability Company.

The Companies Law provides that an LLC may engage in any lawful activity except insurance, banking and investment of money for others.

2.Limited Partnership

A limited partnership comprises one or more general partners who are jointly and severally liable for all its obligations and one or more limited partners who are responsible for the obligations of the limited partnership only to the extent of his capital contribution. A limited partner may not participate in the management or have his name appear in the name of the partnership. All general partners must be the UAE nationals.

3.Joint Venture

A joint venture in Abu Dhabi is an agreement between two or more natural persons or legal entities, and its objectives and terms are governed by the joint venture contract. This agreement is not subject to registration in the Commercial Register.

A joint venture may be carried out only in the own name of one of the UAE national partners.

4.Sole Proprietorship

As the name suggests, a sole proprietorship is a single-person-owned business. An individual of any nationality can set up this type of structure. But, only UAE and GCC Nationals can own a sole proprietorship that is industrial or commercial, which must be owned 100%. If the owner is not a UAE national, an LSA or Local Service Agent is chosen for opening a sole proprietorship.

5.Private Shareholding Company

A Private Joint Stock Company is formed through a partnership of AED 2,000,000 from at least three shareholders. Such legal entities are compatible with all sorts of industrial and commercial activities besides professional businesses.

6.Public Shareholding Company

A Public Joint Stock Company is defined as a corporate entity whose capital is a minimum of AED 10,000,000 with shares transferable of equal value with each shareholder liable only to the extent of their share in the company. During the business incorporation, the business name must not be from any partnering investors, except if the name is a patent of a shareholder or if the name is entitled to store belonging to the shareholder.

7.Branch Office

The branch office is an extension of business by a company. One can have a branch office of a foreign company, a branch office of a UAE company in Abu Dhabi. The branch office will function as its headquarters in the region. However, the import of goods is only permissible through a local trading firm.

Corporate Structures in Abu Dhabi Free Zone

Here the different business entities available in free zone Abu Dhabi.

1.Free Zone Company

Free Zone Company is a multi-shareholder legal structure comprising 2 to 5 stakeholders. Free zones are incorporated under geographically defined jurisdictions spread all across Abu Dhabi. With limited benefits, specialized incentives and pro trading policies, Abu Dhabi free zones are the most sought-after free zones in the UAE, after Dubai.

2.Branch of a Free Zone Company

A branch of a free zone company initiates from UAE’s free zone jurisdiction with the purpose to enlarge operations in other zones across UAE. A branch office in Abu Dhabi free zones can be opened in the mainland by acquiring a license from DED, given the owner has an Emirati shareholder. Businesses who cannot produce a local shareholder can get approval from the Ministry of Economy and benefit the services of a Local Service Agent.

3.Free Zone Establishment

Free Zone Establishment (FZE) in Abu Dhabi is a single shareholder LLC which can be incorporated in the Abu Dhabi Free Zones. However, FZC is also a similar incorporation with multiple shareholding (maximum five shareholders).

Now that you have so many options through which you can set up your Abu Dhabi business, what are you waiting for? Start a business in Abu Dhabi today!

Commitbiz for your Business Setup in Abu Dhabi

But, it can be difficult to register a business if one is not aware of the rules and regulations. That is where business setup consultants in the UAE like Commitbiz come into the picture. Our experts have years of experience in this field and can make the process easy. Contact us today, and we will assist you in starting your business in Abu Dhabi in a hassle-free manner.