Establishing a Legal Entity in Abu Dhabi

Abu Dhabi, a crucial constituent of the United Arab Emirates, holds a pivotal role in the nation's economy due to its substantial reserves of oil and natural gas. The resource base underscores the city's economic significance. In the next decade, the role of the city and its free economic zones will only increase, thanks to participation in the ambitious program of economic diversification Vision 2030. The government plans to reduce the emirate's dependence on oil and transition towards a sustainable diversified economy. This government course creates favorable conditions for the development of science-intensive and high-tech sectors of the economy. And every year, public investment and foreign direct investment in the development of Abu Dhabi will only increase. The diversity of free economic zones in Abu Dhabi forms a favorable investment climate.

Why investors Opt for Abu Dhabi in Foreign Business Registration?

First, this is the reputation of Abu Dhabi as a safe haven. The choice of the UAE for business relocation is due to political and economic stability, a strategically advantageous geographic location, and modern infrastructure. The active development of non-oil sectors of the economy allows investors to open companies in Abu Dhabi.

Benefits of licensing foreign companies in Abu Dhabi:

Full ownership for foreign investors who can enjoy 100% ownership of enterprises.
Tax Incentives coupled with exemptions from income tax, fostering an enticing business environment.
The absence of trade restrictions, foreign exchange controls, or quotas streamlines business operations.
An efficient banking system guarantees seamless financial transactions.
Tailored free zones designed to attract foreign investment and foster specific industries.

Abu Dhabi aims to become a center of innovation and knowledge-intensive manufacturing and creates an environment for high-tech projects and attracts A-class professionals from all over the world.

Fundamentally, establishing a company in Abu Dhabi means taking an important step towards your business development and growth. Support in obtaining an Abu Dhabi license will make this path smooth and swift. YB Case's legal and business experts calculate the cost of obtaining a license in Abu Dhabi and provide comprehensive support for the incorporation process.

Forms of Registering Foreign Companies in the UAE

Foreign companies seeking incorporation in the UAE, have the option to select from three distinct legal forms, each catering to different applicant needs and imposing varying sets of prerequisites.

Mainland companies, overseen by the Ministry of Economic Development, can exist in the following configurations:

Limited Liability Company (LLC):

This structure necessitates involvement from a local partner (either a UAE citizen or a company) and the transfer of 51% of shares to them. The remaining 49% ownership can be retained by the foreign investor. This form is suitable for enterprises engaged in diverse commercial activities.

Free zone companies

can take shape as either

Free Zone Establishment (FZE) or Free Zone Company (FZC):

These forms allow full foreign ownership and grants access to the advantages offered by Abu Dhabi Free Zones. These benefits encompass tax incentives and streamlined licensing regulations.

Offshore companies

register in offshore jurisdictions and are prohibited from conducting business in the UAE market. Instead, they serve as a means for holding assets, managing investments, and engaging in international trade.

These are the most general characteristics of the legal forms of companies in the UAE. It's essential to bear in mind that each emirate, apart from adhering to general regulations, might have its own regional rules and specific company licensing prerequisites based on the nature of the business.

Abu Dhabi's Diverse Free Zones

The capital of the UAE houses a range of free zones tailored to cater to various sectors of the economy. Each of these zones is specialized in a particular realm of activity, shaping a distinct set of prerequisites for companies seeking licenses to operate in Abu Dhabi.

Abu Dhabi Global Market (ADGM)

positioned as an international financial hub, welcomes enterprises specializing in financial services and cutting-edge FinTech developments.

Masdar City Free Zone

is the nucleus for executing the energy transition strategy at the forefront of scientific and financial innovation. Businesses dedicated to green technologies and renewable energy sources flourish here. A primary objective of this zone is to stimulate research in the realm of sustainable development and green energy.

Twofour54

tailored for the broadcast and entertainment domain, offers licensing provisions that facilitate the integration of broadcasters, production companies, advertising agencies, and marketing firms.

Khalifa Industrial Estate Abu Dhabi (Kizad)

nestled between Abu Dhabi and Dubai, stands as a hub for manufacturing, trade, and logistics. It offers investors the fully developed commercial and industrial sites along with an array of warehouses.

Abu Dhabi Industrial City (ICAD)

geared towards manufacturing and heavy industries, boasts well-developed infrastructure and production facilities tailored for the petrochemical and construction sectors.

Abu Dhabi Airport Free Zone (ADAFZ)

is the center for aviation, aerospace industries, and the associated logistics.

Tawazun Industrial Park

closely aligned with the military sector, security, and defense industries.

Each of these free zones plays a vital role in advancing Abu Dhabi's economic landscape, fostering specialization, innovation, and growth within their respective sectors.

Income Statements, Social Contributions, and Taxation for Foreign Companies in Abu Dhabi

Income Statements:

Foreign companies in Abu Dhabi are required to maintain accurate financial records, including income statements (commonly known as profit and loss statements). These statements summarize revenues, costs, and expenses over a defined period, indicating profitability or losses.

Social Contributions:

Contributions, such as end-of-service gratuity, are obligatory for employees in the UAE. Employers must adhere to regulations governing these contributions.

Taxation:

The tax environment in the UAE entails minimal to zero corporate income tax. Value Added Tax (VAT) at a rate of 9% applicable to goods and services. Customs duties apply to imports.

Abu Dhabi's Visa Policy for Foreign Entrepreneurs

The requirements for obtaining a license in Abu Dhabi have a direct impact on the region's visa policy. Foreign entrepreneurs aspiring to establish a business in Abu Dhabi must secure special authorization from the General Directorate of Residence and Foreigners (GDRFA). Per legal stipulations, foreign business proprietors are obligated to secure a resident visa, in additional visas for partners and employees.

GDRFA will assess your business proposal, financial documentation, and other details pertaining to your proposed business operations.

The core set of documents needed for registering a company, initiating a bank account with an Abu Dhabi-based bank, as well as obtaining an Abu Dhabi visa encompasses:

Application Forms
Identification Documents for Individuals
Comprehensive Business Plan
Financial Documents Validating Reporting, Activities, and Financial Standing
Copies of Licenses
Any Additional Documents that May be Requested to establishing and operating a business within Abu Dhabi.

Appropriately executed documents are necessary for the successful process of registering a company in Abu Dhabi. In general terms, this process includes the following steps: