Is Abu Dhabi a good place to set up a business? Undoubtedly, Abu Dhabi is a good place to set up a business or company. Innovative and fast-growing sectors make Abu Dhabi a great place globally for business.
It is easy to conduct transactions easily in Abu Dhabi due to the government’s close collaboration in the business sector, including UAE-based and overseas investors.
It is well-known for its steadfastness towards foreign investors and its open policy for conducting business globally. As a global economic hub, Abu Dhabi draws the attention of many business people.
The range of options available to open and promote a business in Abu Dhabi. It lets you choose the most appropriate option for your particular circumstance.
It’s hugely profitable for entrepreneurs to start their businesses within Abu Dhabi. However, it is possible that someone who is investing at first-time in Abu Dhabi may not know the best place to invest or gain profits. Being aware of the current market circumstances within Abu Dhabi is very important to starting an enterprise.
To sum up, As an entrepreneur, you can select Abu Dhabi to set up a business.
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Is Abu Dhabi a good place to set up a business?
Of course, foreigners are allowed to start a business in Abu Dhabi. There are many benefits to setting up a business there. You will get the details advantage below.
The Abu Dhabi Department of Economic Development is the first to issue a professional license. It allows foreigners to own 100% of companies involved in 604 industries to lure more investors into improving its economy.
Foreigners can get various business facilities, and it is really easy to set up. Abu Dhabi also has open economy diversity. Starting a business in Abu Dhabi will bring long-term savings in cost in the long run by preventing disruptions to business.
At last, I want to say “yes.” As a foreigner, you are allowed to start your own company in Abu Dhabi.
Types of business formation in Abu Dhabi
A sole proprietorship is controlled by a single person who controls all its activities and owns all the shares in any earnings. It is the simple kind of corporate structure found in Abu Dhabi. It does not have any specific requirements, apart from having a residence permit if the applicant is a foreign national.
Characteristics of a Sole Proprietorship in Abu Dhabi:
- If the founder is not a UAE national, an LSA (Local Service Agent) is recruited to assist with the company’s start-up.
- Only the UAE and GCC citizens can have sole proprietorships that are industrial or commercial that must be 100% owned by the company.
- Anyone of any nationality may own sole proprietorships that are professional.
- A sole proprietorship does not have any minimum requirements for business capital.
- The firm’s name must be connected with the nature of business activities.
- A sole proprietorship may only have one manager.
Professionals with recognized qualifications such as engineers, accountants, doctors, and lawyers can establish a civil company inside Abu Dhabi. The company may have partnered with 100% shares—the activities permitted by the civil company.
Particularly, these actions are classified as intellectual or physical, performed by at least one natural person who has a specific capital.
Characteristics of a Civil Company in Abu Dhabi:
- The firm is involved with engineering. The partner must be a UAE citizen who owns not less than 51% of the company.
- If the business is engaged in consultancy, the company must be controlled by professionals engaged in similar activities, with 100% ownership.
- Anyone from any country can start this business.
- LSA (Local Service Agent) is required for the company incorporation if the company’s owner is a national of another country.
- If a foreign corporation is a shareholder within the civil sector, that is the same business.
In this business, ownership is divided among several partners, who share the profits and losses by the set ratio. There are two primary kinds of Partnerships. They are,
- General Partnership- all partners must be UAE nationals and are accountable for the partnership’s debts.
- Limited Partnership- Partners are only liable for the partnership’s obligations up to the level of their capital contribution.
Characteristics of a Partnership Company in Abu Dhabi:
- Limited partners shouldn’t be involved in administrative or management issues for general partners. If they do, they risk being held liable for the whole sum of their business debts.
- Limited and general partners can possess as many shares as they choose.
- UAE nationals are the general partner in a basic limited partnership. All other partners have to be restricted partners.
Private Shareholding Company
This type of company is often referred to as the Private Joint Shareholding Company (PJSC) in Abu Dhabi. It is formed by an initial partnership of AED 5,000,000 with at least three investors. These companies are compatible with industrial and commercial activities and professional businesses.
Characteristics of a Private Shareholding Company in Abu Dhabi:
- The business may operate multiple branches. Each can perform any or more of the activities that are covered by the primary business license.
- The company has to appoint one manager.
