Abu Dhabi - Licenses

Abu Dhabi is the largest Emirate and the capital of the UAE, located on the south-eastern side of the Arabian Peninsula, besides the Persian Gulf. The city constitutes more than three-quarters of the area of the country of UAE, and is the second most crowded Emirate in the federation, after Dubai. Notwithstanding the 10% of the world's oil reserves and is one of the largest oil producers, Abu Dhabi has been expanding its economy outside of oil export since 2009. The city has been funding heavily in real estate, industrial development, retail, and tourism.

Why Set Up New Business in Abu Dhabi?

Abu Dhabi, being the administrative capital of the UAE, is one of the most sought-after offshoring places in the world. It accounts for 95% of the country's total oil reserve and offers diverse investment occasions to almost all economic sectors.

Here are a few other advantages of setting up a business in Abu Dhabi:

• Abu Dhabi occupies a prominent location between Europe, Asia, and Africa – and thus has close access from the rest of the world
• The Emirate allows for 100% foreign ownership and provides an exemption from corporate and personal income tax
• There are no foreign exchange controls, quotas or trade barriers
• The living standards in Abu Dhabi are top-notch, with world-class facilities in healthcare, residences, recreation, education, and transportation.

Business setup in Abu Dhabi one has to obtain a specific license depending on the business activity. Few of the business licenses are mentioned as follows-

Commercial License - This license is issued to the companies engaged in general business activities like public trading companies, hospitals and clinics, construction and real estate, and business contractors

Occupational License – This license is issued to the businesses which involve individuals using their mental and intellectual capabilities, talents, and abilities to serve clients. Examples for an occupational license are law firms, accounting and audit firms, research and development firms

Professional License – This license is issued to artisans and other professionals who personally engage in the practice of a particular craft. These individuals may work alone or work up to five people. Examples for professional license include carpentry, smithery, and steelwork

Industrial License – This license is issued to the businesses who wish to set up manufacturing operations in Abu Dhabi. The Higher Corporation issues the license for Specialized Economic Zones (ZonesCorp)Tourism License – This license is issued by the Abu Dhabi Tourism and Cultural Authority (TCA). This license is granted to companies offering tourism-related services like hotels, travel agencies, boat rentals, etc.

Before a new business set up in Abu Dhabi, one must know guidelines, features, facts, and regulations so that there wouldn't be any problem in the future.

1. Local Sponsor

Local Sponsor in general terms refers to the local service agents and the nominee shareholders in the Mainland companies in Abu Dhabi with foreign investment. A sponsor must be an Emirati (UAE national) with a family membership card. If an individual wants their business to start in Abu Dhabi mainland, then they must have a local sponsor. A local sponsor in Abu Dhabi is mandated to own 51% of shares in the business, while foreign investors will own the remaining 49%. While choosing a local sponsor, it is essential to understand what one wants from them. Here are a few questions to consider-

Do you want an actively engaged sponsor or a nominee sponsor?If your sponsor promises opened doors, contracts, and introductions, how will you ensure that they follow through?Will your busy, high profile sponsor be feasible for document signings upon request?What happens to the 51% share of your business in Abu Dhabi if the Sponsor should die?What is your departure strategy, and is it enforceable?

2. Chamber Membership

Law No. (7) of 1998 requires all the nationals and foreigners, involved in any commercial, industrial, professional, or vocational activity within Abu Dhabi Emirate, whether they are individuals, branches or companies, must join the Abu Dhabi Chamber of Commerce and Industry and obtain its membership as a prerequisite to acquiring a business license in Abu Dhabi.

3. PRO Services

Every company in Abu Dhabi requires the services of a Government Liaison Officer, otherwise known as a Public Relations Office or PRO. Abu Dhabi PRO services refer to all activities related to processing governmental documents and paperwork, such as visa applications, company trade licensing documentation and approvals, and labor cards. PRO services in Abu Dhabi include-

• Document attestation
• Visa renewals and cancellation
• Trade license
• Regulatory approvals
• General document clearance
• UAE certified legal translation

Following are the documents required to set up a business in Abu Dhabi Free Zone:

1. Company Application Form
2. Passport copies of the shareholders
3. Passport size photographs with white background
4. 2-3 suggested names for the new company
5. Specifications of the business activity
6. Number of visas required
7. 2 x Proofs of Address (dated within 3 months)Bank or Professional Reference Letter
8. Curriculum Vitae (summary of professional history), for freelance license
   

Below are the steps to be followed for starting a company in Abu Dhabi.

1. Determine the Type of Economic Activities

It behaves you to gain a clear understanding of your intended business activity before initiating the procedures, since legal proceedings and fee may vary depending on the character of your business.

2. Find a Local Sponsor

As per the UAE jurisdiction, foreign companies need a local sponsor (a service agent or a company owned by UAE nationals) to open a branch office in Abu Dhabi. A local sponsor will facilitate the necessary licenses for the branch office without bearing any liability to capital contribution or losses.

3. Determine the Legal Form of Business

Rules and regulations are different for different ownership types and business establishments. You need to select a legal entity type to run your business.

4. Register Your Trade Name

A trade name distinguishes a company and describes its nature and legal form. We help our clients in not only setting up a business in Abu Dhabi but also in registering a trading name from the list of registered trade names provided by the Department of Economic Development (DED).

5. Fulfill Licensing Requirements

The various types of licenses issued by the Abu Dhabi licensing authority are:

• Agricultural License
• Commercial License
• Industrial License
• Professional License
• Tourism License
• Vocational License

6. Get Special Approvals

• A foreign investor is required to obtain approvals from the following authorities:
• Abu Dhabi Customs Authority
• Abu Dhabi Distribution Company
• Abu Dhabi Education Council (ADEC)
• Abu Dhabi Foo/d Control Authority
• Central Bank
• Medical Council
• Ministry of Agriculture and the Department of Health
• Ministry of Civil Aviation
• Ministry of Economy
• Supreme Petroleum Council
• Telecommunications Regulatory Authority

7. Obtain the Initial Approval

An approval from the General Directorate of Residency and Foreigners Affairs - Abu Dhabi (GDRFA) is necessary for international investors before making the initial approval. An initial approval certificate is expected to continue with the business licensing formalities that permit foreign nationals to practice their desired business activity in Abu Dhabi. We help our clients get all the necessary approvals from the concerned officials, including the DED, and help them pay legal the fee for getting a business license issued.

Once a business has been registered in Abu Dhabi, there are a few things that must be taken care of. Like,

Company Card (Labor Card)

Every company operating in the UAE has to be registered with the Ministry of Labor and the Department of Immigration. Without these cards, a company will not be Sponsor (or legally employ) staff. The Ministry of Labor or Labor Department in the UAE administers all employment-related issues. The MOL is accountable for issuing labor cards and compelling labor bans on those who are permitted to one.

Visa

People from different countries have to satisfy different criteria to get a valid visa to enter the UAE. Depending on your requirements, you have to apply for the type of visa. Different visas available in the UAE are-

• Work visa
• Travel visa
• Visit visa
• Tourist visa
• Transit visa