When it comes to business, everyone seeks a strategic location, a favorable environment, various incentives, a thriving economy, and business-friendly government policies. Abu Dhabi offers all these advantages in one place, making it an ideal place for entrepreneurs and attracting business owners looking for success and growth.
Starting a business in the capital of the UAE is straightforward and offers multiple setup options, including mainland and free zone. If you want flexibility and access to the local market, a business setup in Abu Dhabi mainland is an ideal option.
You might be wondering how to start a business in Abu Dhabi and what costs are involved. No need to worry. This article will guide you through the essential steps for setting up a business.
How To Start a Business In Abu Dhabi?
Setting up a business in Abu Dhabi is a simple process. However, this process involves multiple steps that should not be missed if you want smooth processing.
Choose a Business Activity
Identifying business activity is a crucial step and must be done carefully. Ensure the activities you are interested in match the business categories listed in the UAE’s official classification of commercial activities.
This list helps you understand which activities are allowed under different types of licenses. It is important to choose activities that align with your license to get the right type of license.
Decide Legal Structure
Another factor that significantly contributes to business success is the company’s legal structure. In the world of business, there are four structures that can be selected to establish the business. Ensure that you choose a structure that provides more flexibility, protection, and benefits than other structures.
The most suitable legal structure for business setup in Abu Dhabi mainland is a Limited Liability Company, which combines the best parts of two other business structures: a corporation and a partnership.
Choose a Trade Name
The next step is registering your trading name with the Abu Dhabi Department of Economic Development. It is recommended that you choose a simple, unique, appropriate name that best describes your business nature and activities.
You are allowed to suggest more than one name to DED. The authority will compare it with the provided criteria, and then you can choose your favorite one from the approved ones. You are not allowed to choose a name that is already in use and contains words like universal and international.
Find a Local Partner
Local partners are a fundamental requirement and are important in maximizing Business Opportunities. Choosing LSA is a big decision as they perform most business tasks. Having said that, it is noteworthy that an unprofessional and inexperienced agent can do more harm than good. So, make sure you choose the right person for this job.
Local Service Agents in Abu Dhabi do not own anything regarding investments but organize meetings, dealings, and present companies. LSA charges a small annual fee and lets you perform everything your way, just as sleeping partners do.
Sign a MOA
The most important documents for business setup in Abu Dhabi are the Memorandum of Association (MOA) and Articles of Association (AOA). These documents reflect rules, a road map, and other business strategies. Approval from the Department of Economic Development (DED) for these two documents is mandatory to operate legally. DED ensures the company is real and rules are accurate.
Application for Initial Approval
The next step is initial approval from the Department of Economic Development in Abu Dhabi and other authorities. It also includes submitting documents such as your identity card and passport and information related to your business, such as what you are going to offer and what location you selected.
Apply For Business License
After registration and initial approval from DED, you can apply for a license. This can be done through DED’s online site or service center. Depending on the nature of your business activities, you might need to get special approvals from several authorities.
Requirements For Business Setup in Abu Dhabi Mainland
Requirements for mainland include the following documents that must be submitted to the Abu Dhabi Department of Economic Development.
- Any two documents that support your home address in Abu Dhabi. It can be your utility bill and driver’s license.
- Three trading names for your business according to the naming convention of UAE.
- Passport copy of shareholders (If any)
- Business Plan Application form for registration
- Curriculum Vitae of Employees
- Passport sized photographs
- Copy of visa and Emirate ID
Cost Of a Business Setup In Abu Dhabi
The cost of a business setup in Abu Dhabi mainland has been reduced significantly (approximately 90%). This step was taken by the mutual decision of ADDED, the Abu Dhabi Chamber of Commerce, and other government authorities. Now, the cost is Dh 1000 only, as other business fees for different departments and authorities no longer need to be paid.
This lower amount will cover up to six activities, including;
- The Abu Dhabi Department of Economic Development
- Department of Municipality and Transport
- Abu Dhabi Chamber membership fee
- Issuance fee for Certificate of Conformity
- Fee for regular authorities of Abu Dhabi (depends on the type of business and selected entities)
Advantages Of Starting a Business In Abu Dhabi
Setting up business in Abu Dhabi has several advantages, as it is the capital of UAE and connects East and West.
Strategic Location
Abu Dhabi’s strategic location contributes to business growth, as many countries have access to it. Moreover, businesses set up in good locations reduce shipping charges, attract customers, and enhance the efficiency of supply chains by shortening the delivery time.
Diversity
People of different cultures and nationalities live in Abu Dhabi and have different preferences, tastes, and needs. This diversity creates more opportunities for business.
The diversity of the population and their spending ways help in smooth growth instead of catering to a population that has the same demands and opportunities.
Low Company Setup Cost
In Abu Dhabi, you can easily set up your business because of the low company setup cost. This makes it a hub of business and attracts entrepreneurs from worldwide. The UAE government has reduced the License Fee, which directly contributes to business success.
Long-term License Validity
Usually, in other places, the validity of a commercial license for a business setup is one year. However, Abu Dhabi offers a longer-term license validity of 2 years. This benefit helps in saving time and money because it eliminates the need for renewal processes and fees.
Affordable Office Space
Abu Dhabi is ideal for setting up any business not just because of its strategic location and low startup cost but also because of its affordable office space. In business, every penny counts, and flexible leasing options make it easier and safer to start and expand a business in the capital of the UAE.
Investors are allowed to choose between shared office space and coworking environments. The former are less expensive and provide networking opportunities.
Access to Government Projects
If your company is located on the mainland of Abu Dhabi, you can easily access government projects. These well-funded projects can help build your company’s reputation and provide stable income. This stability and reputation can attract more customers and clients in the future, ultimately helping your business grow.
Popular Tourist Destination
Abu Dhabi is a popular tourist destination for several reasons, including its rich culture, Sheikh Zayed Grand Mosque, stunning beaches, entertainment options, and luxury shopping malls. These factors attract tourists, creating a demand for a number of services, leading to more opportunities and growth.
Conclusion
At the end of this article, we hope you understand everything about business set up in Abu Dhabi mainland. Starting a business with a strategic approach on the mainland can be more promising for an entrepreneur than in other jurisdictions. Although setting up a business in Abu Dhabi can be challenging and requires planning, the benefits are worth it. Don’t let your fears hold you back; stay focused and achieve success in the Abu Dhabi business market.
Setting up a business in Abu Dhabi without proper information and knowledge of legal structure can be risky. Contact Al Riyady to ensure a smoother and more successful business setup.
