Business Set Up in Abu Dhabi: Free Zone vs Mainland

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Legal Requirements for Company Formation in Abu Dhabi

Abu Dhabi opens and array of new business opportunities for all the foreign investors. There are various possibilities for company formation that global investors can pursue when they decide to launch a new company in the UAE. In case of an onshore formation, the company should get a UAE local partner roped in or engage with a UAE national agent.

Steps of Setting up a Business in Abu Dhabi

1. Decide
Decide the activity and legal form
2. Register
Register your Trade Name and Activity you want to perform
3. Memorandum of Association
Getting the Memorandum of Association or National Service Agency Agreement notarization onshore
4. Location
Determine the business location
5.Approvals
Getting the required approvals of government authorities
6. License
Getting the government license(s) issued
Legal Requirements for Company Formation in Abu Dhabi
If you are planning for 100% foreign ownership, then there are six categories of companies that you can register in Abu Dhabi:
Representative Office
A GCC Company Branch
Foreign Company Branch
Civil Works Company
A Free Zone Company Branch
Foreign GCC Branch (must have one GCC national shareholder or one foreign shareholder)
In addition, there are four more company categories that are permitted to be registered in Abu Dhabi, besides the wholly foreign-owned alternatives:
Local Branch
Sole Establishment
Sole Proprietorship L.L.C
A Limited Liability Company (LLC)

Free Zone vs Mainland Company Setup in Abu Dhabi

Aspect

Free Zone

Mainland

Ownership

100% foreign ownership permitted.
100% foreign ownership allowed in most sectors.
Market Access
Operations are generally limited to within the free zone. Engaging directly with the UAE mainland market requires additional permissions.
Unrestricted access to the UAE market, including the ability to work with government clients.
Taxation
Typically exempt from corporate tax, provided no business is conducted with the mainland.
Subject to a 9% corporate tax.
Licensing Authority
Managed by respective Free Zone Authorities (e.g., ADGM, Masdar City, KIZAD).
Regulated by the Abu Dhabi Department of Economic Development (ADDED).
Business Activities
Suitable for specific sectors like finance, technology, and logistics.
Allows a broader range of business activities, including those requiring interaction with the public sector.
Setup Cost
Generally lower initial setup costs.
Costs may vary depending on the business activity and requirements.
Office Requirements
Mandatory to lease office space within the free zone.
Office space requirements are flexible and can be located anywhere in Abu Dhabi.
Visa Eligibility
Eligibility for residency visas for investors and employees, subject to the free zone’s policies.
Eligibility for residency visas for investors and employees, with processes managed through ADDED.
Audit Requirements
Varies by free zone; some may require annual audits.
No mandatory annual audit requirement.
Government Contracts
Not permitted to undertake government contracts.
Eligible to bid for and execute government contracts.
Company Formation in Abu Dhabi

Why Choose IMC for Business Setup in Abu Dhabi

We are here to assist you with any queries and do the documentation for you.

We’ve simplified and streamlined all the processes for you to make it quick and simple to get your company started.

Want to learn more about expanding with our Business Setup in Abu Dhabi?

Speak to one of our experts today.
Akansha

Akansha

Manager

Start Your Business Journey in Dubai with Confidence

Setting up a business in Dubai has never been easier. Our comprehensive company formation services take care of everything – from business registration and regulatory compliance to strategic planning – so you can focus on what truly matters: growing your business.

With a deep understanding of Dubai’s dynamic market, our experienced team provides personalized solutions tailored to your goals. We’ll help you navigate local regulations, optimize your operations, and set a strong foundation for success.

Whether you’re a startup or an established enterprise, we’re here to simplify the process and support you every step of the way. Let’s turn your vision into reality – seamlessly and efficiently.

PRO Services in Dubai – FAQs

  • Choose your business activity, legal structure, and apply for a license through the Abu Dhabi DED or a free zone authority.
  • Complete approvals, arrange office space, and register for relevant visas and permits.

Abu Dhabi has six main free zones, including ADGM, KIZAD, Masdar City, ADAFZ, and Twofour54. Each zone focuses on specific industries and offers various business benefits.

The cost depends on factors like your business activity, location, and office needs. Our business setup consultant can help you get an accurate estimate.

A local sponsor is required for specific activities on the Abu Dhabi mainland, depending on the license type.

Our business setup consultants in Abu Dhabi guide you through each step—right from documentation to approvals, making the setup process smooth and compliant with local regulations. We handle the formalities so you can focus on your operations.

Most Abu Dhabi free zone companies are not subject to corporate tax. However, this can change based on business type and latest regulations.

  • Mainland businesses can serve clients across Abu Dhabi and the UAE without restrictions.
  • Free Zone companies enjoy full ownership and tax perks, but are limited to operating within the zone.

Yes, foreign nationals can start a business in Abu Dhabi. Many sectors now allow 100% foreign ownership without needing a local sponsor.

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