Company Formation in Abu Dhabi

Abu Dhabi, the capital city of the United Arab Emirates, is experiencing an economic boom like never before. The Emirate has experienced a dynamic economic surge. With a whopping 9.3% GDP growth rate in 2022 and a 35% increase in its private sector over the past eight years.

With a strategic location, a growing population, and a stable political environment, Abu Dhabi offers a wealth of opportunities for entrepreneurs and investors alike. One of the key benefits of company formation in Abu Dhabi is the attractive business environment.

The city offers a range of incentives for businesses, including tax breaks, easy company setup procedures, and access to a skilled workforce. Additionally, Abu Dhabi’s strong infrastructure, state-of-the-art facilities, and excellent connectivity make it an ideal location for companies looking to establish a presence in the Middle East.

If you’re too considering business setup in Abu Dhabi, understanding of benefits, company setup process, license required, and costs is essential. Therefore, here we will explain everything you need to know before you establish your successful business in this dynamic city.

Why Form a Company in Abu Dhabi? 

Abu Dhabi’s economic boom isn’t just a catchy headline, it’s a golden opportunity for aspiring entrepreneurs around the world. Here are some of the compelling reasons why you should consider forming your company in Abu Dhabi:

1. Favorable Tax Regime

Abu Dhabi has a tax-friendly environment with limited to no corporate tax and no personal income tax for most businesses. This can significantly lower the tax burden on businesses operating in the region.

2. Strategic Location

Abu Dhabi serves as a gateway to the Middle East, Africa, and Asia which makes it an ideal location for businesses looking to tap into these markets.

3. A World-Class Infrastructure

Abu Dhabi is known for its state-of-the-art infrastructure, including advanced transportation networks, reliable utilities, and high-tech communication systems.

4. 100% Foreign Ownership

Foreign investors can own 100% of their mainland companies in Abu Dhabi. This eliminates the need for a local partner, offering greater control and flexibility.

5. Business-Friendly Environment

The Abu Dhabi government actively promoted a welcoming atmosphere for businesses. This includes simplified regulations, readily available resources, and streamlined processes for company formation.

6. Skilled and Diverse Workforce

Abu Dhabi is home to a talented and cosmopolitan workforce. You’ll have access to a pool of skilled professionals from across the globe.

Types of Business Entities in Abu Dhabi

Abu Dhabi offers a variety of business entity structures, catering to different needs and ownership preferences. 

1. Abu Dhabi Mainland Companies

Limited Liability Company (LLC) is the most popular choice for foreign investors. It offers a good balance between ease of setup, limited owner liability, and flexibility. LLCs offer limited liability protection and allow for 100% foreign ownership.

There can be other options including Sole Proprietorship or Branch of a Foreign Company.

2. Abu Dhabi Free Zones

Free zones offer unique advantages like full foreign ownership, zero corporate tax, and simplified customs procedures. These zones cater to specific industries and often come with additional benefits like pre-built office spaces and business support services. Popular free zones in Abu Dhabi include Abu Dhabi Global Market (ADGM), Khalifa Industrial Zone Abu Dhabi (KIZAD), etc.

Choosing the right business entity depends on your specific circumstances, such as ownership structure, business activity, and future growth plans. It’s advisable to consult with a business formation specialist in Abu Dhabi such as Shuraa Business Setup to ensure you select the most suitable option for your needs.

Type of Business License Available in Abu Dhabi

Abu Dhabi offers various types of business licenses depending on the nature of the business activity and the jurisdiction in which the company operates. Some common types of business licenses include:

1. Commercial License

This is the most common license, suitable for businesses involved in trading, import/export, distribution, retail, and general services.

2. Industrial License

This license is required for businesses engaged in manufacturing, production, or any activity that involves physical transformation of goods.

3. Professional License

This license is for individuals or firms providing professional services like consultancy, engineering, design, or legal services.

4. Freelance License

This is a specialized license for individuals who want to operate as freelancers or independent contractors to offer services directly to clients in Abu Dhabi. It provides a legal framework for freelancers and can be easier to obtain compared to some other licenses.

Besides these there are other ranges of specialized business licenses including tourism license, agricultural license, real estate license, media license, and healthcare license.

Discuss your business license needs with Abu Dhabi business setup expert at Shuraa. They’ll assist you in choosing the right license based on your business activity.

How to Start a Company in Abu Dhabi? Step-by-step Process

Starting a company in Abu Dhabi involves several steps, including planning, registration, and obtaining necessary licenses. Here’s a step-by-step process:

1. Identify your Business Activity

First, determine the nature of your business operations. Abu Dhabi offers a wide range of business licenses, so understanding your activities will help choose the right one.

2. Choose Your Business Structure

Decide on the legal structure that best suits your needs. Consider factors like ownership liability, number of shareholders, and future growth plans.

3. Register Your Trade Name

Reserve a unique and relevant trade name for your company through the Abu Dhabi Department of Economic Development (ADDED) or relevant Freezone authority. Submit a few potential names for approval.

4. Prepare Company Documents

Depending on your chosen structure, prepare essential documents like the 

  • Passport copies for all shareholders
  • Passport-size photographs
  • Application form
  • Memorandum of Association (MOA) and Articles of Association (AOA) (if applicable)

These documents outline the company’s purpose, governance structure, and share capital.

5. Obtain Necessary Licenses and Permits

Once you have all the necessary documents, approvals, and have paid the applicable fees, submit your application for a business license to ADDED or Abu Dhabi Freezone authority. After processing your application, ADDED will issue your official business license. This signifies your authorization to operate your company in Abu Dhabi.

Depending on your business activity you may require additional approvals such as from Abu Dhabi Municipality or other regulatory bodies.

6. Open a Corporate Bank Account

Choose a bank in Abu Dhabi and open a corporate bank account for your company. Provide the required documents, such as company registration certificates, passport copies of shareholders, and proof of address.

7. Secure Your Business Location

Find suitable office space or commercial premises for your business operations. This could be in a free zone or mainland area depending on your preferences and business requirements.

8. Obtain Visas and Work Permits

Apply for residency visas and work permits for yourself and any foreign employees or partners. Follow the procedures set by the General Directorate of Residency and Foreigners Affairs (GDRFA) and the Ministry of Human Resources and Emiratisation (MOHRE).

What is the Cost of Company Formation in Abu Dhabi?

The cost of obtaining an Abu Dhabi business license generally starts from AED 12,900*. However, the overall cost of business setup in Abu Dhabi can vary significantly depending on many factors, including:

  • Business structure (Mainland or Freezone)
  • Number of visas
  • Business Location
  • Office rent
  • Business activity
  • Complexity of business
  • Additional approvals and permits

Mainland and Free Zone setups have different fee structures. Mainland typically involves higher costs due to government approvals. 

Consult with a Business Formation Specialist at Shuraa: They can assess your specific needs and provide a more precise cost breakdown based on your chosen business structure, activity, and visa requirements.

Partner with Shuraa for a Smooth Company Formation

Abu Dhabi’s booming economy presents a golden opportunity for entrepreneurs and investors. Tax-friendly policies, streamlined regulations, and a supportive government create a fertile ground for businesses to flourish.

And with the assistance of Shuraa Business Setup, the process of company formation in Abu Dhabi can be streamlined and simplified. We offer comprehensive assistance, from initial consultations to company registration, licensing, and beyond. Our team of experts will handle the legalities, secure your visas, and even help you find the perfect office space.

So, what are you waiting for? Contact Shuraa Business Setup today and let us guide you through every step of the company formation process.