Starting Business in Abu Dhabi in 10 Steps

Opening a company in Abu Dhabi, the capital of the United Arab Emirates, offers a wealth of opportunities for entrepreneurs and businesses alike. The city’s strategic location, robust economy, and business-friendly environment make it an attractive destination for investors worldwide. In this article, we’ll walk you through the steps to open a company in Abu Dhabi, ensuring a smooth and successful start to your business venture.

Abu Dhabi, the capital of the United Arab Emirates, is renowned for its robust economy, strategic location, and business-friendly environment. With a thriving market and a wealth of opportunities for entrepreneurs, it is an attractive destination for starting a business. This article aims to guide you through the process of opening a company in Abu Dhabi, ensuring a smooth and successful start to your business venture.

Opening a Company in Abu Dhabi

Abu Dhabi Free Zones Features License Types and Costs

Free Zone	Key Features	License Types	Costs
Khalifa Industrial Zone (KIZAD)	– Strategic location<br>- Integrated logistics<br>- Competitive utilities<br>- One of the largest industrial zones in the region	– Industrial<br>- Logistics<br>- Trade<br>- Service	– License fee: AED 9,000 – AED 20,000/year<br>- Office space: Starting from AED 1,000/month<br>- Warehouse: Custom pricing based on size
Abu Dhabi Global Market (ADGM)	– Financial center<br>- Common law framework<br>- International arbitration<br>- Business-friendly regulations	– Financial<br>- Professional<br>- Retail<br>- Tech	– License fee: AED 25,000 – AED 50,000/year<br>- Office space: AED 3,000 – AED 5,000/month<br>- Flexi-desk options available
Masdar City Free Zone	– Sustainability-focused<br>- Tech and innovation hub<br>- Eco-friendly infrastructure	– Renewable energy<br>- Clean tech<br>- IT<br>- Media	– License fee: AED 10,000 – AED 20,000/year<br>- Office space: AED 1,500 – AED 3,000/month<br>- Flexi-desk options available
Twofour54	– Media and entertainment hub<br>- State-of-the-art facilities<br>- Production support	– Media<br>- Broadcasting<br>- Publishing<br>- Digital	– License fee: AED 15,000 – AED 20,000/year<br>- Office space: AED 2,000 – AED 4,000/month<br>- Production studios: Custom pricing
Abu Dhabi Ports Free Zone	– Strategic port location<br>- Logistics and trade focus<br>- Access to global markets	– Trade<br>- Logistics<br>- Industrial<br>- Service	– License fee: AED 9,000 – AED 15,000/year<br>- Office space: AED 1,000 – AED 2,500/month<br>- Warehouse: Custom pricing based on size

Abu Dhabi Free Zones Features License Types and Costs

Step 1: Determine the Business Activity

The first step in opening a company in Abu Dhabi is to determine the type of business activity you intend to conduct. The UAE has a wide range of business activities categorized into different sectors, including commercial, industrial, professional, and tourism. Identifying your business activity will help you understand the specific requirements and licenses needed for your company.

Pre-Requisites

Business Activity

Before starting a company, it’s essential to determine the type of business activity you plan to engage in. Abu Dhabi offers a wide range of business activities categorized into commercial, industrial, professional, and tourism sectors. Choosing the right business activity is crucial as it determines the specific licenses and approvals required.

Commercial Activities: Involve buying and selling goods, trading, and retail services.
Industrial Activities: Focus on manufacturing, processing, and production.
Professional Activities: Include consultancy, legal services, and other professional services.
Tourism Activities: Cover hospitality, travel agencies, and entertainment services.

Step 2: Choose a Legal Structure

Selecting the appropriate legal structure for your company is crucial as it affects your business operations, liability, and regulatory requirements. The common legal structures in Abu Dhabi include:

Limited Liability Company (LLC): Suitable for most business activities and allows foreign investors to own up to 49% of the company.
Sole Proprietorship: Owned by a single individual and suitable for professional or consultancy services.
Civil Company: Ideal for professional services and partnerships among individuals.
Branch Office: Allows foreign companies to establish a presence in Abu Dhabi without forming a separate legal entity.

