Mainland Company Formation in Abu Dhabi

1. What is a Mainland Business in Abu Dhabi?

A mainland business is an entity that is registered under the Abu Dhabi Department of Economic Development (ADDED). Unlike free zone companies, mainland businesses are not restricted to operating within certain areas. They can conduct business anywhere in the UAE and internationally. Mainland businesses also have the flexibility to engage in a wider range of activities and can take on government contracts and projects, a feature unavailable to many free zone entities.

Key Benefits of Setting Up a Mainland Business in Abu Dhabi:

• No Trade Restrictions: Mainland businesses can operate freely within Abu Dhabi and across the UAE.
• Government Contracts: You have the opportunity to bid for government projects and contracts, which can be highly lucrative.
• Office Location Flexibility: You are not restricted to a particular geographical zone, allowing you to choose the ideal location for your office anywhere in the city or region.
• Access to Local and Global Markets: Mainland businesses can tap into both local and international markets without any restrictions.
• No Currency Restrictions: You can freely transfer capital and profits without limitations.

2. Mainland Business Ownership Structure in Abu Dhabi

As of recent regulatory changes, Abu Dhabi allows for 100% foreign ownership of mainland businesses in many sectors. This makes the emirate even more attractive for international investors who want full control of their business. However, certain business activities (such as oil and gas, banking, and defense) still require a local Emirati sponsor or partner.

Mainland businesses can be formed under different legal structures, which include:

1. Limited Liability Company (LLC): This is the most common legal structure, allowing multiple shareholders. For many business activities, 100% foreign ownership is permitted, though some sectors may still require a local partner.
2. Sole Proprietorship: For individuals who want to have complete control over their business. Certain professional activities, such as consulting and service-based businesses, are eligible for 100% ownership.
3. Civil Company: This is suitable for professional practices, such as law firms or engineering consultancies, where multiple professionals come together to offer services.
4. Branch of a Foreign Company: For international companies that want to expand their operations into Abu Dhabi, opening a branch can be an effective way to maintain 100% foreign ownership.

3. Types of Business Licenses for Mainland Companies

The type of license you will need depends on the nature of your business. Abu Dhabi’s Department of Economic Development issues several types of licenses, which include:

1. Commercial License: Issued for businesses involved in trade, including the import and export of goods. This is ideal for companies in retail, general trading, or specific commercial activities.
2. Professional License: Required for service-based businesses like consulting, legal, or marketing firms. In most cases, 100% foreign ownership is allowed under this license.
3. Industrial License: This license is for companies involved in manufacturing and industrial activities. You will need this license if you plan to set up a factory or engage in production-based work.

4. The Mainland Business Setup Process in Abu Dhabi

Here’s a detailed breakdown of the step-by-step process for setting up a mainland business in Abu Dhabi:

Step 1: Choose the Business Activity

The first step in setting up your mainland business is deciding on the type of business activity you want to engage in. Abu Dhabi’s Department of Economic Development (ADDED) offers a broad range of activities, from trading and consulting to real estate and industry. It’s crucial to select the appropriate category that aligns with your business goals.

Step 2: Select the Legal Structure

Once you’ve chosen your business activity, you need to decide on the legal structure that suits your needs. Most businesses opt for an LLC due to its flexibility, but you may also choose to operate as a sole proprietorship or branch of a foreign company.

Step 3: Reserve Your Trade Name

You must choose a unique trade name for your business. The trade name should reflect the nature of your business and comply with ADDED’s regulations. It cannot include any offensive language, religious terms, or references to government entities. Once approved, the trade name is reserved for a set period during which you can complete the registration process.

Step 4: Apply for Initial Approval

The next step is obtaining initial approval from ADDED. This approval indicates that the Abu Dhabi government has no objections to the formation of your business. During this step, you will submit information regarding your business activity, ownership structure, and shareholders.

Step 5: Draft the Memorandum of Association (MOA)

If your business requires multiple shareholders or local sponsorship, you’ll need to draft a Memorandum of Association (MOA). This document outlines the responsibilities, profit-sharing arrangements, and management structure of the business. If 100% ownership is allowed, you’ll skip this step for professional service companies and certain commercial activities.

Step 6: Rent Office Space

Mainland businesses in Abu Dhabi are required to have a physical office space to complete the registration process. You need to secure office premises and sign a lease agreement. The lease agreement (Ejari) is part of the documents submitted to ADDED for final approval.

Step 7: Obtain Additional Government Approvals

Certain business activities require additional approvals from relevant authorities. For instance, if you’re setting up a medical practice, you will need approval from the Department of Health. Similarly, construction companies may require approvals from the municipality or other local bodies.

Step 8: Final Submission and License Issuance

After completing the steps above, you will submit all your documentation to ADDED for final approval. Once your application is reviewed and approved, you’ll be issued a business license, allowing you to officially operate in Abu Dhabi.

5. Required Documents for Mainland Business Setup

Here is a list of essential documents you’ll need to submit for mainland business setup in Abu Dhabi:

• Copies of shareholders’ passports
• Proof of residential address (for foreign shareholders)
• Trade name reservation certificate
• Initial approval certificate from ADDED
• Memorandum of Association (if applicable)
• Ejari (office lease agreement)
• NOC from current employer (if applicable)
• Additional approvals (depending on the business activity)

6. Cost of Setting Up a Mainland Business in Abu Dhabi

The cost of mainland business setup in Abu Dhabi can vary based on several factors, including the type of business, office rental costs, visa fees, and any additional approvals required. Typical expenses include:

• Business license fees
• Trade name reservation fees
• Office rental costs
• Visa processing fees (for shareholders and employees)
• Local sponsor or service agent fees (if applicable)

It’s important to plan for both the initial setup costs as well as ongoing expenses, such as office rental and visa renewals.

7. Working with AYN Business Consultants for Abu Dhabi Mainland Setup

Navigating the mainland business setup process in Abu Dhabi can be complex, especially when it comes to handling government approvals and documentation. At AYN Business Consultants, we provide comprehensive services to help you at every stage of the process. Our services include:

• Business setup advisory and consultations
• Trade name reservation assistance
• PRO services for document submission
• Office space solutions
• Visa processing for shareholders and employees
• Local sponsorship or service agent arrangements

We streamline the process so that you can focus on growing your business in Abu Dhabi.

Conclusion: The Gateway to Business Success in Abu Dhabi

Setting up a mainland business in Abu Dhabi opens up a world of opportunities. With no market restrictions, access to lucrative government contracts, and a strategic location in the capital of the UAE, Abu Dhabi mainland companies are well-positioned for success. The process of establishing a mainland business may seem complex, but with the right guidance and support, it can be a smooth and rewarding experience.

Contact AYN Business Consultants today to learn how we can assist you in starting your business journey in Abu Dhabi, ensuring a seamless and efficient setup process.