Business Setup in Abu Dhabi

Mastering Business Setup in Abu Dhabi: Your Complete Guide to Establishing Success in the UAE Capital

Abu Dhabi stands out as a vital hub for global entrepreneurs and investors seeking to establish new ventures, with investments exceeding a trillion dollars in the city.

The UAE boasts a robust economy, ranking as the second-largest in the GCC nations. Abu Dhabi, renowned for its accessibility to diverse markets and rapid market expansion, emerges as a premier destination for business establishment.

The process of initiating a business in Abu Dhabi proves relatively straightforward and swift, often taking just a few days, contingent upon the business type and location. However, engaging the services of a business setup consultant may be advisable during the inception phase.

Benefits of Business Setup in Abu Dhabi

Cost-Effective Setup: Conducting business in Abu Dhabi is straightforward and cost-effective. Mainland license holders are not required to maintain a minimum share capital and are exempt from annual audits in most cases.

Enhanced Business Opportunities: With an Abu Dhabi Mainland License, you can operate throughout the UAE, accessing a larger consumer base and boosting your company’s potential for growth and revenue.

Extended License Validity: Abu Dhabi offers commercial licenses with a two-year validity, reducing the hassle and expenses associated with annual renewals.

Affordable Office Spaces: Renting or leasing office space in Abu Dhabi is affordable, offering flexibility for businesses to find suitable locations within their budget.

Tourism Sector Development: Abu Dhabi’s global reputation as a top tourist destination, hosting major events, contributes to the continual growth of its tourism sector, creating additional business opportunities.

Government Contract Access: Mainland license holders can bid for government contracts, expanding revenue potential through participation in various government-funded projects.

Repatriation of Capital and Profits: Mainland companies in Abu Dhabi enjoy the freedom to repatriate 100% of their profits and capital without restrictions. Additionally, holding a Mainland license grants 100% ownership and exempts businesses from income taxes, with only a 5% Value Added Tax (VAT) being applicable.

Types of Business Formation in Abu Dhabi

In Abu Dhabi, entrepreneurs have the option of setting up their businesses either in a Free Zone or on the Mainland.

Free Zone Company in Abu Dhabi:

Abu Dhabi’s Free Zone offers diverse business opportunities across various sectors. Setting up a company here involves streamlined processes through a single administrative window, allowing expatriate entrepreneurs complete ownership (100%) of their ventures. The Abu Dhabi Free Zone Authority facilitates seamless company registration, issuing licenses for consultancy, commercial trading, and branches of foreign companies.

Abu Dhabi Mainland Company:

Businesses established outside Free Zones, known as Mainland companies, fall under the jurisdiction of the UAE government. While they have the flexibility to trade within the mainland, they are restricted from trading within Free Zones. Recent amendments to the Commercial Companies Law (CCL) now permit expatriates to hold full ownership of mainland businesses, a change from the previous 49% ownership requirement.

Steps to Start a Business in Abu Dhabi:

Identify Economic Activities: Determine the nature of business activities to understand legal and economic requirements, including necessary licenses.

Find a Local Sponsor: For foreign companies establishing branch offices, a local sponsor (UAE national or service agent) is required, though recent changes have limited this requirement to specific sectors.

Choose Legal Form: Decide on the appropriate legal structure for the business, considering options such as Private/Public Joint Stock Companies, Limited Liability Companies, and others.

Register Trade Name: Register a unique trading name through the Department of Economic Development (DED) to prevent unauthorized use by other entities.

Obtain Licenses: Acquire the necessary licenses, permits, and approvals pertinent to the business type, including tourism, occupational, commercial, industrial, and professional licenses.

Secure Initial Approval: Obtain preliminary approval from the General Directorate of Residency and Foreigners Affairs – Abu Dhabi, along with other required documents such as passport copies and a No Objection Certificate.

Obtain Special Approvals: Depending on the nature of the business, special approvals may be necessary from various government bodies such as the Central Bank, Medical Council, and Telecommunication Regulatory Authority, among others.

Ensuring compliance with all regulations and obtaining the required approvals is essential for a smooth business setup process in Abu Dhabi.

Types of Abu Dhabi Business licenses forĀ  new companies

Securing the right business license is crucial for new companies venturing into Abu Dhabi. Different licenses cater to various business activities:

Industrial License: Compulsory for manufacturing, processing, or production entities.

Commercial License: Needed for trading, import/export, and other commercial ventures.

Professional License: Essential for firms providing professional services such as consultancy, legal, accounting, medical, and engineering.

Beyond these categories, specialized licenses exist for sectors like healthcare, education, and media. The type of license required depends on the nature of the business activities. Some companies may even need multiple licenses to operate effectively.

Establishment Expenses for Free Zone Businesses

Startup costs for businesses in Abu Dhabi’s free zones can vary based on factors such as the nature of activities, location, and visa requirements. The overall business establishment expenses may include:

  • Registration Fee (One-time Payment)
  • Name Reservation Fee (One-time Payment)
  • Annual License Fee
  • Share Capital Requirement
  • Annual Rental for Business Locations
  • Visa Fee per Person (Each visa is valid for 3 years)

Cost of Establishing a Business in the Mainland

The overall setup cost for businesses in Abu Dhabi’s mainland is influenced by factors like structure, activity, visa requirements, and premises. Here’s a breakdown of expenses:

Government and Third-Party Fees

  • Trade License fees
  • Notary fees
  • Legal translations
  • Typing centers
  • Government department registrations (combination of one-time and annual fees)

Incorporation Fees

  • Document submission
  • Arrangement of approvals and inspections (incurred once during setup)
  • Legal Fees (one-time payment)
  • Annual Commercial Premises Fee
  • New Company Registration with Immigration and Ministry of Labor (one-off, with Establishment card renewal every three years)
  • Visa Fee per Person (lasts almost 2 years)

Cost of starting a business in Abu Dhabi

The initial cost of starting a business in Abu Dhabi is typically AED 12,500*. For mainland licenses, total setup costs generally range from AED 15,000* to AED 25,000*, taking into account business intricacies and the number of visa applications.

CompleteĀ  Business Setup Support by Elevate Accounting & Auditing

Embarking on the journey of establishing a business in Abu Dhabi can be intricate, but Elevate Accounting & Auditing is here to provide comprehensive assistance at every stage. Our services not only offer insights into the cost of setting up a company in Abu Dhabi but also encompass all aspects related to company formation. For further information, do not hesitate to reach out to us today.

Expert Guidance for Business Formation

Navigating the complexities of starting a business in a foreign land can be challenging. Therefore, it is advisable to seek support from seasoned company formation consultants in Abu Dhabi.

At Elevate Accounting & Auditing, we offer a range of services to facilitate your business setup process, including:

  • Establishment of Branch Offices in Abu Dhabi
  • Public Relations Officer (PRO) Services
  • Value Added Tax (VAT) Registration
  • Intellectual Property Protection
  • Accounting and Bookkeeping
  • Business Registration
  • Local Sponsorship
  • Tax Consulting
  • Legal Advisory
  • Auditing

For all your business setup needs in Abu Dhabi, contact us, and we will gladly assist you every step of the way.