- The minimum capital needed is AED 5,000,000.
- A permit from the Ministry of Economy must be obtained to create a private shareholding corporation.
- A minimum of 51% of the shares have to be owned by a UAE citizen of the country.
- A GCC citizen can own up to 100% of the shares.
Can you have 100% ownership of a company in Abu Dhabi?
In Abu Dhabi, you can own 100% of a business. According to FDI, foreign ownership of the company is 100%. There’s no need to pay additional charges.
The Ministry of Economy has announced that foreign-owned ownership of 100% within Abu Dhabi will be in the country from June 1st, 2021.
If you’ve thought of setting up your own company, but were unable to get it off the ground due to having a local sponsor and then losing 51% of the ownership of your business to them, now is a perfect time. You can set up a company on the mainland that has your name over it and not have to look for partners in the national market while enjoying full ownership.
The significant modifications to the 100% UAE law on foreign ownership will allow the country to attract foreign entrepreneurs and investors and enhance the ease of doing business there.
In opening the economy to entrepreneurs and investors with 100% foreign ownership in Abu Dhabi, there is the possibility of a growing demand for property as more people seek to move there as their homes.
Why set up a new business in Abu Dhabi?
Abu Dhabi is now economically efficient, and it is possible to consider starting a company there. Let’s examine some of the major reasons for setting up a business in Abu Dhabi.
No personal or corporate tax
Abu Dhabi is a tax-free city where many multinational corporations create branches or new entities. There is also no corporate income tax assessed either at the federal or the emirate levels. But there are some exceptions of international bank branches and courier businesses.
The Emirates provides a variety of business ownership structures and tax classifications. One of the most notable is the free zones that come with the option of 100% tax exemption. You can keep all of your business proceeds and avoid paying any income taxes to the government.
Geographically, Abu Dhabi is a trade hub for goods shipped from the East into the West. The central location of the country and its connectivity to the Arabian Gulf make it an ideal hub for trade. Abu Dhabi is strategically situated between three continents: Europe, Asia, and Africa. It also has easy access to Middle East Markets.
So, Abu Dhabi is ideal for those who want to begin an export and import trade business. On the other hand, Abu Dhabi is a member of the European Union, a significant trading partner.
Investments are minimal
In theory, if you want to establish a business with a location in Abu Dhabi using 100,000 AED, you should suppose that you’ll invest around 60,000 AED. So you should look for ventures that you can operate with an operating cost of just 40,000 AED or lower.
It is recommended that you speak with a business expert. Business consultants can assist in making an informed decision and give you options to make the most of your money. They may give you ideas and investment opportunities or assist in creating your business plan based on your ideas and the budget you have to work with.
Increasing business activities
When you decide to establish a business in Abu Dhabi, one of the main advantages is that the city provides an ideal climate for specific industries, including :
- Equipment for the gas and oil industry is produced at these places: For instance, valves, pumps, tankers, fittings, turbines, compressors, and turbines are produced at this location.
- Distribution and supply of natural gas and oil companies that participate in the buying and selling of natural resources.
- Sea Business activities that produce products used in the maritime industry will appreciate the Abu Dhabi ports as the ideal place to be.
Companies from mainland countries can conduct business with mainland companies within Dubai and UAE. They can operate their business from any area in the UAE. This distinction sets them apart from companies operating in free zones because they are only permitted to conduct their business within their specific free zone.
Businesses from the mainland are permitted to accept government contracts and are not restricted by free zone companies that are not allowed to sign government contracts. They are allowed to conduct private commercial activities.
Ownership of the entire business
Foreigners who operate in Abu Dhabi can only have up to 49% of the company, as per the UAE’s laws on FDI. In addition, 51% of the stake must be owned by the local partner. Don’t let this deter you because businesses can register as LLCs, can be flexible, and different profit-sharing arrangements are also feasible.
With 100% ownership, your business can enjoy benefits like zero personal and establishment tax and 100% tax return on income and capital. Companies operating in these zones benefit from various advantages based on the Free Zone and business sector.
How to start a business in Abu Dhabi?
Investors seeking to establish a business within the Abu Dhabi capital must complete two requirements before being acknowledged as legitimate businesses: obtaining a trade license and incorporation. This requires successfully submitting a range of applications that allow companies to operate to conduct business in Abu Dhabi.
