A Complete Guide to New Company Formation in Abu Dhabi
Abu Dhabi, being the capital of UAE and the largest emirate, has a huge potential to be an economic paradise where businesses can grow, making it the ideal location to setup a business. What makes Abu Dhabi so special is that it is continuously growing, has a huge market space since it holds the second largest population in UAE, is easy to access, and has low tax rates. All these factors combined make Abu Dhabi a fertile ground for business setup, and the business-friendly policies of UAE can further boost the growth of the business.
Other advantages of starting a business in Abu Dhabi are the option to completely own the business without the need of a local service agent, the top-end facilities provided, the attractive freezones and the fact that Abu Dhabi is connected with the other emirates. Let us take a more detailed look at the business setup in Abu Dhabi and what details to look out for.
l) Legal requirements to start business in Abu Dhabi
Abu Dhabi has different locations with different legal structures, meaning there can be different types of businesses to choose from and each of their legal requirements are different from each other. The different types are
1. LLC
This the main type of business setup in mainland and is relatively easier to setup offering accessing to various sector to setup company. The number of shareholders can range from2 to 50. It also offers the option for complete ownership for foreign individuals.
2. Offshore Company
Offshore companies are ideal for international businesses, and it has added benefits like no import or export tax, zero tax on the personal income and much more. The process is a bit more complicated, and it is wiser to ask for assistance from an expert.
3. Freezone Company
Freezones in Abu Dhabi are categorised according to different business groups and only that type of business that fits the criteria can setup business in that freezone. The issuing authority of business licence also varies according to the freezone.
4. Joint Ventures
These are companies where two or more companies or parties come together to form.
5. Shareholding Company
6. Branch of a foreign company
It is the branch or representative of a foreign company; it operates by representing the parent company.
7. Professional Firms
They are firms which provide service in the form of expertise and knowledge instead of products.
There are many legal procedures before you start a business in Abu Dhabi. Before you begin, you must determine the nature and legal form of the business. The process varies for each kind of business; the legal form refers to the ownership structure of the business. Passports, visas, CVs, memorandums of understanding, and bank referrals are among the documents required. More documents may be required according to the nature of the business.
II) Choosing the right location for your business in Abu Dhabi
For any business the right location is important and same goes for in Abu Dhabi. The options in Abu Dhabi are Offshore, Freezone and mainland. When choosing a location, the factors you must consider are
1. The accessibility- The location should be easy to access by road and other transport methods; it should be ideally close to airports and ports. If it’s a business that deals with export or import, then the closer to the port or airport it is, the better.
2. Facilities- The facilities in Abu Dhabi are the best that the world can offer. If you are looking for a certain facility for your business, then you must select the location in Abu Dhabi that provides it.
3. The benefits- You must be aware of the benefits that your business will receive if you set up shop at that location. Some businesses need access to local markets, while others need access to international trade, so decide what your business needs and then find the location.
These are some basic things to look out for when it comes to freezones. There are different types of freezones, and each has a specialized business group. Freezones are an attractive option for anyone who wants to start a business with their tax benefits, 100% ownership, and other top-notch facilities provided. Some of the major freezone in Abu Dhabi are
1. ADAFZ- Abu Dhabi Airport Freezone
2. Masdar City Free Zone
3. Twofour54 Abu Dhabi- Media freezone
4. KIZAD- Khalifa Industrial Zone Abu Dhabi
5. ICAD- Industrial City of Abu Dhabi
6. ADGM- Abu Dhabi Global Market
7. Higher Corporation for Specialized Economic Zones
The freezones have their own authorities to issue licences, and they oversee the issuing of the operating licences for businesses in the free zones. Free Zone Limited Liability Company (LLC), a branch company, or a freelancer business are the types of businesses that can start operating in the freezones.
IIl) Business licences and permits in Abu Dhabi
To start operating any kind of business in Abu Dhabi, you need a business licence. In Abu Dhabi, the cost of getting a business licence varies from 10,000 AED to 30,000 AED depending on the type of business and the location in which you want to setup your business. The different types of business licences that are available in Abu Dhabi are
Commercial license: one of the most common business licenses in Abu Dhabi, it allows a wide selection of commercial activities like general trading, healthcare, real estate, etc.
Professional license – License for people who provide services in crafts and services of artistic value, like carpentry or other professional craft services.
Occupational license – This is for people who are providing professional services like management, education, etc.
Tourism license – For tourism related businesses or related to the tourism industry.
Industrial license – This is for any business that plans to do manufacturing in Abu Dhabi.
Agricultural license – For businesses related to the agricultural industry like farming.
The process of getting business licence in Abu Dhabi is straightforward but depending on the location and type of business it may change. To start a business in the mainland or freezone Abu Dhabi these are the documents to be produced
an application form, along with your registration, from the Department of Economic Development or the free zone authority.
• A copy of your passport
• Your business plan’s copy
• Your business name’s approval certificate’s copy
• Your local sponsor’s passport copy (if required)
• an Emirates ID copy, if available
• Your memorandum of association
• Your tenancy contract for an office lease
Abu Dhabi being one of the highest generators of revenue in the UAE is a good space for businesses to grow and it is evident from the increase in number of business licences issued in the past year. Learn more on how to get business licence in Abu Dhabi here.
IV) Opening a corporate bank account in Abu Dhabi
A business requires a bank account to operate, and it should be a corporate bank account which can offer your business more advantages than a normal bank account. To start a corporate bank account in Abu Dhabi
1. Acquire the business licence- This is required for the bank to identify you as a business rather than a person.
2. Prepare and submit documents- Documents like IDs of the shareholders, business plan, CVs MoU etc.
3. Meet Visa requirements- Some may banks require one of the shareholders to have a proof of residence or residence visa.
4. Fix on the bank- Pick a bank that can better accommodate your business needs also based on your income and plans for international money exchange.
5. Final application process- Work with the bank officials, make sure everything is correct and your bank account will be ready as soon as the application process is done.
V) Benefits of starting business in Abu Dhabi
The highest earning emirates, 2nd largest population and access to a market with foreign clients, Abu Dhabi is a heaven for entrepreneurs. Some of the major advantages of starting business in Abu Dhabi are
1. Tax benefits- There is no tax on personal income
2. Repatriation of assets- Abu Dhabi offers 100% repatriation of capital and profit
3. No restriction of foreign currency
4. Easy to recruit staff and availability of skilled personnel
5. Competitive prices for services provided
6. Access to safe and reliable utilities like power, water etc.
7. Connected to other emirates and has airports and ports making it easy to access.
There are many more things to consider when beginning your business in Abu Dhabi, but with enough planning and help from an expert, it will be much easier and faster. Alchemist Corporate Services has years of experience setting up businesses in Abu Dhabi and a dedicated team that will take you from step one to the final step. Get your free consultation by reaching out to us at +971556205750.
