How to start a new business in Abu Dhabi?

There are six steps for Starting Business in the Emirate of Abu Dhabi:

1. Determining the New Activity
2. Determining the Legal Form
3. Registration of Trade Name
4. Issuance of an Initial Approval
5. Obtaining Approvals of Concerned Authorities
6. Issuance of the License

First: Determining the New Activity

In order to start the procedures for issuing a business license, the type of activity/activities to be practiced must be specified. Requirements, conditions and fees differ according to the type and nature of activity, provided that some activities have special conditions and specifications related to the location (place and area), which means that they can only be practiced in some locations with special conditions. In line with international intents to standardize economic activities, the Department of Economic Development in Abu Dhabi has adopted the "International Standard Industrial Classification" of all economic activities (ISIC4) issued by the United Nations, which has become an important tool in the comparison of statistical data on economic activities at the international level.

Second: Determining the Legal Form

There is a range of legal forms that commensurate with the needs of business activities in Abu Dhabi (such as an establishment, a limited liability company ... etc), where laws, requirements and conditions of the legal forms differ according to the nature of the business.

Third: Registration of Trade Name

After determining the activity and legal form, a trade name must be chosen for the facility to distinguish it from other facilities, and it must appropriately suit the nature of the activity and its legal form.

Fourth: Issuance of an Initial Approval

The Initial approval is a certificate, which entitles the investor to proceed ahead with procedures for obtaining the business license, and apply for obtaining required approvals of relevant authorities to practice economic activities. The Initial approval is the stage, which precedes issuance of the business license, and it starts after approval of trade names. The initial approval does not allow the concerned person to practice the activity, unless a commercial license is issued.

The required documents to issue the initial approval:

1. Obtaining the approved trade name
2. Obtaining the approval of the Department of Naturalization and Residence for foreign investors
3. Copies of valid passports
4. Copies of valid Emirates ID
5. Payment of prescribed fees
6. Collecting the Initial approval certificate

Fifth: Obtaining Approvals of Concerned Authorities

Upon obtaining the Initial approval, you will be entitled to approach concerned authorities to get required approvals after fulfillment of terms and conditions. The issuing entity is determined depending on the type of activity to be practiced. Some governmental entities offer electronic services that allow you to follow up the application online. You can follow up your application online with the following entities:

• Supreme Petroleum Council
• Department of Transport
• Abu Dhabi Municipality – Public Health Division - Al Ain
• General Authority of Youth Sports Welfare
• Abu Dhabi Municipality – Public Health Division – Western Region
• Abu Dhabi Municipality – Public Health Division – Abu Dhabi
• Abu Dhabi Chamber
• Abu Dhabi Sewerage Service Company
• Waste Management Center
• General Directorate of Civil Defense
• Abu Dhabi Environment Health and Safety Center
• Abu Dhabi Center for Technical and Vocational Education and Training
• Ministry of Foreign Affairs

Types of Licenses:

There are several entities, which issue licenses in the Emirate of Abu Dhabi, according to the type of license:

Type of License	Description	Issuing Entity
Commercial License	Issued to owners of companies or establishments for practicing business activities. Example: (general trading, construction, real estate, transportation, clinics, hospitals, etc ...)	Department of Economic Development
Agricultural License	Issued to the owners of agricultural farms, animal production or sea products	Department of Economic Development
Professional License	Issued to artisans who personally practice a profession or craft for his own account, relying on his physical effort, or aided by some tools and equipment. Example : (carpentry, typing, steel works... etc )	Department of Economic Development
Occupational License	Issued to professionals who rely on their abilities, mental and intellectual capabilities, talents and scientific capacities. Example: (consulting offices, law firms, audit offices ... etc)	Department of Economic Development

* Some commercial licenses in free zones are issued by governmental bodies such as "Masdar Company", "Media Zone Authority - Abu Dhabi" and Higher Corporation for Specialized Economic Zones (ZonesCorp)

