If you are considering setting up a business in Abu Dhabi Mainland, it is essential to have a clear understanding of the process and requirements involved. The task may seem overwhelming, but with the right guidance and support, you can navigate through the intricacies smoothly. DBS Business Setup, a reputable consultancy and service provider based in Dubai, offers comprehensive business setup, company formation, and business incorporation services across the UAE and GCC. Their expertise spans various aspects, including business registration in mainland, free zones, and offshore locations, obtaining necessary approvals from government departments and authorities, opening corporate and business bank accounts, VAT and tax registration, and much more. By utilizing their services, you can streamline the process and ensure compliance, enabling you to focus on building your successful business venture in Abu Dhabi.

Requirements for Setting Up a Business in Abu Dhabi Mainland

When it comes to setting up a business in Abu Dhabi Mainland, there are several requirements that need to be met in order to ensure a smooth and successful establishment. From legal entity types to trade name registration and from ownership structure to visa and labor approvals, understanding and fulfilling these requirements is crucial. In this article, we will explore each of these requirements in detail to provide you with a comprehensive guide on how to set up a business in Abu Dhabi Mainland.

Legal Entity Types for Businesses in Abu Dhabi Mainland

Before starting the process of setting up a business in Abu Dhabi Mainland, it is important to determine the most suitable legal entity type for your business. There are several options available, each with its own advantages and requirements. The main legal entity types for businesses in Abu Dhabi Mainland are:

1. Limited Liability Company (LLC)

An LLC is a popular choice for those looking to set up a small to medium-sized business in Abu Dhabi Mainland. It requires a minimum of two shareholders and allows for a flexible ownership structure.

2. Public Shareholding Company (PSC)

A PSC is a type of joint-stock company that issues shares to the public. It is best suited for larger businesses that plan to raise capital through public investment.

3. Private Joint Stock Company (PJSC)

Similar to a PSC, a PJSC is a joint-stock company. However, the shares in a PJSC are privately held, making it more suitable for businesses that do not plan to issue shares to the public.

4. Partnership Company

A partnership company requires a minimum of two partners and is suitable for businesses with multiple owners who wish to share the profits and losses of the company.

5. Branch of a Foreign Company

If you already have a company registered outside of Abu Dhabi Mainland and wish to expand your operations, you can establish a branch in the mainland. This allows you to operate under the same name and brand as your foreign company.

6. Representative Office

A representative office is a non-trading entity that is established to promote the interests of a foreign company in Abu Dhabi Mainland. It is limited in its activities and cannot engage in any commercial transactions.

Trade Name Registration

Once you have determined the legal entity type for your business, the next step is to register a trade name. The trade name is the name under which your business will operate and be recognized. Here are the steps involved in trade name registration:

1. Guidelines for Trade Name Selection

When choosing a trade name, it is important to ensure that it complies with the guidelines set by the Abu Dhabi Department of Economic Development (DED). The trade name should not be offensive, misleading, or similar to an existing business.

2. Trade Name Reservation

To reserve a trade name, you need to submit an application to the DED. This can be done online or through a service center. The reservation is valid for 60 days and can be renewed if needed.

3. Trade Name Approval

Once the trade name is reserved, it needs to be approved by the DED. This involves a review of the application to ensure compliance with the guidelines. If the trade name is approved, you can proceed with the next steps of the business setup process.

Location and Premises

Choosing a suitable location for your business is crucial for its success. Here are the steps involved in selecting a location and obtaining premises:

1. Choosing a Suitable Location

Consider factors such as accessibility, proximity to target customers, availability of infrastructure, and cost when choosing a location for your business. You may also need to consider the zoning regulations in Abu Dhabi Mainland.

2. Rental Agreement for Premises

Once you have identified a suitable location, you will need to enter into a rental agreement for the premises. This agreement should be in compliance with the regulations set by the Abu Dhabi Municipality.

3. Approval from Municipality

Before starting operations, you will need to obtain approval from the Abu Dhabi Municipality. This involves obtaining the necessary permits and certificates to ensure that the premises meet the required standards.