The steps for forming a business in Abu Dhabi are outlined below:
Determine the company’s activities
The first step in starting a business in Abu Dhabi is to figure out what you want to do with it. There are many possibilities to select from, and it’s crucial to specify the activities you plan to undertake in your application for a license.
It is essential to know what type of business activities need to be conducted by the company. This will aid in understanding the various obligations to be met by the business legally and economically. It can also assist in understanding what licenses are needed to conduct business without any hiccup.
If you don’t specify each of your planned activities may result in problems further down the road. Thus, it is recommended to seek advice from an expert on business formation before making this choice. They will recommend business activities most compatible with your company’s goals.
Pick a name for the company
After you have your business’s activities laid out and outlined, you can now choose your company’s name. There are a few important things to consider when naming a business with its headquarters inside Abu Dhabi. In this situation, you must adhere to stringent guidelines. Again, a business setup expert can assist you in this process.
Briefly, you should stay clear of offensive or offensive language. Avoid the names of well-known organizations and avoid abbreviations when you name your business in honor of yourself. Also, make sure that the name you’ve chosen is available for registration.
Identify the business’s legal form
The rules and regulations differ for different ownership types as well as businesses. Before starting a business, the company’s management must determine the best business form to be most appropriate for the company.
A company’s legal form is essential when setting up the company within Abu Dhabi. There are many options available. You must be careful in deciding on a form since various rules and regulations exist.
Contact a Local Sponsor
According to Abu Dhabi regulations, foreign firms require a local partner to establish branches located in Abu Dhabi. Local sponsors will help obtain the required licenses for the branch office without paying any capital contributions or losses.
In the last modification, the requirement for a local sponsor was restricted to specific industries. Consult an expert on business setup to learn more about a local sponsor’s need.
Make a Trade Name Registration
Registration of a trading name is vital for any business. Once it is registered, another company cannot use the trade name within the country. The cost will vary based on the type of business, and the payment must be received in the next 30 days. The DED (Department of Economic Development) will only be able to register trade names. The official body for trademark registration is the Ministry of Economics to register trademarks in Abu Dhabi.
Obtaining a business license
One of the primary needs for starting any small-scale business is a business license.
Obtaining a license for an individual business is easy for free zone and mainland businesses. The prerequisites to begin a business in mainland areas are as follows: Apply for your license through the Department of Economic Development or the Municipality within the Emirate where you’re starting your business. Most mainland license applications can take up to three weeks.
Getting the first approval
When a company has obtained a trademark certificate, initial approval is needed to establish the business with a location in Abu Dhabi. The initial approval permits investors to request a company license.
The authority responsible for approvals depends on the kind of business. Foreign investors are also required to obtain approval from the General Directorate of Residency and Foreigners Affairs (GDRFA).
Abu Dhabi Chamber of Commerce and Industry membership
By Law 7 of 1988, every person, regardless of citizens or foreigners, who engages in any commercial, industrial or professional activity within Abu Dhabi must obtain membership of the Abu Dhabi Chamber of Commerce and Industry. This applies to sole owners and representatives of branches and corporations.
Obtain Special Permits
Many businesses require permits or approvals obtained through contact with the appropriate authorities.
Best Business setup services in Abu Dhabi
Here’s top 5 famous setup services in Abu Dhabi:
Branch of a Foreign Company In Abu Dhabi
In Article (313), Companies Law permits foreign companies to carry out their primary business in Abu Dhabi by opening branches or a representative office.
A foreign business that opens a branch in Abu Dhabi can freely engage in the business. It has been granted a license, and representatives’ offices can conduct solely promotional activities for the services and products offered by the parent company.
The primary requirement to open an official representative or office of a foreign business located in Abu Dhabi is the appointment of an agent for Service who must be a UAE citizen.
Professional Firm Setup In Abu Dhabi
Professional firms carry out only professionals in addition to commercial operations. They are allowed to be entirely owned by non-UAE citizens. Professional firms can be sole proprietorships or civil corporations. These companies can engage in artisan or professional activities.
Some benefits of a Professional firm set up in Abu Dhabi
- There is no personal income or capital taxes.