Sixth: Issuance of Commercial License

The conditions and requirements of the issuance of commercial licenses depend on the legal form of the facility. The below table contains all the legal forms available. You can also review the Companies Law on the Department's website https://adbc.abudhabi.ae/Citizenaccess

Establishment	The establishment is a facility owned by one person only, (sole proprietorship) licensed for practicing an economic activity (commercial, professional, agricultural or occupational). The financial liability of the establishment lies with the owner, who bears all the financial obligations of the establishment. In case that the owner of the establishment in a non-citizen, there must be a UAE citizen who acts as a service agent for the establishment Licensed business activities must have one of the following legal forms: Sole Proprietorship (Owned by a UAE citizen) Sole Proprietorship (Owned by a GCC citizen) Sole Proprietorship (Owned by a foreign investor) Sole Proprietorship (Mubdia'h Program)
Company	A facility existing by virtue of a contract concluded between two or more persons who undertake to contribute in a profit economic project, by an amount of money or work. The profits and losses resulting from the project shall be distributed among the partners The company must take one of the following legal forms: Limited liability Company (L.L.C.) General Partnership Commandite Company Private Joint -Stock Company Public Joint Stock Company
Branch	A branch of the local (Abu Dhabi) or foreign main facility (company or establishment), or a facility from another emirate, practices the same activity / activities of the main facility. The foreign companies and the companies from other emirates may practice their main activity in the Emirate of Abu Dhabi, and have offices and branches only after issuing a license from the Department of Economic Development A branch takes one of the following legal forms: Branch of a local sole proprietorship establishment (from Abu Dhabi) Branch of a sole proprietorship establishment (from another Emirate) Branch of a local company (from Abu Dhabi) Branch of a local company (from another Emirate) Branch of a foreign company Branch of a GCC company Branch of a GCC company (with a foreign investor) Branch of a local company (free zone) Branch of a foreign company (free zone)
Cooperative Societies	Cooperative Societies: Independent group of persons cooperating willingly together in order to satisfy their economic needs through a collective ownership of the project, in accordance with Law No. 6 of 1974 concerning the cooperative societies and its amendments by Law No. 20 of 1981

Approaching the related licensing authority and submitting the following documents:

• Duly signed Trade name registration Form
• Copy of a valid passport of the UAE national
• Copy of valid Family Book
• Commercial Register of the mother company
• The decision of the General Assembly of the mother company to open a branch in the Emirate of Abu Dhabi
• Authorized Signatory of the company “Appointment of a Manager”
• A copy of the Articles of Association of the mother company
• An undertaking by the mother company to bear all the legal and administrative responsibility in the emirate.

*Kindly make sure the documents are translated and duly attested

After obtaining the trade name and the initial approval, the following documents are required to issue the license:

• Commercial License Application Form duly signed
• Certificate of Trade Name
• Certificate of Initial Approval
• Copies of valid passports for UAE citizens
• Copies of valid Emirates Id for UAE citizens
• Copies of Family Book for UAE citizens
• A copy of the valid lease contract attested by the Municipality
• Copies of Signature authentication attested by the Notary Public
• An approved photo or photocopy of the trade name sign board, which carries the calligrapher’s signature, seal and board measurements
• No objection letter from the competent authorities in case that the activity may not be practiced except with an authorization from the competent authorities
• Service Agent Contract attested by the Notary Public
• Certificate of Registration in the Ministry of Economy

Conditions:

• All the required documents must be in Arabic. If any documents are not in Arabic
• The License Application Form shall be submitted by the owner of the establishment or by a legally authorized representative
• The owner of the establishment must be at least 21 years of age
• All required documents shall be attached as electronic copies in PDF format. Originals shall be presented for verification
• Terms and conditions apply

Yes, free zones based in the Emirate of Abu Dhabi are distributed in accordance with the following places:

• Masdar City,
• Kizad City,
• The Free Zone at Abu Dhabi Airport, and
• Abu Dhabi Media Zone

