With a strong economy, the United Arab Emirates stands as the second largest among the GCC nations. The capital city of UAE is one of the best locations for setting up a new venture as it facilitates easy connections to markets in different countries. Besides, the fast-growing market enables a fair and productive Company Formation in Abu Dhabi especially for foreign entrepreneurs looking for a stepping stone to enter in UAE.
Apart from a developed market, Abu Dhabi also holds a fortune of wealth. It is one of the largest oil producers and has a vast market of real estate, industrial development, and tourism. What’s more, it only takes nominal days to launch a new company or open a branch in Abu Dhabi.
Benefits of Company Formation in Abu Dhabi
The benefits of Abu Dhabi company formation include the following:
1. Different legal structures
Investors can utilize different forms of business structures during the company registration process in Abu Dhabi. In short, the applicant has different options of company structures to choose from.
2. Free Zones
Abu Dhabi houses more than eight free zones for conducting business. Hence, investors have the choice to opt for one of these free zones for setting up their company.
2. Integrated legal system
The consecutive government interventions have led to the transformation of the legal system in Abu Dhabi. Moreover, the capital city witnessed an increase in UK and American Law firms. As a result, the government has to respond positively to this phenomenon and accordingly change the law to make it a unified system.
3. Developed tourism
One of the largest revenues in Abu Dhabi is just from tourism. It comprises several destinations that attract more tourism. Moreover, it is a global hub and an international financial center for different entities. Considering the given reasons, investors would want to go for the expansion of their business in Abu Dhabi.
4. Tax benefits
UAE does not enforce any form of tax, including worldwide tax, personal tax, withholding tax, corporate tax, or any form of VAT. Hence, businesses that want to reduce their worldwide taxation can choose Abu Dhabi as their location, except for the oil and gas companies that are subject to corporate taxes in the country. Additionally, Abu Dhabi also permits double taxation agreements with other countries.
Eligible structures for company formation in Abu Dhabi
The business structures allowed in Abu Dhabi for company formation are as follows -
Limited Liability Company
One of the most prominent forms of business entities
Requires a minimum of two and a maximum of fifty shareholders for the formation
The liability of the shareholders is limited to the amount of shares
Requires a minimum capital of USD 40,000
Free Zone Company
Independence for foreign ownership
No forms of restrictions for recruiting foreign labors
Separate laws and regulations for each free zone
Mandates compliance with the requirements of local law
Can be established by a foreign entity
Requirement of a local agent for branch formation
Usually carries out activities undertaken by the parent company
Can conduct usual operations related to marketing
Established under the provisions of the Commercial Companies Act Number 8 of 1984 and Ministerial Decision Number 69 of 198
Established by a foreign company
Cannot conduct business operations
Only allowed to carry out other forms of activities such as market research
Established under Article (313) of the Companies Law
Connect with the business setup experts of UAE Expansion to learn more about the legal business structures in Abu Dhabi.
Eligibility Criteria for UAE Company Formation
Investors going for company formation in Abu Dhabi have to meet the following eligibility criteria:
Share capital – The applicant has to primarily fulfill the minimum capital requirements of the Abu Dhabi company formation process. For LLC formation, the minimum requirement is around USD 40,000, whereas for free zone company registration, it would be determined on a case-to-case basis.
Beneficial ownership – Foreign companies in Abu Dhabi have to fulfill the requirement for beneficial ownership. Generally, these entities have to get into a shareholders’ pact where it is mandatory to state the requirements of beneficial ownership. However, only certain companies, especially in Abu Dhabi Mainland, are required to have a UAE sponsor as the owner of 51% of the shares. On the other hand, Free Zones are free from such obligations.
Suitable company setup agency – Foreign investors going for company registration in Abu Dhabi must find a suitable agency to carry out the legal formalities of the process. There are numerous business setup companies in Abu Dhabi that are specifically employed to provide such services. Although it is not a mandatory requirement, appointing an agent would simplify the process and make it straightforward.
UAE Expansion is one of the leading company formation service providers in the UAE. You can get in touch with their professionals and share your business requirements.
Compliances for business registration in Abu Dhabi
Companies forming in Abu Dhabi need to liaise with the following compliances –
Companies, except foreign banks and those related to the oil and gas sector, are not obliged to pay any form of corporate tax in Abu Dhabi.
The corporate tax rate for foreign banks and oil and gas companies are 20% and 55% respectively.
Non-GCC countries establishing companies in Abu Dhabi are imposed 5% customs duties.
Employers and employees in Abu Dhabi companies have to contribute 12% and 5% respectively as Social Security Contributions, in compliance with local labor law.
Enterprises operating in Abu Dhabi have to submit their Annual Financial Statements to the Ministry of Economy as well as DED.
As per the Commercial Companies Federal Law No (8) of 1984, the applicant has to set up a minimum share capital to form a company in Abu Dhabi.
Business entities have to employ a manager to manage the day-to-day affairs of the company, and even state the manager’s appointment in the company’s MOA.
The companies have to report the annual return as per the requirement of the DED.
Basic steps for business setup in Abu Dhabi
Determine the type of activity you intend to perform in your company
Finalize the legal form of business that you want to establish in the region
Reserve a distinguished trade name for your venture
Get the initial approval certificate from the relevant authorities to proceed with the license application
Approach for final approvals from the concerned officials
Pay the required fee amount and obtain the license
Documentation requirements for Company Formation Abu Dhabi
Memorandum of Association and Articles of Association
Appointment letter of the Manager
Board Resolution Copy (For foreign companies opening a branch office or representative office)
Proof of share capital/Certificate of Paid up Share Capital
Deposit Slip of the amount deposited in the Abu Dhabi Bank Account
Trade Name Approval Certificate
Lease Agreement of the Office Premises
Setup Your Company with UAE Expansion
Over the years, the economy of Abu Dhabi has grown and expanded into other sectors bringing investments from all around the world. So, if you too plan to bring your business idea into this profitable land, then UAE Expansion will be by your side to help. UAE Expansion is well-equipped with all the tools you need for your business setup in Dubai, Abu Dhabi, or anywhere in UAE.