A company formation in Abu Dhabi or the opening of a new branch of an existing company in UAE is important for all investors from all over the world. Abu Dhabi is now one of the most stable, secure, and prosperous markets in the world.
The establishment of a project or the opening of a company in Abu Dhabi requires full familiarity with all the legal systems, requirements, and procedures necessary to complete this so that the problem does not inadvertently impede the effective start of the project.
A lawyer, a professional legal advisor, or a business setup consultant in Abu Dhabi should be consulted to facilitate all required legal procedures and fill gaps related to knowledge of the local culture of the UAE in general and Abu Dhabi in particular.
Trade Name Registration in Abu Dhabi
To obtain the approval of the Department of Economic Development on the trade name, the following conditions must be met:
- The trade name should not contain inappropriate words and should not violate public taste
- The name should be followed by a reference to the legal form of the company
- The name should not be registered by another company
- The company’s name accurately reflects the business
- The name should not contain the name “Allah” or “the Lord” nor any of the names of Allah
- The name does not contain the name of a government agency or the names and logos of third parties
Canceled Trade names are subject to the end of the booking period if renewed. The Company may change its name to another by special decision, provided that the change does not affect its rights and obligations.
Business Setup in Abu Dhabi, UAE
The setup of businesses within the UAE requires the completion of a series of procedures and approvals required by the Department of Economic Development and other concerned entities to formally register the establishment.
One of the steps to set up a business in Abu Dhabi is to determine the nature of the activity or type of activity. Economic activities can be classified into three main categories: commercial, professional, and industrial.
The choice of activity depends on the type of company you plan to establish:
- Solidarity Company: The company can only engage in commercial and industrial activities
- Limited liability company: A limited liability company may engage in any industrial, commercial, or professional activity except for legal and auditing activities and any other type of advisory activity. Except for Law and Audit activities of financial consultations, provided that the approval of the organizers of this activity.
- Public Shareholding Company: The partners can carry out commercial, industrial, and professional activities.
- Private Shareholding Company: A private joint stock company may engage in any commercial or industrial activity.
- Civil Business: Partners can only practice professional activities.
- Branch of a Gulf company, or branch of a local company: The branch can perform any or all of the activities listed in the license of the parent company.
- Branch of a foreign company: branches of foreign companies can practice professional activities, business representative office activity, and indirect business activities.
- Free Zone Company Branch: A branch of a free zone company may engage in commercial, industrial, and professional activities as long as the parent company’s activities are licensed within the UAE.
- Individual institution: The enterprise can practice commercial, industrial, and professional activities.
The Legal Form of the Company Must Be Determined
This depends mainly on the nationality of the owners and the type of activity. it may be (LLC company formation in Abu Dhabi or free zone companies formation in Abu Dhabi)
The company takes one of the following forms:
- Solidarity Company
- Simple recommendation company
- Limited Liability Company
- Public Shareholding Company
- Private Shareholding Company
Other Corporate Forms
- Individual institution
- Civil Business Company
- Commercial Representation Office
Also read: 4 Updates Released by the Government that Every Investor Should Know
Business Ownership in Abu Dhabi
In the free zones that grant foreigners full ownership of their projects, expatriates wishing to engage in business activities in Abu Dhabi need to have an Emirati partner or partners whose share is not less than 51% of the company’s capital under Commercial Companies Law No. 8 of 1984. The law also allows foreign companies to open branches or offices within the state provided that this branch or office appoints a citizen service agent.
As for foreign companies that do not wish to have a direct presence in the country or obtain a trade license, they can discharge their products or services within the country by appointing a commercial agent by Law No. (18) of 1981 and its amendments in Law No. (14) 1998 on the regulation of commercial agencies.
How to Register a Branch in Abu Dhabi
To start a branch of a foreign company in Abu Dhabi,
- Appointment of an Emirati agent as a “Local Service Agent”
- Obtaining a commercial license from the Abu Dhabi Department of Economic Development
- Entering the company in the Commercial Register and Register of Foreign Companies at the Ministry of Economy
- Having an independent budget and a separate profit and loss account for the company’s branch
- The appointment of an auditor for the company branch is registered in the register of accountants and auditors in the State
- Save your business documents and books within the UAE
- Adherence to the basic terms and conditions on which the license was issued
- Presenting the Auditor’s report annually to the Ministry of Economy and a copy of the budget and final accounts
- Notification to the Ministry of Economy of any change in the company’s data. such as a change of name or merger with another company, within one month of such change
- Provide renewal of your company registration annually at the Ministry of Economy
The local service agent should also be consulted. The agent may be from individuals (nationals of the UAE and Abu Dhabi specifically) or from companies.
If the agent is a company, its founder and all its partners must be Emiratis. The agent’s obligations towards the company and others are limited to providing the necessary administrative services to the company, such as obtaining licenses. And does not include any liability or financial obligations related to the business or activity of the company’s branch or office in the State or abroad.