The incorporation of a commercial company in one of the free zones in the UAE is an attractive option for foreign investors thanks to the ensuing incentives being offered by such zones to investors: Foreign investors 100% ownership of companies without the need for a local partner; Complete holiday of import and export taxes; Freedom of full repatriation of capital and profits; Companies are exempted from taxes for 15 years renewable for similar periods; No taxes are levied on personal income; and Assistance is given in providing labour and such additional support services as sponsorship and accommodation. Every free zone is controlled by an independent authority entrusted with the responsibility for issuing operational licences and helping companies establish businesses inside the zone. An investor can register a new company in the form of a free zone business or a licence 0f a branch or representative office of an existing or parent company, local and foreign alike. A free zone business is a limited liability company, which is governed by laws and regulations applicable in the free zone where it has been incorporated. The free zone business is not subject to articles of the Commercial Companies Law except in case of its acquisition of the UAE nationality, provided that the free zone has conditions pertinent thereto.

An introductory overview on the LLC:

• The number of partners should neither exceed fifty ones nor be less than two
• The number of managers should be no more than five and no less than one
• The company's memorandum of association/incorporation should include the following data:
• The company's name, purpose and head office;
• Partners' names, nationalities, residences and addresses;
• The amount of capital, each partner's share, a statement of in-kind shares and relevant values, along with names of those presenting such shares, if any;
• The company managers' names and nationalities besides names of the oversight and control council's members in cases where the law makes it an imperative for such council to exist;
• The date for the company's beginning and end;
• The way profits and losses shall be distributed;
• The form to be considered in the company's reporting of notifications addressed to partners and the Ministry may develop a form for the company's memorandum of association, including the aforesaid and other data at its own discretion;
• The company's manager or whosoever acting for him should apply for entering it into the Ministry of Economy's Commercial Register; and
• The share of UAE partners (be they natural or juridical/corporate persons) into the company's capital should be no less than 51% out of the gross or aggregate shares.

Getting a licence issued for a limited liability company (LLC):

• Approaching the appropriate licensing entity,
• Proceeding to one of the Department of Economic Development (DED)’s or its branches' customer service centres to submit the transaction, and
• Providing the following required documents on a CD or USB in a PDF format in order to obtain both the trade name and preliminary approval

Documents:

• A signed application form for issuing a trade name,
• A copy of the valid passport,
• A copy of the valid Emirates ID card, and
• A copy of the family record’s extract

After obtaining the trade name and preliminary approval, the following required documents should be provided for issuing the licence:

• A signed application form for issuing the trade licence,
• A signed application form for issuing the trade licence,
• The preliminary approval's certificate,
• A copy of the valid passport,
• A copy of the valid Emirates ID card,
• A copy of the family record’s extract,
• A copy of a valid lease contract attested by the competent Municipality Department in the city,
• A copy of approving the specimen signature attested by the Notary Public,
• A model approved by a calligrapher for the placard (banner), carrying the calligrapher's stamp and placard's measurements,
• A no-objection letter from competent bodies in case of an existing activity which shall not be practised but by a permission from the concerned entities,
• A copy of the memorandum of association attested by the Notary Public,
• Getting the contract published in the Ministry of Economy, and
• A copy of the Directorate of Citizenship and Residence's approval for a foreign investor

Conditions:

• The Directorate of Citizenship and Residence's approval for a foreign investor should be obtained posterior to the issuance of the trade name and prior to obtaining the preliminary approval;
• All required documents should be submitted in Arabic; and in case of existing non-Arabic documents, these should be rendered into Arabic by a certified legal translator and be attested (Attestations by the Ministry of Foreign Affairs and the Embassy for companies incorporated outside the UAE);
• The licensing application should be submitted by either the persons concerned or ones who act on such persons' behalf by virtue of a legal authorization / power of attorney;
• Ages of those concerned should not be less than 21 years old; and
• All required documents should be made available in an electronic PDF format copy accompanied by originals; and
• Terms and conditions shall apply

According to the federal Law No.(2) of 2015, the legal forms of commercial companies are:

1. Joint Liability Company
2. Simple Commandite Company
3. Limited Liability Company
4. Public Joint-Stock Company
5. Private Joint-Stock Company

According to the federal law on companies, the share of a foreigner in a national company must not exceed 49% of the total shares of the company. In case of branches of foreign companies, the foreigner may possess 100% of the shares of the company.

