Types of Business Entities in Abu Dhabi

Abu Dhabi, the capital of the United Arab Emirates, is one of the world's most popular tourist attractions. It provides investors with several investment alternatives. Apart from being the most desirable place in every way, establishing a corporation is also simple thanks to straightforward and flexible company formation procedures.

One of the most important phases in registering an Abu Dhabi business is deciding on the legal form of the organization. The several corporate entities accessible in Abu Dhabi are listed here to assist one decide which one to use for their business.

But first, learn about Abu Dhabi's several jurisdictions. There are three primary jurisdictions where you can incorporate business. They are

Corporate structure

There are seven corporate structures that you can incorporate into Abu Dhabi mainland. They are

Limited Liability Company (LLC)

LLC company formation in Abu Dhabi is the most common business setup. It necessitates a minimum of two and a maximum of fifty stockholders. 

The liability of shareholders is limited to the number of shares available in the company's capital. In Abu Dhabi, the minimum capital required to establish an LLC is DH 150,000. 

Management is handled by a maximum of five chosen managers who are not necessarily firm employees. Non-UAE citizens are permitted to own up to 49% of a Limited Liability Company.

According to the Companies Law, an LLC may participate in any authorized business except insurance, banking, and money investment for others.

Limited Partnership

A limited partnership in Abu Dhabi is made up of one or more general partners who are jointly and severally accountable for all of the limited partnership's liabilities, and one or more limited partners who are solely liable for the limited partnership's responsibilities to the degree of his capital contribution. A limited partner may not participate in the management or have his name appear in the partnership's name. All general partners must be UAE citizens.

Joint Venture

A joint venture company is an arrangement between two or more natural individuals or legal organizations, with the joint venture contract governing its aims and terms. This agreement is not required to be registered in the Commercial Register.

A joint venture may only be conducted in the name of one of the UAE national partners.

Sole Proprietorship In Abu Dhabi

A sole proprietorship in Abu Dhabi is a single-person-owned firm, as the name implies. This sort of organization can be established by anyone of any nationality. 

However, only UAE and GCC nationals can possess an industrial or commercial single proprietorship, which must be 100% owned. If the owner is not a UAE national, a sole proprietorship is created through an LSA or Local Service Agent.

Private Shareholding Company in Abu Dhabi

A Private Joint Stock Company private shareholding company in Abu Dhabi is founded by a partnership of at least three shareholders for AED 2,000,000. Aside from professional enterprises, such legal entities are compatible with all types of industrial and commercial activity.

Public Share Holding Company in Abu Dhabi

A Public Joint Stock Firm or Public ShareHolding company in Abu Dhabi is a corporate entity with a minimum capital of AED 10,000,000 and transferable shares of equal value, with each shareholder accountable only for the amount of their stake in the company. 

The business name shall not be from any partnering investors during the business formation, except if the name is a patent of a shareholder or if the name is allowed to store belonging to the shareholder.

Branch Office in Abu Dhabi

A branch office in Abu Dhabi is a company's expansion of its operations. A foreign firm can have a branch office in Abu Dhabi, as can a UAE corporation. The branch office will serve as the company's regional headquarters. Importing products, on the other hand, is only permitted through a local trade business.

Abu Dhabi Free Zone Corporate Structure

When it comes to the free zone, these are the type of entities you can incorporate

Free Zone Company

A Free Zone Company is a legal organization with two to five stakeholders. Free zones are established in physically defined areas within Abu Dhabi.

Abu Dhabi free zones are the most sought-after free zones in the UAE after Dubai, with restricted advantages, specific incentives, and pro-trade regulations.

Branch of a Free Zone Company

A branch of a free zone firm begins in the UAE's free zone jurisdiction with the intention of expanding operations in other zones within the UAE. A branch office in an Abu Dhabi-free zone can be created on the mainland with a DED license if the owner is an Emirati shareholder.

Businesses that cannot create a local shareholder can obtain Ministry of Economy clearance and use the services of a Local Service Agent.

Free Zone Establishment

In Abu Dhabi, a Free Zone Establishment (FZE) is a single shareholder LLC that can be formed in the Abu Dhabi Free Zones. FZC, on the other hand, is comparable incorporation with various shareholdings (maximum five shareholders).

It is a smart option to opt for a skilled business consultant If you choose to stay out of these technicalities. Commitbiz offers you a wide range of services that leaves no stone unturned when it comes to business setup. Contact us today for more details


How many types of business entity are there in Abu Dhabi?

There are 7 types for mainland and 3 types for free zone.

What are the types of business entity in Abu Dhabi mainland company setup?

Following are the types of business entities in Abu Dhabi's mainland company setup

  • Limited Liability Company (LLC)
  • Limited Partnership
  • Joint Venture
  • Sole Proprietorship
  • Private Shareholding Company
  • Public Share Holding Company
  • Branch Office

What are the types of business entity in Abu Dhabi free zone company setup?

Following are the types of business entities in Abu Dhabi free zone company setup

  • Free Zone Company
  • Branch of a Free Zone Company
  • Free Zone Establishment

Should all general partners in limited partnership firm be UAE citizens?

Yes, all the general partners should be UAE citizens.

How many shareholders can a free zone establishment have?

A free zone establishment can have up to 5 shareholders.