Ownership Structure

Determining the ownership structure of your business is an important step in setting up a business in Abu Dhabi Mainland. Here are some key considerations:

1. Minimum UAE National Ownership

In most cases, businesses in Abu Dhabi Mainland are required to have a minimum UAE national ownership. The exact percentage of ownership will depend on the legal entity type and the nature of the business.

2. Nominee Arrangements

If you do not have a UAE national partner or if you wish to have more control over the business, you can enter into nominee arrangements. These arrangements involve appointing a UAE national as a partner on paper while retaining full control over the business operations.

3. Shareholding Structure

The shareholding structure of your business will determine the distribution of profits and decision-making authority. It is important to carefully consider the percentage of shares held by each shareholder and the rights and obligations associated with those shares.

Local Sponsorship

In Abu Dhabi Mainland, it is mandatory to have a UAE national sponsor or local partner for certain types of businesses. Here are some key points to consider regarding local sponsorship:

1. Role and Responsibilities of a Local Sponsor

A local sponsor acts as a partner or a sponsor for your business and is a UAE national or a company wholly owned by UAE nationals. The sponsor’s role is to provide support and assist with various government-related matters.

2. Eligibility Criteria for a Local Sponsor

To be eligible as a local sponsor, an individual must be a UAE national and meet certain criteria set by the authorities. These criteria may include a minimum age requirement and specific qualifications or experience.

3. Drafting a Sponsorship Agreement

A sponsorship agreement is a legal document that outlines the rights and responsibilities of both the foreign investor and the local sponsor. It is important to carefully draft this agreement to ensure that the interests of both parties are protected.

Initial Approval from DED

Before proceeding with the business setup process, you will need to obtain initial approval from the Abu Dhabi Department of Economic Development (DED). Here are the steps involved:

1. Documents Required for Initial Approval

You will need to prepare and submit various documents, including a copy of your trade name reservation certificate, a copy of your lease agreement, and copies of the passports of all shareholders and sponsors.

2. Submitting the Application

The application for initial approval can be submitted online or through a service center. Make sure to provide accurate and complete information to avoid any delays or rejections.

3. Approval Process

Once your application is submitted, it will go through a review process by the DED. This process typically takes a few days, after which you will receive the initial approval certificate. This certificate is a crucial step in the business setup process and allows you to proceed with the next steps.

Memorandum of Association

The Memorandum of Association (MOA) is a legal document that outlines the objectives, activities, and governing rules of the company. Here are the key points to consider when drafting the MOA:

1. Contents of a Memorandum of Association

The MOA should include the trade name and address of the company, the objectives and activities, the shareholding structure, the rights and obligations of shareholders, and any other provisions necessary for the operation of the company.

2. Drafting and Notarizing the Memorandum

The MOA should be drafted by a legal professional familiar with the laws and regulations of Abu Dhabi Mainland. Once the MOA is prepared, it needs to be notarized by a Notary Public in Abu Dhabi.

3. Approval from Notary Public

After notarization, the MOA needs to be submitted to the Notary Public for approval. The Notary Public will review the document to ensure compliance with the laws and regulations of Abu Dhabi Mainland.

Commercial License Application

obtaining a commercial license is one of the final steps in the business setup process. Here is what you need to know about the commercial license application:

1. Documents Required for License Application

The documents required for the license application include the initial approval certificate, the trade name reservation certificate, the MOA, the lease agreement, and the passports of all shareholders and sponsors.

2. Submitting the Application

The license application can be submitted online or through a service center. Make sure to provide accurate and complete information to avoid any delays or rejections.

3. License Fee Payments

Once the application is submitted and approved, you will need to pay the required license fees. The fees vary depending on the legal entity type and the nature of the business.

4. License Issuance

After the license fees are paid, the authorities will issue the commercial license. This license allows you to legally operate your business in Abu Dhabi Mainland.

Conclusion

Setting up a business in Abu Dhabi Mainland requires careful attention to the various requirements and procedures. From determining the legal entity type to registering a trade name, obtaining the necessary approvals, and drafting the required legal documents, each step plays a crucial role in the success of your business. By following the guidelines and working with the relevant authorities, you can ensure a smooth and efficient process to establish your business in Abu Dhabi Mainland.