Prior to proceeding with trade licence issuance formalities, all companies in Abu Dhabi must apply for obtaining a trade name from the Department of Economic Development (DED).

Trade name is the official name of a business used to distinguish it from other businesses. DED maintains a register of all trade names which contains the names of traders, trade name owners and their addresses, among other details.

The Department also specifies the rules and conditions for registering a trade name, the legal procedures involved in the issuance of a trade name, or any other restrictions on the use of such a trade name.

How to Register a Trade Name

The trade name service of DED enables business owners to check for all reserved as well as available trade names in Abu Dhabi through DED’s searchable trade name register. If the desired trade name is available, traders can apply for reserving that name by filling up the online application form and providing all required information including the details of partners and the intended activities. The applicant will receive an email notification which he can use to follow up on the status of the application later. To meet the rules and conditions set by DED and due to the diversity of names, traders should first apply to reserve the trade name and get the approval of the Department before the actual reservation of the required trade name.

Trade Name Registration Conditions

The registration of the Trade Name shall be subject to the following conditions:

1. The name should not have been previously registered or currently used for the same category of activity or for a similar type of activity.
2. The name must be compatible with the required type of activity and legal status.
3. The name should not contain Allah Almighty’s Names, names of any religion, denomination, governing authority or names or logos of any local, Arab and international bodies, institutions and organisations.
4. The trade name should not be identical or similar to any local or international trade name registered with the Ministry of Economy.
5. The trade names should not violate the public law and order.
6. The trade name should not be misleading to the consumer with regard to the type of business, its importance, size, etc.
7. Trade name will be canceled automatically at the end of the booking period if the name-holder fails to issue a trade licence.
8. The Department of Economic Development has the right to cancel or change a trade name if it finds out that the trade name is identical to an existing trade name or not compliant with the terms and conditions set by the Department.

A “sole proprietorship” is a legal form owned by one person and foreigners may possess artisan and handicraft proprietorships, provided that there should be a services agent for such a proprietorship/company. The minimum number of partners is 2.

The validity period of the trade licence is for one year as from the date of relevant issuance, and such validity shall be renewable on an annual basis

The Industrial Development Bureau is the competent authority to issue industrial licenses. For the required documents and conditions, please follow the link.

Yes, it is permissible to add activities to a company’s licence, provided that the activity required to be added should be within the same scope of the company’s main business. However, it is always advisable to approach the concerned licensing entity for consultancy and guidance. It is noteworthy that adding a new activity to the licence may sometimes entail an amendment of both the company’s trade name and the area of the place. In addition, the Inspection Section's relevant approval should be obtained.

Those concerned shall be granted both a one-month’s grace period/notice after the licence’s expiry date and a 14-day period of grace for the Chamber’s membership. Fees levied on delay shall be calculated as from the expiry date by adding the daily outstanding amount to the annual renewal fees.

Yes, a foreign investor has the right to take part in an unlimited number of trade licences within the general conditions and rules applicable by licensing authorities.

Yes, with the exception of some economic activities previously determined by the Department of Economic Development (DED). For further information on activities the full ownership of which is not allowed for a GCC citizen, kindly refer to the Customer Service Centres of the DED

Yes, a business can be relieved of a fine levied on delay if it fulfills the following prerequisites:

1. The business is either an Emirati one or a company having at least one UAE partner with a 51%-share
2. The business has been vulnerable to some coercive circumstances/force majeure, which has been conducive to its inability to effect renewal at the appointed time. Supporting documents of such circumstances should be enclosed with the renewal transaction submitted to the Chamber
3. A letter from the owner stating briefly the reasons of failure to effect renewal at the appointed date
4. The transaction should be submitted at the head office in accordance with the region​​​