How to start your business in Abu Dhabi on the right foot?
Although the UAE is famous for its unique and diverse tourist destinations, it offers much more to the global business community. The country is a nerve centre for direct foreign investment due to its open and dynamic economy, low tax rates, low import taxes and strategic location.
The government has made relentless efforts to simplify business operations in the UAE. A special focus has been on the capital. So, if you’re planning to open your own company or work on an expansion project for a big corporation, here is how to start a business in Abu Dhabi.
STEP-BY-STEP GUIDE ON BUSINESS SETUP IN ABU DHABI
Being the largest emirate in terms of area and home to the second-largest population of the UAE, the capital offers countless benefits to global businesses. It also provides excellent opportunities for SMEs and startups to aspire towards exponential growth. Furthermore, the amendment allowing 100% foreign ownership in the UAE has opened up numerous possibilities. Hence, many local and international companies have been considering starting a business in Abu Dhabi.
OPENING A BUSINESS IN ABU DHABI
The policies in the UAE are business-friendly. The government welcomes investment from local and global investors. Setting up a business in Abu Dhabi is a straightforward process.
Investors should follow these steps to establish a business in Abu Dhabi.
BUSINESS ACTIVITY
The first step is identifying the business/commercial activity. The legal requirements, as well as licensing fees, change depending on the nature of your business. There are six types of business licensing in the UAE: industrial, tourism, professional, commercial, agricultural and occupational. Once you have decided on your business type, you can proceed to the legal work.
LEGAL FORM OF BUSINESS
Choosing the ownership structure of the business is imperative when setting up a business in Abu Dhabi. There are different options to choose from. Due diligence is required when selecting a structure, as different rules and regulations apply to each legal form.
The options include:
- General partnership
- Limited partnership
- Limited liability company (LLC)
- Public joint-stock company (PJSC)
- Private joint-stock company (PrJSC)
- Civil company
- Local company branch
- GCC company branch
- Foreign company branch
- Free zone company branch
- Sole Establishment
- Holding companies
Please note that the legal form of your business must match the business activity.
TRADE NAME REGISTRATION
One of the critical steps when considering opening a business in Abu Dhabi is selecting your trade name. Once you have chosen a name, it must be registered with the Abu Dhabi Department of Economic Development (ADDED). However, a business name may be rejected if it doesn’t meet the following criteria:
- The proposed name cannot violate public order or public morals.
- The name cannot contain any names of governing authorities, religions or external bodies or logos.
- Any unique name must be followed by the acronym (legal form of the company), i.e., EST, PrJSC, etc.
- The name must be compatible with the proposed business activity.
- The name must be unique and should not have been previously registered by another business.
A payment voucher (or a transaction number) will be issued during the registration process. The cost can vary depending on the business type, and payment must be made within 30 days. ADDED only registers trade names. Trade name certificates are renewable. For trademark registration in the UAE, the relevant legal body is the Ministry of Economy.
OBTAINING INITIAL APPROVAL
After obtaining a trade name certificate, the ADDED issues initial approval to set up a business in Abu Dhabi. This initial approval allows an investor to apply for a business licence.
The relevant authority for approvals varies according to the type of business. Foreign investors must also seek approval from the General Directorate of Residency and Foreigners Affairs (GDRFA).
MEMORANDUM OF ASSOCIATION (MOA) OR A LOCAL SERVICE AGENT AGREEMENT (LSA)
The following legal forms of businesses require a Memorandum of Association:
- Limited partnership
- Limited liability company (LLC)
- Public joint-stock company (PJSC)
- Private joint-stock company (PrJSC)
The MoAs and all such agreements are prepared and attested by a notary public, courts and UAE-based law firms.
Any business owned by non-GCC residents has to have a local service agent on board. The agent serves as a representative of the company within government departments and facilitates registrations with various municipalities.
The court or a notary public attests to the agreement between the two parties.
