- November 15, 2021
- Posted by: DBS
- Category: Dubai Business Services
Table of Contents
Low-Cost Business Setup In Abu Dhabi
The UAE is one of the fastest-growing economies in the region, offering a wealth of opportunities for new business ventures. Whether you’re looking to set up a high-tech operation or a simple shop, there are plenty of low-cost business setup options to choose from.
A low-cost business setup in Abu Dhabi is best for your startup. It’s the best way to start and grow your business, and also it can be done very easily. Low-cost business setup means that you will pay less tax on your income. There are many types of businesses that can be started with low cost of business setup in UAE, such as Consultancy Business, Import Export Business, Construction Business, Marketing Business, etc.…
Setting up a Business in Abu Dhabi – What you need to know
Setting up a business in Abu Dhabi and taking it to the next level is not an easy task. There are many rules and regulations that you need to know before starting your company in this country.
First Step: The most important thing is to know what type of entity your business needs to be registered as. One of the most popular types is a sole proprietorship which does not require any formal procedure or paperwork. Another option is a limited liability company (LLC), where the owners are protected from personal liability for the debts and obligations of the company.
Second Step: You also need to understand how VAT works in Abu Dhabi and select one of four available tax rates: standard, reduced, zero, and exempt. Keep in mind that if you sell goods or provide services, you will need a valid VAT ID number for each customer.
Final Step: If you decide to hire employees for your company, then you will need to know about the Labour Law. The Ministry of Labour website has all the necessary information that you’ll ever need on this subject. And don’t forget about immigration rules and regulations!
Choose the Type of Company you Want to Start
Choosing the type of company you want to set up is the first step towards kick-starting your business.
The company you choose to set up will have a major impact on the way you run your business and on the taxes, you will need to pay. In addition, it can influence whether or not an investor is willing to support your venture.
The most common types of companies are:
1. LIMITED LIABILITY COMPANY (LLC) IN ABU DHABI
This is the most flexible form of business you can set up in the UAE. It offers protection to its individual members while allowing them to retain 100% of their shares in the company. According to Article 9 of Federal Law Number 8 of 1984, as amended in 2006, LLCs are not subject to income tax on their revenues or capital gains. They can be established with minimum capital – just AED 2,000 is required to register this type of company.
2. LLP (LIMITED LIABILITY PARTNERSHIP) IN ABU DHABI
This is a new form of partnership that is available in the UAE, which was introduced to give more flexibility and options for businesses wishing to set up their business here. The liability of the individual members of the LLP is limited. Like LLCs, this type of company offers complete protection to its partners against any personal liability they may face due to the business they are involved in.
3. PJSC (PUBLIC JOINT STOCK COMPANY) IN ABU DHABI
This is the most common form of company that is set up in Abu Dhabi, and it is required when applying for a trading license. The liability of the shareholders is limited to the amount they invested and did not extend beyond that.
Partnerships are commonly used for small businesses and general trading activities where the owners don’t want to go through a full incorporation process. However, a Partnership can be established as a Limited Liability Partnership (LLP), which offers more protection against the personal liability of the partners.
5. PRIVATE LIMITED COMPANY (LLC) IN ABU DHABI
This is the most common form of business in UAE. The LLC is a separate legal entity with its own rights and duties under UAE Law, which means that the owners are protected from any liabilities or obligations that may arise out of the activity of the company. It requires a minimum paid-up capital of AED 2,000.
Benefits of Low-cost Business Setup in Abu Dhabi
The world is in a downfall, and it’s not going to get any better. The only way to ensure your business’s survival is to do related research so you can easily take advantage of opportunities when they arise. As of today, Abu Dhabi has had a great shift in its economy from being dependent on oil to being an industrialized country.
Now you may be wondering what the benefits of a low-cost business setup in Abu Dhabi are.
Here are some amazing benefits of doing a low-cost startup in Abu Dhabi:
- First, you can get all your business licenses through the Department of Economic Development (DED) for free. DED was created by UAE to boost trade opportunities and create employment opportunities for the country.
- You also don’t have to pay value-added tax, or VAT, which is a sales tax collected on most goods and services purchased in the United Kingdom every time you make an exchange on your business. In Abu Dhabi, there’s no such thing as VAT, although the sales tax collected on most goods and services purchased in Abu Dhabi is called “AED” or the Abu Dhabi tax. However, that is still negligible compared to VAT in the UK.
- Finally, you don’t have to pay income tax which only applies if your business’s turnover reaches AED 50,000 per year, according to www.uaestatistics.gov.ae. So it’s pretty straightforward that you can easily avoid these taxes by simply limiting your business turnover to not reach that amount.
We think it’s a good idea to do a low-cost start-up in Abu Dhabi since you don’t have to pay much, and the fees are pretty straightforward without too many complications. It’s an easy way for people who want their own business to avoid all the difficult procedures without worrying too much. I think Abu Dhabi is a good place to start any business, especially if you’re trying to keep your expenses down like most people are doing these days.
Comparison of Low-cost Business Setups In Abu Dhabi
The UAE is a country that offers its citizens and residents many benefits and incentives, and it is easy to see why so many businesses choose the Emirate of Abu Dhabi as their base. With a tax-free environment, an array of incentives for foreign investors and residents, and a good transport network in place, the City of Tolerance is one of the most attractive cities to open or run a business in.
The usual minimum capital requirement for an LLC (a UAE Corporation) setup is AED 500,000 (over $136K US).
However, using existing licenses, various low-cost options are available that can reduce the setup costs to as little as AED 25,000 (less than $7K the US) with no need for any capital.
If you already have an existing LLC trading in your home country or any other GCC nation, then follow the process below to save money on the launch of your new business in Abu Dhabi:
- Get a No Objection Certificate (NOC) from the Ministry of Economy in Abu Dhabi.
- Approach your existing trade agent in Abu Dhabi who will act as Director for the new company after getting NOC. This can be your agent, a friend, or anybody else willing to help you.
- Apply for a license to operate the business under the home country agent’s name. The application must be submitted along with a NOC letter from Abu Dhabi, trade license details of your existing company, and its shareholders’ passport photocopies.
- Once the Trade License is granted, you can start operating your business in Abu Dhabi.
- As there is no need for any capital investment, you can register your company for just AED 25,000 (less than $7K US). You can add a local director or shareholders at a later point when the business is operational and generating enough revenue to absorb the extra cost.
The above option requires an existing LLC trading company to act as the agent. If you don’t have one, then there are other options that can reduce your costs further. For example, an individual (a UAE national) with no business experience can act as a trade license holder and general manager to open a new branch office of his existing Dubai company (that already has a trade license).
Contact DBS Business Setup
If your startup is looking to set up in Abu Dhabi, then it may be best for you to consider DBS Business Setup. We offer quality services at affordable prices so that new businesses can start with a bang and not break the bank. Our consultants will help you choose the best setup options for your business, so don’t wait any longer to get started!
Book a free consultation today!
Call us on +97145667485 or WhatsApp on +971551129344.
You may also chat with a live agent on our website https://www.dubaibusinessservices.com/, request a call back on https://www.dubaibusinessservices.com/contact-us/ or visit our office Clover Bay Tower Office 1111, Business Bay Dubai UAE
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