- No corporate taxation
- 100 % repatriation of capital as well as profits
- No limitations on currency
Establishments in Abu Dhabi
The members of the Gulf Cooperation Council (the UAE, Saudi Arabia, Sultanate of Oman, Qatar, Kuwait, and Bahrain) signed the United Economic Agreement in Riyadh on the 7th of June, 1981, to unify and harmonize the economy’s financial, commercial and industrial laws.
The UAE signed the accord in 1982. It’s a conditional agreement by the Federal Law No. 2 of 1989, which permits individuals with GCC citizens to establish business within Abu Dhabi. The investor must reside within the UAE and perform the business on their own, and have a valid license to conduct the work in the country.
Khalifa Industrial Zone Abu Dhabi
KIZAD can be used due to the low cost of setup, quick approvals for company formation or licenses, and the possibility of Flexi-Desk. This means that you do not need an office but instead utilize a shared workspace at any time you need.
KIZAD is a keystone of the Abu Dhabi Economic Vision 2030. It’s the way to ensure that various ambitious, long-term objectives will be achieved. It’s an important step towards increasing the base of economic activity to ensure sustainable growth that isn’t dependent on the gas and oil industry.
KIZAD aims to increase the number of opportunities required to attract, keep and build expatriate talent. They create a sustainable knowledge economy while also reducing dependence on low-skilled workers.
Kizad will set new standards for industrial zones, enhancing Abu Dhabi’s global competitive edge.
Business Setup in Abu Dhabi Global Market
ADGM is the central point of Abu Dhabi’s capital city. It is an important financial hub for regional, local, and international organizations. Establishing a business in the Abu Dhabi Global Market has many advantages and is the ideal location to grow your business.
Its Financial Services Regulator, the Registration Bureau, and the Courts are the three self-regulating entities within the ADGM. They assist in the smooth establishment and running of companies. ADGM is a trusted dispute resolution and a judicial and regulatory system.
Can setting up a business in Abu Dhabi be beneficial for a freelancer?
Of course, setting up a business in Abu Dhabi can be beneficial for a freelancer. Many reasons prove that setting up a company in Abu Dhabi is useful for a freelancer.
Abu Dhabi has a business-friendly atmosphere and a tax-free economy. They offer lots of options for both working people and business leaders. Recently Abu Dhabi capital has provided freelancers and self-employed people a reason to be happy because they allow freelancers to work for freelancers in Abu Dhabi.
The permit for freelancers is a program by the Abu Dhabi Department of Economic Development (ADDED). It covers 48 different types of business operations and permits holders to participate in corporate events from a regulated area.
The license for freelancers issued by the government of Abu Dhabi makes it easier for professionals to apply for a work permit without the help of a business. The UAE government provides enough space and room for each business within Abu Dhabi.
Specific rules and regulations govern freelance work working in the UAE. Because the UAE is an international hub for investors, ex-pats, capitalists, and entrepreneurs worldwide. A wide range of start-ups and freelance work options is available to investors abroad.
FAQ on Setting up Business in Abu Dhabi
How much does it cost to start a business in Abu Dhabi?
The total startup cost to set up a business in Abu Dhabi can range between AED 24000-AED 29000 over two years. It will depend on the package that is selected by the client and depends on the location, and the kind of business that the investor plans to pursue.
Investors must consider the advantages and disadvantages regarding the legal requirements associated with setting the business with the city of Abu Dhabi.
How long does it take to set up a company in Dubai?
Setting up a company can take anywhere from 4 to 5 working days. It is based on the various factors and certifications needed for the company’s creation.
How many types of business licenses are in Abu Dhabi?
There are six types of business licenses in Abu Dhabi.
1. Commercial License
2. Agricultural License
3. Craft License
4. Industrial License
5. Professional License
6. Tourism License
Is there a free zone in Abu Dhabi?
Yes, there are 5 free zones in Abu Dhabi.
The free zones are:
1. Abu Dhabi Airport Free Zone (‘ADAFZ’)
2. Abu Dhabi Global Market (‘ADGM’)
3. Masdar City Free Zone (‘Masdar City’)
4. Khalifa Industrial Zone – Abu Dhabi (‘KIZAD’)
5. Twofour54 Media & Entertainment Hub (‘twofour54’)
So, what do you think? Is Abu Dhabi a Good Place to Set Up a Business?