ADDITIONAL GOVERNMENT APPROVALS
In certain cases, additional approvals from specific government entities may be required. These entities include:
- Ministry of Interior
- Ministry of Justice
- Local Municipal Department
- Telecommunications and Digital Government Regulatory Authority (TDRA)
- Executive Council
- Ministry of Economy
- Local Health Departments
- Supreme Petroleum Council
ISSUING OF THE BUSINESS LICENCE
Once you’ve completed all the above-listed steps on how to start a business in Abu Dhabi, you can collect the business licence from the service centres of the Economic Department. The licence can also be obtained through their websites. The following documents are required to get a licence for all the legal forms:
- Initial approval receipt
- All previously submitted documents
- Copy of lease contract duly attested by the Real Estate Regulatory Agency (RERA)
- Duly attested memorandum of association (for all company types)
- Approvals from other government entities
- Duly attested service agent contract (for civil establishments that are 100% owned by non-GCC nationals. This also involves local service agents.
ONLINE PROCESS FOR business setup in Abu Dhabi
You can receive your trade licence digitally without the need to visit a service centre. Investors can conveniently apply through secure government-backed digital platforms, making the process fully online. To proceed, you will require either an Emirates ID or the UAE Pass.
- Apply through TAMM for a commercial licence within minutes.
- Use the Bashr portal, which finalises approvals in just 15 minutes by linking federal and local authorities.
- Submit documents and pay fees online to get your licence.
Cost of business licence in Abu Dhabi
Setting up a business in Abu Dhabi offers various licence options to suit investors. The costs are as follows:
- Standard Economic Licence: AED 1,200
- Abu Dhabi Trader Licence: AED 790 – AED 5,500
- Mobdea Licence: AED 860 (For UAE-national females)
- Dual Licence: AED 1,200
- Virtual Licence: AED 790 – AED 5,500
- Freelancer Licence: AED 1,200
- Farm Licence (Agriculture and livestock): AED 790 – AED 5,500
Please note: Each licence covers up to six activities. Additional activities can be added at AED 100 each.
FAQS ABOUT Abu Dhabi company setup
What is the cost of starting a business in Abu Dhabi?
The cost varies depending on activity, legal form and location. While free zones like twofour54 have no minimum capital requirement, KIZAD require a capital investment of AED 150,000.
What considerations should I take into account when deciding between a mainland and free zone setup in Abu Dhabi?
When deciding on mainland vs free zone business setup in Abu Dhabi, consider your goals:
- Mainland setup offers flexibility to trade across the UAE and with government entities, often with fewer restrictions.
- Free zone setup allows full foreign ownership, tax exemptions and simplified procedures, but may limit direct trade with the local UAE market unless a distributor is appointed.
The final decision depends on the type of business you plan to open and the potential ownership structure.
HOW MANY FREE ZONES ARE IN ABU DHABI?
Currently, there are six major free zones in Abu Dhabi:
- Abu Dhabi Global Market (ADGM)
- Khalifa Industrial Zone Abu Dhabi (KIZAD)
- Masdar City Free Zone
- Abu Dhabi Airports Free Zone (ADAFZ)
- Industrial City of Abu Dhabi (ICAD)
- Twofour54 (the Media Zone Authority)
WHO CAN APPLY FOR A BUSINESS GOLDEN VISA IN THE UAE?
Entrepreneurs from all over the world can apply for the Golden Visa. You can refer to our guide to Business Gold Visa in the UAE for more information on the eligibility criteria and other requisites.
This concludes our guide on how to start a business in Abu Dhabi. In recent years, the UAE government has taken significant steps to simplify the process of opening a business in Abu Dhabi.
It is all about facilitating the investors. If you are still in the early stages of your planning, considering free zones in Abu Dhabi might be a good idea. Depending on your business activity, you can also apply for a freelancer’s permit in Abu Dhabi.
If your field of business is energy, reading about the UAE oil and gas companies can be useful.
