The capital city of UAE, Abu Dhabi, is one of the thriving and progressive cities in the country. Its exceptional and myriad locations, lucrative business environment, open and vibrant economy, top-notch infrastructure, and strategic location make it a nerve center for direct foreign investments, which is why entrepreneurs and investors are looking to establish a business in the region.
However, before rushing into the process, it is important to understand the cost of starting a business in Abu Dhabi and accordingly plan your budget in order to make informed decisions.
This post will cover all the necessary costs that need to be considered while starting a new venture in Abu Dhabi.
Cost of setting up a company in Abu Dhabi
You can establish several types of companies in Abu Dhabi including mainland companies, free zone companies, and offshore companies. Every company has its own cost structure, however, some of the costs involved are indispensable. These include –
Company registration cost
The first and the most crucial is the cost of setting up business in Abu Dhabi. In short, registering your company in Abu Dhabi. The overall business setup cost in Abu Dhabi depends on several factors such as the business structure, business activity, and the chosen location within the Emirate. The additional charges will include government fees, professional service fees, trade name reservation fees, and notarization fees.
To understand the specific requirements and relevant costs, it is advisable to consult with a legal expert at UAE Expansion.
Office space:- Renting office space is a significant expense when considering the cost of starting a business in Abu Dhabi. This cost also differs depending on various factors such as location, size, and facilities. Premium locations generally have higher rents compared to areas situated outside the city. Therefore, it is vital to reckon with your business needs and then find a suitable location that aligns with your budget.
License fee:- A license is a mandatory requirement while forming a company in Abu Dhabi or anywhere in the UAE. The LLC license cost in Abu Dhabi depends on the type of business activity and the jurisdiction you choose for operating your business. Free Zone companies can avail specific packages with relevant license fees, while the fees for Mainland license is determined by the DED (Department of Economic Development). Hence, it is vital to research beforehand and understand the cost structure associated with license acquisition and renewal.
Local agent fee:- If you are establishing a company in Abu Dhabi Mainland, then you may have to hire a local sponsor or agent depending on your business activity. On the basis of the agreement between the parties, the fee or remuneration of the local agent or sponsor is decided.
To thoroughly understand the sponsorship process and the associated costs, it is suggested to avail business setup services in Abu Dhabi from a reputable firm like UAE Expansion.
Visas are necessary for both employees and business owners as it allows them to legally live and work in the UAE. This cost also varies depending on factors like the type of visa, the duration of stay, and the number of required visas. Similarly, the visa application fees would include medical examination fees, Emirates ID fees, and visa stamping fees. Therefore, it is vital to consider the visa and immigration expenses while calculating the cost of starting a business in Abu Dhabi.
Employees are the backbone of any organization, and therefore, they cannot be disregarded while calculating the cost of starting a business in Abu Dhabi. Employee remuneration, monetary benefits, visa and residency costs, medical insurance, and end-of-service assistance are a few of the costs included in this section.
Moreover, considering the strict regulations of the UAE, it is crucial to comply with the labor laws and ensure that all financial obligations of employing staff are duly met.
There may be some additional expenses involved in the Abu Dhabi LLC company formation cost and they may vary depending on the nature and scale of business. For example, marketing and advertising expenses, IT infrastructure and software charges, insurance premiums, and administrative expenses.
On the whole, the specific requirements and circumstances can fluctuate the cost of each business. Nonetheless, employing the services of a UAE Expansion will help you navigate the entire cost structure and ensure compliance with the regulations.
Guide to Business Setup in Abu Dhabi
The correct procedure to start a company in Abu Dhabi includes the following steps:-
Choose a business activity that you want to engage in
Choose a business structure that suits your business needs
Obtain a trading name that is appropriate and available
Get a business license issued from the significant authorities
Acquire approvals from applicable government departments
Rent an office space to run your company operations
Open a bank account to operate your company transactions
Recruit workforces to operate your business
The documents required for this process include:-
Passport copies of all shareholders and involved partners
A tenancy contract or a utility bill as proof of residence
NOC from the local sponsor or employer
Trade name certificate
Memorandum of Association
A detailed business plan
A reference letter from the bank
Approval letters from relevant departments
Advantages of Abu Dhabi Company Formation
There are many benefits to starting a business in the Abu Dhabi region.
The largest of the seven emirates in the UAE
Accommodates more than 1.5 million people, which is almost 15% of the UAE’s total population
Streamlined business establishment process
Home to several free zones
Strategically located at the crossings of Europe, Asia, and Africa
Modern and efficient transport infrastructure
A business-friendly environment with minimal bureaucracy
Government initiatives supporting entrepreneurship and innovation
A diversified economy focusing on all sectors of business
A pool of highly skilled and diverse workforce
Availability of a range of funding options for businesses
A high quality of life, with exceptional healthcare facilities and a diverse range of leisure and cultural activities
Investor friendly policies
One-stop for all the necessary services for business setup
Types of Entities in Abu Dhabi for Business Setup
While establishing your business in Abu Dhabi, this could be one of the most important decisions that you will have to make. The legal structure of your company will depend on the nature of your business. Once selected, you can further determine how it is taxed and what are the level of liability protection for its owners.
The most common entities available for company formation in Abu Dhabi are:
Limited Liability Company (LLC)
Branch Office of a local company, GCC Company, or foreign company
Joint Stock Company (Public and Private)
Setup your business in Abu Dhabi
Starting a new company in the UAE is a straightforward process, but it requires careful planning and attention, especially with the budget. You need to choose the right business activity, appropriate structure, and a suitable location to ensure that all your business needs are fulfilled while aligning with the estimated budget. This is where you will need assistance from a professional expert like UAE Expansion who will help you start your business efficiently and resourcefully without leaving any gaps for setbacks.