It is no surprise that Abu Dhabi is one of the world’s most attractive places to do business. Its strong economy and excellent infrastructure have become a hub for companies worldwide. However, setting up a business in Abu Dhabi requires more than just having an idea; it also involves obtaining a valid business licence. This article will explore obtaining a business licence in Abu Dhabi to help you get started with your business idea.
A business licence or economic licence in Abu Dhabi is an official document allowing a company to operate within the Emirate legally. Depending on the type of business activity, you may need several licences from government entities such as the Abu Dhabi Department of Economic Development (ADDED), Abu Dhabi City Municipality, Abu Dhabi Department of Community Development, or the Ministry of Economy.
The correct licence is essential when setting up a business in Abu Dhabi or the UAE. A valid Abu Dhabi business licence allows your newly formed company to operate legally in the city and conduct commercial activities with added security and confidence. Without a valid licence, your business can be subject to fines or even shut down by the authorities.
In addition to the legal validation, a business also includes a few more benefits as follows:
Business licences in Abu Dhabi are often essential to obtain a residency visa. This allows the business owner and their family to live in the city and benefit from its services, such as healthcare, education and banking.
The UAE has many residence visa options for investors and their dependent family members depending on your business licence type and nature of the investment. You can even apply for a maid visa in the UAE to assist your family.
When you have a valid business licence in Abu Dhabi, you can take advantage of the city’s competitive labour market and recruit overseas talent. A valid business licence may also allow you to obtain one or multiple employment visas for employees outside the UAE.
Overseas recruitment also allows you to recruit employees from your home country, whom you will find much easier to communicate with.
Abu Dhabi has several free zones, which give businesses access to world-class infrastructure and tax exemptions. This makes them attractive options for setting up a business in the city.
Your business can benefit from various tax breaks in Abu Dhabi depending on the type of licence you obtain. If your business operates within the free zones, you will benefit from the zero corporate tax. If it is located in the Abu Dhabi mainland, you will still benefit from zero corporate taxation up to an annual net profit of AED 375,000 in the new UAE corporate tax regime of 2023.
An Abu Dhabi business licence will let you obtain permission to export and import goods from or to the city. This will help you establish a global presence for your business and make it easier to conduct international trade. You can also apply for required custom certifications from Abu Dhabi customs for faster processing and cargo handling.
You can easily rent large facilities and warehouses to run your business or store large inventories. This will give you access to better infrastructure and more space to grow your company.
A valid business licence in Abu Dhabi is essential for obtaining regulatory permissions from local authorities. This allows you to apply for approvals, such as selling pharmaceuticals, food and beverage products or even construction permits.
It will also be easier for you to obtain preliminary approval from several regulatory bodies when you have valid documents to prove that you are already obtaining your Abu Dhabi business licence.
Now that you can easily see the benefits of having an Abu Dhabi business licence let’s explore the process for obtaining one.
The Abu Dhabi Department of Economic Development (ADDED) is the primary authority responsible for issuing business licences, also known as Economic licences in the Abu Dhabi Emirate of UAE. Depending on your business activities and structure, you must apply for the appropriate permits and licences to operate legally in Abu Dhabi.
Depending on what activities your business will perform, primarily there are several categories of economic or business licence types in Abu Dhabi, as follows:
If you want to pursue a profession in Abu Dhabi, such as accounting, engineering, legal advice or consulting services, you must obtain a professional licence from the ADDED. The professional licence is an ideal getaway to start a career in Abu Dhabi for service-based professionals. Freelancers of various sectors also belong to this category.
Note that you may require additional permits from other authorities for certain professions, such as medicine and law.
For instance, if you seek a Social Care professional licence, you must meet specific requirements from the Abu Dhabi Department of Community Development. These requirements include standardisation for your previous professional training, experience, and academic background.
Similarly, to practise as a healthcare professional, you will require approval from the Department of Health – Abu Dhabi after attending and passing the qualifying examination organised by the Ministry of Health and Prevention (MOHAP).
Business owners in Abu Dhabi who wish to set up factories and manufacturing plants need an industrial licence from the Industrial Development Bureau (IDB) of Abu Dhabi. This will allow them to get involved in large-scale industrial activities related to the industrial supply chain, procurement, material handling, and trading as third-party suppliers.
Source: Industrial Development Bureau
Also, if you want to establish a large-scale manufacturing or processing plant in Abu Dhabi, you will need an industrial licence known as the Industry Rowad. Although IDB is the final issuing authority for Industry Rowad, you can go through the application process through ADBC online portal with your UAE pass.
The benefits of obtaining an industry licence include:
- Work or employment visas for two employees
- The licence does not require any industrial site rental before the application
- Instant issuance if you fulfil the requirements
To engage in agricultural activities in Abu Dhabi, such as the production of food or any other agricultural products, you will need an agricultural licence from ADDED. This includes businesses involved in crop and livestock production, fisheries and aquaculture, forestry and horticulture etc.
The application process begins with registration at the Ministry of Climate Change & Environment (MOCCAE), responsible for issuing environmental regulations permits. Once you obtain approval from MOCCAE, then apply through ADBC online portal with your UAE pass for an Agriculture Licence, which will be issued by ADDED once all documents are verified.
