If you are worried about how to start a business in Abu Dhabi, then this article has all your answers. Abu Dhabi is one of the fastest-growing markets in the world with one of the largest oil production, real estate, industrial development, and tourism. Besides, the city also offers a speedy setup process for all kinds of businesses. Moreover, the business-friendly policies and different tax incentives provide maximum benefits to the applicants going for company registration in Abu Dhabi. On the whole, it is paving the way to commercial success in the country. These factors together are enough to get anyone interested in starting a business in the emirate.
Pros of registering a business in Abu Dhabi
- Varied business structures
Abu Dhabi provides different forms of business structures for varied requirements of the company registration process. Thus, investors have different options to choose from.
- Free trade zones
Similarly, investors have different options of free zones to choose from as there are more than 8 free zones in Abu Dhabi for conducting business.
- Integrated legal system
With the intervention of the consecutive government, the legal system has apparently changed in Abu Dhabi. In addition, the rise of UK and American Law firms in Abu Dhabi has impacted the development of its legal system and positively compelled the government to make the laws unified.
- Developed tourism sector
Apart from Dubai, Abu Dhabi also has one of the largest revenues from the tourism sector in the United Arab Emirates. It not only serves as a global hub for tourists but also as an international financial center for various businesses to operate. This, thus, calls for more investments in the market and diversification of the Emirates.
- Tax benefits
Except for the oil and gas sectors, companies that want to reduce their worldwide taxation, Abu Dhabi is an excellent location for them. Since the country itself does not impose any form of tax, they are exempted from worldwide tax, personal tax, withholding tax, corporate tax as well as any form of VAT. Moreover, they also get avail variety of double taxation agreements with other nations.
Locations to start a business in Abu Dhabi
Abu Dhabi Mainland
Abu Dhabi Mainland is a popular business-friendly spot to initiate commercial and industry start-ups. Besides, there are several reasons to choose the mainland for business formation. For instance, business owners can opt for multiple visa applications, and they are also exempted from personal and corporate taxes. In addition, Abu Dhabi Mainland provides affordable and flexible office spaces to carry out business operations. However, the only major shortcoming of mainland company formation is the requirement of a local sponsor who will own 51 % of the total company shares.
Abu Dhabi Free Zone
Compared to Abu Dhabi Mainland, Free zone company formation is relatively easier as it involves minimum paperwork. Moreover, there is a total of eight free zones in Abu Dhabi offering a favorable environment to start a business. Free Zones allow 100% ownership of the company to the owners and also liberate them from all kinds of taxes. Furthermore, it provides a well-advanced pre-built infrastructure and a quick immigration process. Although business setup in Abu Dhabi Free Zones is not that hectic, it requires comprehensive business planning and decision-making to make sure all the necessary formalities are taken care of very well.
Corporate structures to start a business in Abu Dhabi
- General Partnership
- Limited partnership
- Limited liability company (LLC)
- Public joint-stock company (PJSC)
- Private joint-stock company (PrJSC)
- Civil company
- Local company branch
- GCC company branch
- Foreign company branch
- Free zone company branch
- Sole Establishment
- Holding companies
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How to start a business in Abu Dhabi - Eligibility requirements
Any entrepreneur who is planning to start a business in Abu Dhabi has to fulfill certain conditions.
- Minimum capital - While registering a business in Abu Dhabi, the applicant has to fulfill the minimum capital requirement, which varies from case to case.
- Beneficial ownership – When a foreign company or investor establishes a business in Abu Dhabi, they have to meet the requirement for beneficial ownership. In other words, they have to enter into a shareholders’ agreement that would describe the requirements of the beneficial ownership.
- Right agency – In order to carry out the formalities of company formation in Abu Dhabi, one can find a suitable agency to make the process quick and straightforward.
How to start a business in Abu Dhabi – The basic procedure
The company formation in Abu Dhabi involves six simple steps –
- Determine the economic activities
Decide the activities your company intends to carry out. This is indeed a vital step as the further requirements and fee structure will depend on the type of business activity you pick.
- Decide the legal structure of the business
Abu Dhabi offers various legal forms and structures for your business. Each structure has its own set of rules and regulations that companies have to comply with. Therefore, it is important to study each structure before making a decision.
- Reserve a suitable trade name
Finding an appropriate unique trade name is very crucial as it distinguishes your business from others.
- Get the preliminary approvals
Before applying for a business license, you need to get preliminary approvals from the competent authorities to legally proceed with the setup process. This approval is basically legal consent to carry out the desired business activity in the registered business name.
- Obtain any external approvals, if required
In certain cases, for certain activities, you might require to seek additional approvals from external authorities as well, such as ministries or government agencies.
- Get the license for the business
Lastly, for the license, submit a request to the DED. Present all the required documents and wait till verification. Post review, the DED will approve the application and issue the license accordingly.
How to start a business in Abu Dhabi - Documentation requirements
Submit the following documents to start a business in Abu Dhabi –
- Memorandum of Association(MOA)
- Articles of Association (AOA)
- Shareholders Agreement
- Certificate of Appointment of Manager
- Board Resolution to open a branch office or representative office (applicable to foreign companies)
- Validated Documents
- Certificate of Paid-up Share Capital
- Deposit Slip of the amount deposited in the Abu Dhabi Bank Account
- Trade Name Approval Certificate
- Lease Agreement of the Office Premises
Compliances required to start a business in Abu Dhabi
- Businesses registered in Abu Dhabi do not have to pay any corporate tax, except the oil and gas sector and foreign banks which are subject to 55% and 20% corporate tax respectively.
- Non-GCC countries have to pay 5% of customs duties.
- As per the local labor law, employers and employees have to contribute 12% and 5% respectively as Social Security Contributions.
- Companies operating in Abu Dhabi are required to submit annual financial statements to the Abu Dhabi Ministry of Economy and monthly statements to the Department of Economic Development.
- As per the requirements of the Commercial Companies Federal Law No (8) of 1984, the business owners must have minimum share capital for establishing the company in Abu Dhabi.
- The newly established company must appoint a manager to manage the affairs of the company.
- The company must regularly report the annual returns to the DED.
Start a business in Abu Dhabi hassle-free and easily with Shuraa!
Although the company set up in Abu Dhabi is an effortless process, the dedicated team of Shuraa Business Setup can make it more manageable for you. From government approvals to licensing, they will take care of everything.
Need more information on how to start a business in Abu Dhabi? Write to Shuraa at [email protected] or simply give a call at +971 44081900.