Legal Structure

Selecting the appropriate legal structure is vital as it affects ownership, liability, and regulatory requirements. The common legal structures in Abu Dhabi include:

Limited Liability Company (LLC): Suitable for most business activities and allows foreign investors to own up to 49% of the company.
Sole Proprietorship: Owned by a single individual and suitable for professional or consultancy services.
Civil Company: Ideal for professional services and partnerships among individuals.
Branch Office: Allows foreign companies to establish a presence in Abu Dhabi without forming a separate legal entity.

Step 3: Reserve a Trade Name

Choosing a unique trade name for your company is an essential step in the registration process. The trade name should reflect the nature of your business and comply with the naming conventions set by the Department of Economic Development (DED) in Abu Dhabi. Once you have chosen a trade name, you can reserve it through the DED’s online portal or service centers.

Each structure has its own advantages and implications, so choose one that best fits your business model.

Key Steps

Trade Name Registration

The first formal step in the registration process is choosing and registering a trade name. The trade name should reflect the nature of your business and comply with the naming conventions set by the Department of Economic Development (DED) in Abu Dhabi.

Choosing a Trade Name: Ensure it is unique and not already in use. The name should not violate public morals or public order.
Obtaining Approval: Submit your chosen trade name for approval through the DED’s online portal or service centers. This approval is crucial before proceeding with other steps.

Step 4: Obtain Initial Approval

Initial approval from the DED is required before proceeding with the company registration process. This approval indicates that the UAE government has no objection to you starting a business in Abu Dhabi. You will need to submit an application form along with the necessary documents, such as:

Passport copies of the shareholders
Copy of the reserved trade name certificate
Details of the business activity and legal structure

Initial Approval

After securing your trade name, the next step is obtaining initial approval from the DED. This approval indicates that the UAE government has no objection to you starting a business in Abu Dhabi.

Required Documents: Passport copies of the shareholders, the trade name certificate, and details of the business activity and legal structure.
Application Process: Submit the application form along with the necessary documents to the DED.

Business Location

Choosing an appropriate business location is essential. Your business premises should align with your business activity and comply with the legal requirements set by the Abu Dhabi Municipality.

Leasing a Commercial Space: Secure a tenancy contract for a commercial space that suits your business needs.
Location Compliance: Ensure the premises meet the regulatory standards for health, safety, and zoning laws.

Step 5: Draft a Memorandum of Association (MOA)

The Memorandum of Association (MOA) outlines the company’s structure, ownership, and operational procedures. It is a crucial document that needs to be drafted and notarized. For an LLC, the MOA should include details about the shareholders, capital distribution, and management structure.

Company Formation

Creating essential documents such as the Memorandum of Association (MOA) and, if applicable, the Local Service Agent (LSA) agreement is a critical step in the company formation process.

Memorandum of Association (MOA): This document outlines the company’s structure, ownership, and operational procedures. It must be notarized and include details about shareholders, capital distribution, and management structure.
Local Service Agent (LSA) Agreement: For certain business types, an LSA agreement may be required. The LSA, typically a UAE national, acts as a representative without owning shares in the company.

Business License

Obtaining a business license is mandatory to legally operate your company in Abu Dhabi.

Application Process: Submit the required documents, including the MOA, tenancy contract, and initial approval certificate, along with the applicable fees to the DED.
Specific Licenses: Depending on your business activity, you may need additional licenses, such as a commercial license, professional license, or industrial license.

Visas

Obtaining visas for yourself and your employees is an essential part of setting up your business.

Owner’s Visa: As the business owner, you will need to apply for an investor visa.
Employee Visas: Sponsor visas for your employees, ensuring you comply with the UAE’s labor and immigration laws.

