Company Formation in the
Abu Dhabi Free Zone
Choosing the correct free zone for your business setup is crucial for ensuring your company’s success.
Formation of Companies in
Abu Dhabi Free Zones
Abu Dhabi is the largest of the seven emirates and serves as the capital of the United Arab Emirates. It accounts for over 80% of the country’s total land area. It is home to numerous free zones offering an optimal environment for company formation, providing international investors with a gateway to the nation’s vast potential and connections to the global business community.
To diversify its economy and attract global investment, Abu Dhabi has established free zones catering to various businesses, such as media, light, logistics, and medium to heavy industries. One of the key benefits of registering a company in Abu Dhabi is the extensive array of benefits and facilities available to shareholders within these free zones, providing a comprehensive support system that instils a sense of comfort and confidence.
Advantages of Setting Up a Company in the Abu Dhabi Free Zone
Each free zone in Abu Dhabi offers tailored benefits to specific types of businesses. For instance, IT-focused zones cater directly to IT enterprises, including software development companies, tech startups, and digital marketing agencies. However, several general advantages apply across all Abu Dhabi free zones:
- Numerous networking and collaboration opportunities.
- Simplified incorporation process with the help of advisors.
- Quick visa and immigration processes for foreign skilled professionals.
- Streamlined laws and regulations for easier business operations
- Direct communication with authorities.
- 100% foreign ownership allowed.
- Full repatriation of profits and capital.
- No personal income tax.
- Complete exemption from import and export customs duties.
- Access to top-tier business infrastructure in the UAE.
Legal Entities in Abu Dhabi's Free Zones
In Abu Dhabi’s free zones, businesses and individuals can establish legal entities in the following manners:
1. Free Zone Limited Liability Company (LLC):
This structure offers a high degree of flexibility, as it can be owned by one or more shareholders, who may be individuals, corporations, or a combination of both. The minimum capital requirements vary based on the economic activity.
2. Branch of a Foreign Company:
A foreign company can conduct business in the UAE or establish an office or branch after acquiring a Ministry of Economy and Commerce license. This does not extend to international companies licensed to operate within a UAE-free zone.
3. Branch of a UAE Company:
A UAE-based company can establish a branch in a free zone, on the mainland, or offshore. Each location provides different benefits and regulations, so it is essential to comprehend the distinctions thoroughly before deciding.
4. Freelance License:
This permit is tailored for individuals who prefer to work independently, affording them the ability to operate as solitary practitioners under their own name rather than a brand name.
Establishing a Free Zone Business in
Abu Dhabi Free Zones
The government of Abu Dhabi actively promotes international investment by streamlining the process of establishing businesses within its free zones. This process is designed to be uncomplicated, efficient, and devoid of excessive bureaucracy, providing expatriate entrepreneurs with a reassuring and confident start. As autonomous regions, Abu Dhabi’s free zones offer a single-window administration system, empowering expatriate entrepreneurs to wholly own their businesses (100% ownership) without needing a local partner. The Abu Dhabi Free Zone Authority (FZA), an independent government entity, issues free zone operating licenses, registers non-resident companies, and supports the business establishment, thus instilling a sense of control and empowerment in entrepreneurs.
Steps to Establishing a Business in the Abu Dhabi Free Zone:
Identify your business activity, as each category entails specific regulations that guide you through the relevant rules and procedures.
Register your company’s trade name by submitting a list of potential names to the Abu Dhabi Free Zone Authority. The name must be approved and not already registered in the UAE. The trade name should conform to specific regulations, including:
- Not violating the country’s morality or public order.
- Including the firm’s legal form (e.g., FZE, LLC, DMCC).
- Not being registered by another company.
- Being compatible with the legal status and type of business.
- Avoiding names of governing authorities, religions, logos, or foreign organizations.
Secure dedicated office space in the Abu Dhabi Free Zone through purchase or lease. The size and type of office space needed depend on the number of employees and the nature of the business activity. The office space utilized determines the issuance of licenses.
Obtain approval for your business license after registering your trade name. Choose the appropriate license based on your business activity from the following options:
- Industrial license
- Manufacturing license
- Media license
- Offshore license
- Warehousing license
- Commercial or trade license
- Consultancy or services license
- E-commerce license
- Educational license
- Freelancer license
Acquire the necessary Free Zone Authority approvals to issue your business license after meeting all initial requirements.
After receiving approval, proceed with company registration and pay the required license fees. The cost of the license depends on its type.
- A notarized and attested board resolution naming the company’s manager or director.
- Passport-sized photograph of the company’s manager or directors.
- Share capital information.
- Power of Attorney for the company’s management or directors.
- Specimen signature of the company’s management or director.
- Notarized and attested Articles of Association and Memorandum.
Companies in Abu Dhabi free zones must adhere to necessary regulations such as Ultimate Beneficial Ownership (UBO), Economic Substance Regulations (ESR), and Anti-Money Laundering and Combating Financing of Terrorism (AML-CFT). Non-compliance can result in severe penalties, including the suspension of trade licenses.
Abu Dhabi’s free zones are strategically located to offer premium addresses and easy access to major trading centres. The regulations for setting up a business in these free zones are straightforward. Yet, new entrepreneurs should seek professional guidance to navigate immigration and labour laws, ensuring they feel supported and secure in their business decisions.
Gulf Access offers expert advice on free zone company formation across the seven emirates. Please call +1 (647) 830-6265, WhatsApp +1 (647) 830-6265, or email info@gulfaccess.ca.