When it comes to the hospitality and tourism industry, business owners in Abu Dhabi can apply for a Tourism Licence or hospitality service licence if they plan to open a hotel, resort or restaurant. Like any other economic or business licensing options in Abu Dhabi, you can apply for a tourism licence from the ADBC TAMM portal.
The Commercial Licence (CL) is one of ADDED’s most common licences. It permits you to engage in any commercial activities that do not fall under an industrial licence category such as trading, importing, exporting, providing services or renting out a property for business purposes.
Depending on the nature of commercial activities, you may also require additional permits and approvals from other entities, such as Ministry of Health & Prevention (MOHAP) if dealing with food items and Abu Dhabi Food Safety Authority (ADFSA) if dealing with food products.
Although a commercial licence may seem to overlap with an industrial licence, the magnitude of your operations will be different. A commercial licence is suitable for many business types of various sizes, whereas an industrial licence is suitable for large-scale operations.
There are several other licensing options in the commercial or business licence Abu Dhabi, which you can obtain as add-ons:
- Tech licence: The Abu Dhabi government has undertaken a specialised business facilitation programme, Hub74 Incentive Programme. If your business deals with the tech, IT, or software industries, you may apply to participate in the programme. You can then enjoy many benefits provided by the government, such as 100% subsidised office space, housing and medical insurance for up to 25 employees.
- Abu Dhabi Virtual licence: Abu Dhabi virtual business licence presents an unique opportunity to the foreign entrepreneurs who are not UAE residents. By obtaining a virtual licence, you can still run your Abu Dhabi business while residing outside of the UAE. Although, a virtual business will be subject to a few limitations and restrictions.
- ECommerce services: If your business wants to offer or sell products through website or social media channels, you must obtain a separate eCommerce service licence in addition to your regular commercial or business licence.
Craftsmanship licence is a special type of professional licence that grants permission to open a workshop, garage or any other skill-based business such as auto repair shop, tailoring store, leather craft shop etc. To obtain a craftsmanship licence from ADDED, you will also get approval from the Technical and Vocational Education Council (TVEC) of the UAE, who will evaluate your technical education and relevant experience.
When it comes to applying for your Abu Dhabi business licence, there are two pathways for you – normal licence and instant licence. Whether you should go for the instant licence pathway or the normal one, depends on your planned business activity types.
The UAE government has currently listed over 2,000 activities that qualify for the instant licence pathway. If your planned business activity belongs to one of the listed categories, you should definitely opt for an instant licence application through the ADBC TAMM online portal, a one-stop service portal developed and maintained by the Abu Dhabi government.
The main advantage of applying for an instant licence is that you won’t need a tenancy contract signed before applying. Also, as the name suggests, you will have your licence instantly after submitting all the documents and making the fees, typically within five minutes.
A normal licence, on the other hand, will require you to submit a tenancy contract with your application, and it also takes longer to get the approval, usually five to seven business days.
Source: Abu Dhabi Business Centre
When applying for your Abu Dhabi business licence, you may need to provide the following documents:
- Copy of passport or valid residence permits and recent photos of all shareholders/partners
- Trade name registration certificate, which you can obtain from the ADBC trade name registration portal prior to starting your licensing application
- Copy of tenancy contract (only required if applying for normal licence)
- Approval from free zone, if applicable
- Memorandum of Association depending on business structure
- Other documents and approval certificates depending on the activity type.
Once you obtain your business licence from ADDED, you or your clients can verify it anytime from the ADBC portal to check the UAE company registry. To perform a trade licence check, simply enter your full business’s full legal name in English, and the result will return the validity status of your business licence.
Cost of obtaining a business licence in Abu Dhabi varies depending on the type of business and its activities. Below are some of the fees that would typically incur:
- Business licence or economic licence fees
- Main licence fees: AED 790 (you can include up to six activities within this fee)
- Additional activities: AED 100 for each
- Trade name registration: AED 620
- Agricultural licence
- Each agricultural activity – AED 500 (new licence or renewal)
- Establishment of a nursery – AED 1,500
- Approval for production of fertilisers and similar agricultural conditioners – AED 5,000
- Sample analysis – AED 200
- Industrial licence: AED 800 (applicable for both individuals and partnerships, for up to six industrial activities)
- Tech licence: USD 1,000 per year (for up to 10 full-time employees), USD 4,300 per year (for 11 to 50 employees).
- Free zone fees: AED 12,000 or more
The above fees do not include visa fees, rental costs, costs related to other professional services (for example, notary public fees or MoA drafting), and any additional costs that may arise during the process of obtaining the business licence. If you consider everything, it usually costs approximately AED 25,000 to obtain a business licence in Abu Dhabi and get started with your business.
Obtaining a business licence in Abu Dhabi can be lengthy, but it is well worth the effort. Following the steps outlined above and ensuring all documentation is complete, you should have no difficulty getting your business up and running in Abu Dhabi. Once you’ve obtained your licence, keep it updated and valid at all times – it’s essential for legal compliance and the continued success of your business.
Virtuzone and its vetted business consultants have provided one-stop professional support related to business setup in the UAE. Get in touch with Virtuzone today to go ahead with your company registration.