How to Start a Business in Abu Dhabi
The UAE’s largest, wealthiest, and 2nd most densely-populated Emirate of Abu Dhabi – is one of the hottest business destinations in the Middle East! The 1.2 million-strong city is one of the most innovative and fastest-growing private sectors in the Arab World. In this blog, we will outline the opportunities and the steps of how to start a business in Abu Dhabi the capital of the UAE!
What are the benefits of an Abu Dhabi-based business?
Abu Dhabi’s is the key influencer of the UAE’s business laws. The Emirate accounts for 95% of the UAE’s oil reserve, however, Abu Dhabi’s non-oil trade reached Dh121.5 billion (USD $33.08b) in the first 7 months of 2019. With an Abu Dhabi-based business, you can benefit from:
- A popular, independent, and whitelisted offshoring jurisdiction
- A flexible & transparent company formation process
- A convenient location for trade with Africa, Europe, and Asia
- The possibility of 100% foreign ownership
- The exemption from personal and corporate taxation
- One of the highest standards of living, safety, healthcare facilities, entertainment, and infrastructure
- A lack of trade barriers, restrictions, and regulatory pressures
- Government initiatives and laws promoting start-up companies
- Access to large sums of investment capital and bank financing
How can I set up a business in Abu Dhabi?
First off, we will need to determine the jurisdiction in which your business will be incorporated. There are 2 company formation options – Mainland & Free Zone.
What are the benefits of operating in Abu Dhabi’s Mainland?
Having the strongest influence over the UAE’s economic decisions, it is no surprise that Abu Dhabi enjoys a standardized and stable legal landscape. The capital’s political stability is paired with world-class infrastructure.
- Mainland companies have no trading restrictions when compared to Free Zones
- They have access to the entirety of Abu Dhabi, even its free zones
- The scope of business activities is not limited by the trade license
How do I acquire a Mainland business license in Abu Dhabi?
Whether you are retailing products such as groceries, offering hairstyling, or technical services – you will benefit most from a mainland business license. All mainland licenses require a local sponsor or service agent (UAE National/Emirati) who will own a minimum of 51% of the company’s share capital. The following steps are:
- You will need to first select your business type (legal form) as well as the business activity(s) which the business will conduct.
- The legal form is determined by the ownership structure and the parties involved in the business’s activities.
- Register your trade name, contact us for the terms & conditions of this step.
- Get the initial approval from the Abu Dhabi Department of Economic Development (ADDED).
- Gather external approvals, the government bodies must be relevant to your business activity.
These approvals are applicable to the insurance, transportation, legal, and specialized equipment trading (e.g. selling firefighting tools) activities. For information on which government entities are relevant to your business activity contact one of our specialist advisors.
- Expatriate/Foreign investors must receive approval from the General Directorate of Residency and Foreigners Affairs (GDRFA).
- Choose your office location, receive your tenancy contract and Ejari certificate.
The premises must comply with the standards set out by the ADDED as well as the Abu Dhabi City Municipality. Multiple trade licenses are allowed for each location. However, your local partner, sponsor, or service agent must also be the owner of the new license (majority stake minimum of 51%). One office cannot exceed 10 licenses. Each license has a minimum office space requirement of 200ft2.
- Finalize the paperwork, pay your fees, and receive your business license!
What are the benefits of setting up a Free Zone Company in Abu Dhabi?
The free zones of Abu Dhabi focus on developing the knowledge economy of the emirate as well as its international trade. Free Zone Authorities work to offer a cost-efficient business structure to investors and entrepreneurs alike. However, you will require expert advice and business planning to utilize the most appropriate infrastructure and license type. The benefits are as follows:
- Full expat ownership of the business
- 100% profit and capital repatriation
- Personal and corporate tax exemption
- Import and export custom fee exemption for goods and services
- Optimized, world-class infrastructure
- Business-friendly environment and legal framework
- Accessible immigration process
- Access to skilled human capital
- The formal process is limited to only one Free Zone Authority, as opposed to mainland firms who deal with multiple government bodies.
Dubai Business Advisors will provide you with extensive information regarding the formal procedures, licensing, ownership structures, and capital requirements of a free zone license. We will ensure your UAE business is tax optimized, cost-effective, and ready to tackle your chosen market. If you require assistance with visa allocation, bank account opening, licensing, and permits – send an inquiry to one of our UAE market-entry specialists.
How do I acquire a Free Zone license in Abu Dhabi?
On the other hand, you can license your business in one of Abu Dhabi’s Free Zones, such as:
- Abu Dhabi Airport Free Zone (ADAFZ)
- Abu Dhabi Ports Company Free Zone (ADPC)
- Abu Dhabi Global Markets Free zone (ADGMFZ)
- Industrial City of Abu Dhabi
- Higher Corporation for Specialized Economic Zones (ZonesCorp)
- Masdar City Free Zone
- Khalifa Industrial Zone Abu Dhabi (KIZAD)
Abu Dhabi’s 8 free zones help diversify the Emirate’s private sector and boost its economy by attracting foreign investment. Free Zones typically focus on media, logistics, importing, re-exporting, and industrial activities. Free Zone Authorities (FZAs) are responsible for license issuance to expat-owned (foreign) companies in the UAE. There are 4 types of licenses:
- Free Zone Limited Liability Company
The Free Zone LLC is legally independent to its corporate and/or individual shareholders. For information on the minimum capital requirements, get a quote from us.
Unlike Free Zone LLCs, freelancers are sole practitioners who operate under their legal name.
- Branch of a UAE Company
UAE-based companies can setup both free zone and mainland branches
- Branch of a Foreign Company
The Abu Dhabi Chamber of Commerce and Industry, as well as the Ministry of Economy, can permit a foreign company (not licensed in a UAE Free Zone) to set up an office or branch with the help of a registered agent, such as DBA.
How do I set up a business in an Abu Dhabi free zone?
You will require:
- A portfolio & CV (in the case of you applying for a freelance permit)
- Passport copies of all of the shareholders
- Passport photographs with white backgrounds
- Multiple suggested trade names
- Company Application Form
- A quota of requested visas
- Evidence of residence in 2 addresses
- Professional or Bank Reference Letter
- Some Free Zones will require additional documents, contact us for details
Once Dubai Business Advisors help arrange the needed documents, we will help you:
- Select your Free Zone
Free Zones are limited to certain activities or sectors, such as logistics, media, aviation, shipping, financial services, manufacturing, and energy. The free zones of Abu Dhabi are optimized to accommodate the activities listed above.
- Select an available Trade Name
Once you select your free zone and activity, you will register your company’s trade name. Typically, the registrant will suggest multiple trade names and the Free Zone Authority will approve and register one of them.
- Receive Investor Approval
- Receive the full Free Zone license!
Dubai Business Advisors are your registered agents and UAE market entry experts! We offer you our 17 years of expertise in:
- Management Consultancy
- Pro Assistance
- Mainland Business Licenses
- Free Zone Business Licenses
- Business Planning
Phone: +971 4 341 9701