What are the general procedures to obtain a commercial license?
How to start a new business in Abu Dhabi?
There are six steps for Starting Business in the Emirate of Abu Dhabi:
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:
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:
Types of Licenses:
There are several entities, which issue licenses in the Emirate of Abu Dhabi, according to the type of license:
* 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
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:
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:
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:
What are the procedures and the required documents to establish a branch for a foreign company in the Emirate of Abu Dhabi?+
Approaching the related licensing authority and submitting the following documents:
*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:
Are there free zones in Abu Dhabi?
Yes, free zones based in the Emirate of Abu Dhabi are distributed in accordance with the following places:
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.
What are the prerequisites and documents particularly required for setting up a limited liability company (LLC)?
An introductory overview on the LLC:
Getting a licence issued for a limited liability company (LLC):
After obtaining the trade name and preliminary approval, the following required documents should be provided for issuing the licence:
What are the forms of commercial companies according to the law?+
According to the federal Law No.(2) of 2015, the legal forms of commercial companies are:
What is the foreigner’s maximum share in the capital of a company established in the UAE?+
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.
What is the competent authority to issue trade names?
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:
What is a “sole proprietorship” and what is the difference between it and a company?
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.
How long is the validity period for the trade licence?
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
Is there a specialized authority to issue industrial licenses in Abu Dhabi?
The Industrial Development Bureau is the competent authority to issue industrial licenses. For the required documents and conditions, please follow the link.
Is it possible to add activities to a company’s licence?
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.
Is it possible for the licence to be renewed after one week as from the expiry of its validity?
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.
Is it permissible for a foreign investor to participate in more than one licence?
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.
Is it permissible for GCC citizens to have full possession of a business/company?+
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
Can a fine be waived in case of delayed renewal of membership?
Yes, a business can be relieved of a fine levied on delay if it fulfills the following prerequisites: