Abu Dhabi Free Zone Setup

Business Setup in Abu Dhabi

Abu Dhabi serves as a key destination for global entrepreneurs and investors looking to establish new businesses, with an impressive investment exceeding a trillion dollars in the city.

The UAE boasts a robust economy, ranking as the second-largest in the GCC nations. Abu Dhabi emerges as one of the optimal locations for business setup, offering seamless connections to markets in various countries and a rapidly expanding market.

The process of establishing a business in Abu Dhabi is relatively straightforward and efficient, typically requiring only a few days for completion. The timeframe depends on the type of business and its location. However, seeking the guidance of a business setup consultant during the initial stages of business inception might prove beneficial.

Authorities Involved in Business Incorporation in Abu Dhabi

Several authorities play a crucial role in the process of business setup in the Emirate.

Department of Economic Development (DED)

The Department of Economic Development (DED) offers a range of services to both existing businesses and new enterprises through its administrative office and the official online e-portal. These services encompass:

• Granting Trade License
• Reserving Trade Name
• Renewing Trade Name
• Renewing Trade License
• Granting Initial Approval
• Granting Branch Initial Approval
• Printing License
• Terms and Conditions for License Activities
• Managing License Contact
• Paying Inspection Fines
• Updating Mobile Number
• Granting Legal Contract for License
• Granting Legal Contract
• Approving Legal Contract
• Printing Legal Contract.

Commercial Registration Department

Applicants must initiate the application process for essential permits and trade licenses through the Department of Economic Development (DED). Furthermore, the Memorandum of Association (MoA) of the company needs to undergo notarization by the DED. Following this, all necessary documents must be submitted to the Company Registration Department.

Options for Business Formation in Abu Dhabi

You have the choice between establishing a Free Zone or a Mainland Business Setup in Abu Dhabi.

Free Zone Company Abu Dhabi

Abu Dhabi’s free zone offers a multitude of business prospects spanning various sectors. Establishing a company within the free zone involves a simplified administrative procedure, allowing for the submission of all necessary information to a single agency. Additionally, it affords expatriate businesspersons complete ownership of their company (100%).

The Abu Dhabi Free Zone Authority serves as an optimal platform for the efficient registration of companies in the Emirate. The free zones issue licenses for:

• Commercial Trading Business
• Consultancy Business
• Branch of a Foreign Company.

Abu Dhabi Mainland Company

A Mainland refers to a specific geographical area located outside of a Free Zone, falling under the jurisdiction of the UAE government. While these commercially developed areas have the flexibility to engage in trade within the mainland, they are restricted from conducting trade in the Free Zones.

With standardized policies and legal guidelines, the emirate has evolved into one of the most developed economies in the Emirates. Following an amendment in the Commercial Companies Law (CCL) effective from June 1, 2021, mainland companies in Abu Dhabi are now allowed to conduct business across the entire UAE with expatriates holding 100% ownership of the business. Previously, expatriates were limited to 49% ownership, with the remainder held by a local sponsor.

Below are the steps to be followed for setting up a company in Abu Dhabi:

1. Determine the Type of Economic Activities

Grasping the nature of the intended business activity is essential. This understanding assists in identifying the required legal and economic prerequisites that the company must meet. Furthermore, it aids in determining the licenses necessary for the smooth execution of the business activity.

2. Find a Local Sponsor

In line with UAE regulations, foreign companies aiming to establish a branch office in Abu Dhabi are required to involve a local sponsor, who can be a service agent or a company owned by UAE nationals. The local sponsor assists in obtaining the necessary licenses for the branch office without taking on any responsibility for capital contribution or losses. It’s important to note that recent amendments have limited the requirement for a local sponsor to specific sectors. For further information on the need for a Local Sponsor, you can consult with our business setup experts.

3. Determine the Legal Form of the Business

Various ownership types and business establishments are governed by different rules and regulations. Before commencing a business, the management must identify the most appropriate business structure.

Here are a Few Legal Entities:

• Limited Liability Company (LLC)
• Joint Liability Company
• Simple Commandite Company
• Private Joint Stock Company (PR JSC)
• Public Joint Stock Company (PJSC)

Other Types of Companies:

• Civil Company
• Sole Establishment
• GCC Company Branch
• Local Company Branch
• Foreign Company Branch
• Representative Offices of Foreign Companies
• Free Zone Company Branch

4. Register Your Trade Name

Ensuring the registration of a trading name is a vital process for a business, as it prohibits any other organization in the country from using the same trade name once it is registered. We aid our clients in the establishment of a business in Abu Dhabi and facilitate the registration of a trading name from the roster of registered trade names provided by the Department of Economic Development (DED).

5. Fulfil Licensing Requirements

Apart from licenses, various other permits and approvals are required, and obtaining them is crucial for the commencement of a business.

License Types

Various types of licenses include:

⮚ Tourism: Granted by the Abu Dhabi Tourism and Cultural Authority, this license is provided to companies offering tourism-related services such as hotels, travel agencies, boat rentals, and more.

⮚ Occupational: Applicable to businesses involving individuals utilizing their talents, mental and intellectual capabilities, and abilities to serve clients.

⮚ Commercial: Issued to companies engaged in various business activities like public trading, construction and real estate, hospitals and clinics, and business contractors.

⮚ Industrial: Businesses aiming to establish manufacturing operations in Abu Dhabi can secure an industrial license.

⮚ Professional: Professionals and artisans engaged in specific crafts, such as carpentry, steelwork, and smithery, can obtain a professional license.

6. Obtain the Initial Approval

Prior to commencing the business setup process, the foreign businessman must secure approval from the General Directorate of Residency and Foreigners Affairs – Abu Dhabi. We support our clients in acquiring all essential approvals from relevant authorities, including the DED, and facilitate the payment of the required legal fees for obtaining a business license.

Documents Required for Preliminary Approval

• Trade name approval
• For foreign investors: Approval from the Department of Naturalization and Residence, along with valid passport copies
• Copy of Emirates ID, if applicable
• No-objection certificate
• 7. Get Special Approvals

Several businesses may require specific approvals or permits, which can be obtained through communication with the relevant authorities. After submitting all necessary documents, the license can be collected from the respective authority. Apart from the DED, special approvals may be necessary from government bodies such as:

• Abu Dhabi Customs Duty
• Abu Dhabi Distribution Company
• Ministry of Civil Aviation
• Telecommunication Regulatory Authority
• Supreme Petroleum Council
• Abu Dhabi Education Council
• Medical Council
• Central Bank