Additional Considerations

Abu Dhabi Mainland Business Costs Breakdown

Category	Details	Costs	Notes
Business License	– Trade, professional, industrial, or tourism licenses available	AED 10,000 – AED 30,000/year	Depends on business activity and type of license
Initial Approval	– Approval from the Department of Economic Development (DED)	AED 1,000 – AED 2,000	Required before registering the trade name
Trade Name Registration	– Registering the business name with DED	AED 500 – AED 1,000	Approval subject to availability and compliance with naming regulations
Office Space Rental	– Leasing commercial space in Abu Dhabi mainland	AED 50 – AED 250 per square meter/month	Costs vary based on location, size, and amenities
Memorandum of Association (MOA)	– Drafting and notarizing the MOA	AED 2,000 – AED 4,000	Legal document outlining the company’s structure and shareholders
Local Sponsor Fees	– Fees for local sponsor or service agent	AED 5,000 – AED 50,000/year	Required for foreign investors to comply with UAE ownership laws
Visa Costs	– Employee visa processing and sponsorship	AED 4,000 – AED 7,000 per visa	Includes medical tests, Emirates ID, and visa stamping
Medical and Insurance	– Health insurance and medical tests for employees	AED 1,000 – AED 2,000 per employee/year	Mandatory for all employees under UAE labor law
Miscellaneous Fees	– Additional approvals, licenses, and permits	AED 2,000 – AED 5,000	Depending on the business activity, such as municipality fees, industry-specific approvals
PRO Services	– Professional services for handling government paperwork	AED 5,000 – AED 15,000/year	Optional, but useful for efficient processing of documents and renewals

Abu Dhabi Mainland Business Costs Breakdown

Government Approvals

Certain business activities require additional approvals from relevant government authorities. For example, healthcare businesses need approval from the Health Authority, and food services require approval from the Food Control Department.

Banking and Taxes

Opening a corporate bank account is essential for your business operations.

Bank Account: Choose a reputable bank in Abu Dhabi and provide necessary documents such as the trade license, MOA, and shareholders’ passport copies.
Tax Considerations: Understand the tax regulations in the UAE. While there is no personal income tax, businesses may be subject to VAT and other applicable taxes.

Depending on your chosen legal structure, you may need a local sponsor (for LLCs) or a service agent (for sole proprietorships and civil companies). A local sponsor is a UAE national who holds a 51% share in the company, while a service agent acts as a representative without owning any shares. Finding a reliable and trustworthy local sponsor or service agent is essential for the smooth operation of your business.

Step 7: Lease Business Premises

Having a physical address is mandatory for company registration in Abu Dhabi. You need to lease a commercial space that is suitable for your business activity. Ensure that the premises comply with the regulations set by the Abu Dhabi Municipality and obtain a tenancy contract.

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Step 8: Obtain Required Licenses

Depending on your business activity, you may need additional licenses and permits from various government authorities. These could include:

Commercial License
Professional License
Industrial License
Tourism License

Submit the required documents and fees to the DED and other relevant authorities to obtain the necessary licenses.

Step 9: Register with the Chamber of Commerce

Registering your company with the Abu Dhabi Chamber of Commerce and Industry (ADCCI) is mandatory. This registration provides your business with access to a wide range of resources, networking opportunities, and support services.

Step 10: Open a Corporate Bank Account

Finally, open a corporate bank account with a reputable bank in Abu Dhabi. You will need to provide the bank with the necessary documents, including:

Trade license
MOA
Shareholders’ passport copies
Initial approval certificate

Conclusion

Opening a company in Abu Dhabi involves several steps, but with the right guidance and preparation, you can navigate the process smoothly. By understanding the legal requirements, choosing the appropriate business structure, and complying with regulatory procedures, you can establish a successful business in this thriving emirate. Embrace the opportunities that Abu Dhabi offers and embark on your entrepreneurial journey with confidence.

Frequently Asked Questions (FAQs)

Q: How long does it take to open a company in Abu Dhabi? A: The process typically takes a few weeks, depending on the business activity and legal structure.

Q: Can a foreigner own 100% of a business in Abu Dhabi? A: In certain free zones, foreigners can own 100% of the business, but for mainland companies, a local sponsor is usually required.

Q: What are the costs involved in setting up a business in Abu Dhabi? A: Costs vary based on the business activity, legal structure, and required licenses. It includes trade name registration, initial approval, licensing fees, and office lease.

For further assistance, contact the Department of Economic Development (DED) or consult with a business setup consultant to ensure a smooth and compliant business establishment process.

How to Open a Company in Abu Dhabi: A Step-by-Step Guide

Starting Business in Abu Dhabi in 10 Steps