Although the United Arab Emirates is well-known for its distinct and diversified tourist attractions, it has much more to offer the global business world. The country is a hub for direct foreign investments due to its open and dynamic economy, low tax rates, low import tariffs, and strategic position. The administration has worked tirelessly to make doing business in the UAE as simple as possible. The capital has received special attention. So, if you want to establish your own firm or work on an expansion project for a large corporation, here’s how to do it in Abu Dhabi.
HOW TO START A BUSINESS IN UAE, STEP BY STEP
The capital, as the largest emirate in terms of size and home to the UAE’s second-largest population, provides several advantages to international enterprises. It also gives SMEs and startups fantastic chances to achieve exponential development. Furthermore, the UAE’s recent legislation enabling 100 percent foreign ownership has opened up a world of possibilities. As a result, numerous local and international businesses are considering setting up shop in Abu Dhabi.
The UAE’s policies are business-friendly. Local and international investors are invited to invest in the country. In Abu Dhabi, starting a business is very simple and, luckily, free of excessive red tape.
To start a business in Abu Dhabi, investors need follow the processes listed below.
ACTIVITY IN THE WORKPLACE
The identification of the business/commercial activity is the first stage. Depending on the type of your business, regulatory requirements and licencing fees may differ. In the United Arab Emirates, there are six different categories of business licences: industrial, tourism, professional, commercial, agricultural, and occupational.
A company might have many streams of activity running at the same time. When it comes to starting a business in the UAE, there are over 2000 subcategories to select from.
LEGAL FORM OF BUSINESS
Choosing the ownership structure of the business is imperative when you decide to set up a business in Abu Dhabi. There are different options to choose from. Due diligence is required when choosing a structure as different rules and regulations apply for each legal form. The options include:
- 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
TRADE NAME REGISTRATION
One of the critical steps when considering opening a business in Abu Dhabi is selecting your trade name. Once you have chosen a name, it has to be registered at the emirate’s Department of Economic Development (DED). However, a business name may be rejected if it doesn’t meet the following criteria:
- The proposed name cannot violate public order or public morals.
- The name cannot contain any governing authority names, religion or external body names or logos.
- Any unique name has to be followed by the acronym (legal form of the company) i.e. EST, PrJSC etc.
- The name must be compatible with the proposed business activity.
- The name must be unique and should not be registered in the past with another business.
A payment voucher (or transaction number) will be issued throughout the registration procedure. The cost varies based on the type of business, and payment must be made within 30 days. Only trade names are registered with the DED. The Ministry of Economy is the legal entity in charge of trademark registration in the UAE.
GETTING THE FIRST APPROVAL
The DED grants first authorisation to start a business in Abu Dhabi after acquiring a trade name certificate. An investor can apply for a business licence after receiving this initial clearance.
Depending on the nature of business, several authorities are responsible for approvals. The General Directorate of Residency and Foreigners Affairs must also approve foreign investors (GDRFA).
GETTING APPROVAL FROM THE APPROPRIATE ENTITIES
Following the first approval, the following step is to meet all criteria and acquire permissions from the appropriate government agencies. Some companies simply require Department of Economic Development clearance.
In collaboration with the Department of Economic Development (DED), some state organs issue approvals online. The list includes:
- Waste Management Center
- Supreme Petroleum Council
- Ministry of Foreign Affairs
- General Directorate of Civil Defense
- General Authority of Youth & Sports Welfare
- Department of Transport
- Abu Dhabi Sewerage Service Company
- Public Health Division (Western Region, Al Ain and Abu Dhabi)
- Environment Health and Safety Center
- Abu Dhabi Chamber of Commerce and Industry
Abu Dhabi Center for Technical and Vocational Education and Training
A LOCAL SERVICE AGENT AGREEMENT OR A MEMORANDUM OF ASSOCIATION (MOA) (LSA)
A Memorandum of Association is required for the following legal types of business:
Limited liability corporation Limited partnership (LLC)
Joint-stock business that is publicly traded (PJSC)
a private joint stock corporation (PrJSC)
A notary public, courts, and UAE-based legal firms create and attest the MoAs and other agreements.
A local service agent is required for any business owned by a non-GCC resident. Either the court or a notary public attests to the agreement between the two parties.
ABU DHABI CHAMBER OF COMMERCE AND INDUSTRY MEMBERSHIP
All people, whether UAE residents or foreigners, who participate in any type of industrial, commercial, professional, or vocational activity in the emirate of Abu Dhabi must join the Abu Dhabi Chamber of Commerce and Industry, according to Law 7 of 1988. This applies to solo proprietors, branch representatives, and corporations.
THE BUSINESS LICENCE IS ISSUED
To get a business licence, the next step is to pay the cost and meet all other legal criteria. Business operations can begin after the licence is issued.