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Abu Dhabi has a fast-growing and rapidly diversifying economy, and many businesses – long-established and startups – are looking to set up a base in the emirate.
But businesses in certain sectors require a commercial licence to be able to operate in Abu Dhabi. But how do you go about applying for a commercial licence? This article will take anyone looking to set up a business in Abu Dhabi through the process of applying for a commercial licence.
A commercial licence is a certificate issued to business owners that permits them to trade in Abu Dhabi. Businesses in the following sectors require a commercial licence to trade in Abu Dhabi: real estate, transport, contracting, public commerce, hospitals and clinics.
This is just one of numerous business licences that can be applied for in Abu Dhabi, which depend on the type of products or services that will be sold.
There are four sorts of commercial licence available, depending on the legal form of the business, and different conditions and requirements are needed for each. The forms are:
Establishment: This is a business owned by one person – a sole proprietor – licenced to practice a certain activity. In this form, the financial liabilities lie solely with the business owner. If the owner of the establishment is not a citizen of Abu Dhabi, they require an Abu Dhabi citizen to act as a service agent for it.
Company: This form of licence has a contract between two or more people, with the profits and losses of the business distributed between the partners. A company needs to take one of these forms: general partnership, limited liability company, commandite company, private or public joint stock company.
Branch: The business is a branch of an Abu Dhabi-based company or a foreign company that provides the same products and/or services as the main company. The branch can take one of various forms including an establishment from Abu Dhabi or another emirate, a local company from Abu Dhabi or another emirate, a foreign company, a GCC company (with or without a foreign investor, or a local or foreign company in a free zone.
Cooperative Society: A group of independent people cooperating through collective ownership of a project to achieve their economic goals.
There are certain steps that all businesses are required go through to obtain a commercial licence, which are prescribed by the Abu Dhabi Department of Economic Development.
Step 1: The first step is to decide on what the business will be called. There are certain rules that must be adhered to, which entrepreneurs need to be aware of. Firstly, the name of the business should be unique in Abu Dhabi – no other business can already be using the name.
Business names also cannot contain any profane or blasphemous language. Furthermore, the entrepreneur needs to decide on what activities the business will undertake and what form the business will have, as described above.
When applying for the commercial licence, certain documents are required to be submitted, such as copies of the entrepreneur’s passport and a certificate of initial approval.
Step 2: After this, the business needs to obtain approvals from certain authorities, such as the Abu Dhabi Municipality Public Health Division or the Abu Dhabi Chamber, depending on the activities it will be carrying out. Government agencies now have facilities to complete this online.
Step 3: Following this, certain approvals must be obtained, including from the General Administration of Residency and Foreigners’ Affairs for Security and from any external partners, if that is necessary.
Business creation consultants such as Creative Zone can help with this process. It can be complex, especially for those who have not previously encountered the system and, while it can be done alone, it is advisable to seek help to ensure the process is as smooth and as quick as possible. Contact Creative Zone for more information.
The cost of a business permit in Abu Dhabi starts at AED 1,000, although this can be significantly more, depending on what activity the business is undertaking.
Of course, this is just one expense that those setting up a business in Abu Dhabi have to consider. There are plenty of other costs that need to be taken into account, such as renting a workspace, purchasing equipment and/or stock and hiring staff, to name just three.
For more information on the costs and a personalised quote, contact Creative Zone, which can provide expert advice on the costs and how to mitigate them.
To verify a commercial licence in Abu Dhabi, people can go to a feature on the Abu Dhabi Business Centre website www.adbc.gov.ae. This enables businesses and consumers to find out information about commercial licences registered in Abu Dhabi.
This feature, which was added in 2021, provides certain information about licences issued by the Abu Dhabi Department of Economic Development. Its aim is to protect the rights of consumers, as it means they can check the legitimacy of a business before they sign any contracts or make any purchases from the business.
The licence verification service is part of the Abu Dhabi government’s ongoing work to increase protection for consumers in Abu Dhabi, build confidence in the businesses based in the emirate and cut off revenue for any unlicenced businesses.
There are many benefits of opening a company in Abu Dhabi. One of the biggest is the low tax regime. For instance, there are no taxes paid on company profit and employees pay no tax on their wages.
Abu Dhabi also has a highly developed infrastructure – technical and physical – that helps make business easy to do.
In Abu Dhabi, people can take advantage of easy access to major seaports and international airports – 80% of the population of the world is within an eight-hour flight from the emirate.
Abu Dhabi also offers a very high standard of living. It has highly advanced healthcare and education systems, as well as parks and amenities, which helps businesses to attract the best talent from around the world to work for them. The favourable visa regime is another pull factor.
Why work with Creative Zone?
Abu Dhabi is an excellent place to set up a business, but the process to do this has complexities that entrepreneurs might not appreciate, especially if they don’t have in-depth knowledge of local laws. However, by working with consultants like Creative Zone to set up your business, you can ensure that the process is handled as smoothly and quickly as possible.
Creative Zone is vastly experienced in setting up businesses in Abu Dhabi and, with our local knowledge, our consultants can navigate the complexities with skill and speed to ensure your business is operational as soon as possible.
For more information and a personalised quote, please contact Creative Zone.
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