Companies and investors looking to establish a foothold in the UAE capital must accomplish two things before being recognized as a legitimate business: trade license acquisition and incorporation. These requirements necessitate the accomplishment of various specific application processes to give businesses legitimacy to operate in the emirate.
If you do not know how to register a company in Abu Dhabi, then you will find the processes tedious and confusing.
Emirates Zone is a professional company formation consultancy that guides and assists investors and companies that do not know how to register a company in Abu Dhabi, so they can set up their office quickly and cost-effectively.
Start business on the right foot, with the help of Emirates Zone today - your trusted experts in business setup in Abu Dhabi
Setup new business: Free Zone or Onshore?
There are five free zones located across the emirate at the moment:
Abu Dhabi Global Market - Finance sector
Abu Dhabi Airports Company - Logistics sector
Kizad - Industrial sector
Masdar City - Green Technology sector
TWOFOUR54 - Media and Communications sector
New businesses can choose to open their doors in these specialized areas or outside of these areas, and take advantage of various benefits. It depends on your corporate strategy and plan for growth.
Advantages when you setup new business as a free zone
Investors that choose to start business as a free zone company can enjoy numerous benefits, including the following:
Absolute company ownership
Freedom from corporate and income tax
Complete repatriation of profits
Independent rules and regulations
Freedom from customs duties
Restrictions of companies in free zones:
Corporate operations must be conducted within the geographic limitations of their designated zones
Any business activities with mainland clients must be done through distributors or agents
Dealings, tenders, contracts with the local government must be accompanied with a mainland DED license
Company formation outside of special zones
In mainland company formation, on the other hand, businesses may be structured as any of the following corporate entities:
Limited Liability Company
Foreign Branch Office
To start business as any of these entities, an investor must partner with a local entity who can stand as a Sponsor for LLC or a National Service Agent for Representative or Foreign Branch Offices.
Ready to take the first step of business setup? Get in touch with Emirates Zone today, and let us guide you through it.
Free zone companies
The free zones generally attracts businesses from certain sectors. This is deliberate, so that they can supply goods and services to each other. This is important because legally, a free zone company must carry out their work within the geographical limits of the free zone ....
Free zone companies
The free zones generally attracts businesses from certain sectors. This is deliberate, so that they can supply goods and services to each other. This is important because legally, a free zone company must carry out their work within the geographical limits of the free zone, although meetings can be arranged outside of the free zone.
Benefits of being a free zone company include:
100% foreign ownership
100% corporate and income tax exemptions
100% repatriation of profits
No Customs Duties
Restrictions of being a free zone company include:
Limited to operating within the geographical zone, or overseas
To deal with mainland clients, it would be necessary to engage with an agent or distributor
To export products onto the mainland Duty would be applicable
Government tenders and contracts generally require a mainland DED license
It can also be quicker and cheaper to incorporate a free zone company. However, this is not always the case – a recent comparison for a client looking to set up in a freezone actually revealed it was cheaper for them to set up onshore and the ongoing annual fees to operate were significantly cheaper onshore due to a requirement of the free zone for a particular sized commercial premise (please note, this is a client example with a specific operating activity and would not be the same in all instances).
In many cases, the activities you want to engage in will determine the legal structure of the business; However, this is not always the case. There are three main onshore structures to be considered: Representative Office, Foreign Branch Office or Limited Liability Company (LLC) .....
In many cases, the activities you want to engage in will determine the legal structure of the business; however, this is not always the case. There are three main onshore structures to be considered: Representative Office, Foreign Branch Office or Limited Liability Company (LLC).
Local Sponsors and National Service Agents
Setting up a business onshore in Abu Dhabi, it is a requirement to engage with a local partner either as a National Service Agent (for a Rep Office or Foreign Branch) or a Sponsor (for an LLC).
National Service Agent
The Service Agent facilitates a foreign company being able to set up as a Rep Office or Foreign Branch in Abu Dhabi. They also take on liability in terms of Labour and Immigration (visas). A Service Agent does not have any shareholding in the Abu Dhabi business and they will be remunerated in the form of an annual fee.
The sponsor holds the 51% Emirati share of an LLC. The type of arrangement will vary depending on the requirements for the local sponsor. An actively engaged sponsor will fund their 51% shareholding and also take their 51% share of profits. They will also be actively involved in decision making and the management of the business. A nominee sponsor will not fund the 51% shareholding, but will act as a silent partner and in effect hold the 51% shareholding in trust until such time the foreign party chooses to sell, share transfer or liquidate the business. With such an arrangement a side agreement is usually set up where the nominee signs management control of the business to the foreign party and elects for the foreign party to receive their share of the profits. The nominee sponsor is remunerated with a fixed annual fee. In both scenarios, the sponsor takes on Labour and Immigration liability for visas.
How to choose a local sponsor or service agent
It is important to understand what you want from a sponsor before meeting with potential candidates. Here are five questions to consider:
Do you want an actively engaged sponsor or a nominee sponsor?
If you sponsor promises opened doors, contracts and introductions, how will you ensure that they follow through?
Will your busy, high profile sponsor be available for document signings upon request?
What happens to the 51% share of your Abu Dhabi business if the sponsor should die?
What is your exit strategy and is it enforceable?
Open LLC Company
In this form of sponsorship, the shares are divided between the investor and sponsor. At Emirates Zone, we guarantee the safety of our clients' shares and investment.
How much does it cost to set up a company in Abu Dhabi?
Freezone setup costs
Costs will vary by freezone, structure, activity, premises, and number of visas. However, these are the costs to be aware of:
Registration Fee (one time fee)
Name reservation fee (one time fee)
Annual License Fee
Annual rental for premises
Visa per person (lasts for 3 years)
Legal templates are usually used and personalized, accordingly.
If an individual is setting up an LLC, they will be required to show share capital of AED150,000 throughout the incorporation process. Upon receipt of the Trade License, this share capital can be converted to working capital.
Mainland setup costs
Costs will vary depending on structure, activity, premises and the number of visas. However, there are the costs to be aware of:
Government and third party fees (Trade License, Notary fees, legal translations, typing centers, government department registrations - mix of one time and annual fees)
Incorporation fees (submission of documents, arrangement of approvals / inspections - one time)
Sponsor fees (annual)
Legal fees (one time)
Commercial premises (annual)
Registration of new company with Immigration and Ministry of Labor (one off, with renewal of Establishment card only, every two years)
Visa per person (usually lasts for 2 years)
There are a number of annual costs:
Annual costs to maintain a free zone entity in Abu Dhabi
Corporate PO BOX
Annual costs to maintain a Rep Office or Foreign Branch Office in Abu Dhabi
PRO Service fees to manage the Trade License renewal
Trade License fee
Chamber of Commerce registration
Ministry of Economy registration
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Firstly, I just want to say thank you to the whole team at Emirates Zone for their amazing service. They took care of everything from the start to the finish and took away all the headache from me. If you’re thinking about starting your own business - I highly recommend you get in touch with them.
I wanted to open a brach of my company in Abu Dhabi with our headquarters in Saudi but didn’t know how to go about it. Thanks to Emirates Zone everyting was a great success and business has never been more thriving. Appreciate it and Thank you.