A business can be practiced in UAE only after the Department of Economic Department of any emirate licenses it.
Abu Dhabi has created an environment of opportunity for companies and entrepreneurs from the UAE and the rest of the world with a supportive regulatory environment, a clear road map for development and restructured government departments dedicated to serving businesses and residents. The Government is committed to the ongoing evaluation of its legislation, legal systems and government processes to ensure the Emirate is an attractive investment destination. Favourable tax laws are among Abu Dhabi’s key competitive advantages when it comes to attracting business. The UAE Government levying no corporate or income tax is an incentive to many foreign investors and the Government recognizes the importance of maintaining a favourable tax regime to retain its competitive edge in attracting inward investment.
The Emirate of Abu Dhabi owns majority of the hydrocarbon resources in UAE and holds 9% of the world’s proven oil reserves and almost 5% of the world’s natural gas. Abu Dhabi has had great success in balancing its budget over the past three decades. Revenues from oil rents, investments and other sources of income have ensured the Emirate has rarely run a fiscal deficit, even in times of regional economic instability.
The business growth in Abu Dhabi is supported by Abu Dhabi Economic Vision 2030 professionally and comprehensively planned to transform the Emirate’s economy by 2030. The key goals include reducing oil and gas sector’s share of economy, significantly diversifying the scope of economic activity into education, banking and finance, tourism, media and manufacturing sectors such as aluminium and petrochemicals and with a particular focus on nurturing and developing knowledge-economy industries. The Abu Dhabi Vision 2030 has been named in a list of the top 100 infrastructure projects worldwide, alongside a host of other projects from the UAE and the wider Arabian Gulf.
The international companies setting up in Abu Dhabi can obtain significant cost advantages not generally available internationally like
With its strategic location, tax-free living and consistently strong economic outlook, Abu Dhabi is the ideal base for multinationals and other companies targeting markets in Central Asia, the Middle East, Africa, the Asian Subcontinent and the Eastern Mediterranean.
Abu Dhabi is a wise choice to start a business and establish business presence if the investor has a viable business plan and want to tap into one of the safe, affluent and fast growing market in the world. These are a few requirements the consideration of which is indispensable in planning even the initial phase of setting up business. These include office space required for business, targeted market for business, number of shareholders and human work force required. It is based on this a suitable option of business registration can be decided. The above requirements also become important factors in deciding the legal structures of business.
The companies in UAE are governed under Federal Law No (8) of 1934 or the Commercial Companies Law in the UAE issued by Late Sheikh Zayed bin Sultan Al Nahyan and published in the Official Gazette No 137 of April 1984. Therefore a reference to a company in Abu Dhabi always implies a UAE resident company registered with the Abu Dhabi Department of Economic Development subject to the laws of land of UAE. But there is also other option of setting up businesses in Abu Dhabi as non-resident companies that are subject to different rules and regulations. This option is registration of business in Free Zones of Abu Dhabi.
A business license in Abu Dhabi is a certificate that permits a natural person or legal entity to practice a particular type of activity in line with the legal requirements and conditions relating to that particular activity in Abu Dhabi. The Abu Dhabi Department of Economic Development is the key government body issuing business licenses for resident companies in the Emirate of Abu Dhabi. The Free Zone Authorities in Abu Dhabi are the government bodies registering businesses with a non-resident legal status.
The primary step in setting up a business entity in Abu Dhabi is the selection of business activities. This is so because the other phases of business setting up including the selection of proper legal business structure and number of business licenses can be decided only based on the selected business activities. In Abu Dhabi, the business licenses are mainly classified into commercial, industrial, agricultural and professional. The business activities classified as professional necessitates a business structure where partners can be held personally liable. A Limited Liability Company will not be therefore issued a professional license. A commercial license on the other hand is issued to Limited Liability Companies (LLC). However a professional license mostly allows a legal business structure with 100% foreign ownership unlike the Limited Liability Companies (LLC) in which the UAE National holds at least 51% equity in share capital.
The Free Zones in Abu Dhabi, like everywhere else in UAE, offers 100% ownership to foreign investors. Learn More About Licensing in Abu Dhabi Free Zones
The Ministry of Foreign Trade is currently drafting a Foreign Investment Law that is aimed at enhancing the country’s investment climate and fostering economic diversification. It provides greater protection and several incentives for foreign investors to encourage foreign investment in the country and explain the investors’ rights and duties on a basis of fairness.
The UAE is ranked 33rd in the World Bank’s index of best countries worldwide in the ease of doing business and is aiming to improve its position in the coming years. Another report released by World Bank and International Finance Corporation (IFC) ranked UAE among the top 10 countries that provide a more favourable climate for foreign investment.
Abu Dhabi boasts an excellent and ever expanding network of broad air and road links which connect the Emirate with the rest of the nation and the world at large. Abu Dhabi is a safe, clean and crime free destination that helps businesses to thrive.
Abu Dhabi International Airport is already a major hub for cargo and passenger traffic. Both passenger numbers and cargo volumes are on a strong upward trajectory. Given local economic growth and Abu Dhabi’s easy accessibility from other growing urban centres, the airport is currently undergoing significant expansion to meet future demand. Mina Zayed, the home port of Abu Dhabi, reports double digit growth in its cargo handling and 8% growth in its passenger numbers in Q1, 2012.
Abu Dhabi offers top-notch meeting facilities, venues and services including a state-of-the-art exhibition centre, Abu Dhabi National Exhibition Centre (ADNEC). ADNEC is the world’s most modern, and the Gulf’s largest, exhibition centre that attracts as many as 1.5 million visitors annually. The unrivalled and ever improving Business Tourism infrastructure also includes many world-class hotels including the Emirates Palace, the region’s best Arabian-style hotel and other five star hotels which offer sophisticated meeting facilities.
The businesses in a region are interdependent and hence expansion of businesses happens simultaneously in all sectors of businesses with the development of infrastructure in the region. In other words, the growth does not happen to an industry in isolation. The government policies, political stability, pace of infrastructural developments and laws related to business are vital factors determining the expansion of businesses in a country. The Government of Abu Dhabi, being well aware of all the said facts, have formulated strategies that can make the emirate one of the most vibrant and prospering economies.
The Abu Dhabi Economic Vision 2030 outlines the economic diversification plans of Abu Dhabi Governement and is being implemented systematically towards Emirates’s economic growth through effective expansion of strategic sectors like energy – oil and gas, petrochemicals, metals, aviation, biotechnology, tourism, healthcare, logistics, education, media, financial services and telecommunication services. Through its Masdar initiative, Abu Dhabi hopes to become a world centre for renewable technologies.
Abu Dhabi is also intensifying its efforts to be recognized as a leading international trade hub in the region. With this in view, a comprehensive strategy that aims to achieve high growth rates in the export of both goods and services has been identified. The priority areas of this strategy include development and support for the non-oil export sector enabling local products and manufacturers for more penetration and competition in international markets.