Business entities in Abu Dhabi are regulated by the Abu Dhabi Department of Economic Development (ADDED). To register your business entity, you will need to choose a business structure from the following options:
1. Establishment
Establishment is an entity owned by one individual to undertake a business activity that includes commercial, professional, industrial, agricultural or craft.
The owner of the establishment assumes all its financial responsibilities including its financial liabilities.
2. Sole proprietorship
Sole Proprietorship allows a single member to own 100% of the business and is registered as a separate entity from its owner.
It is no longer attached to and identified with the owner for tax and liability purposes and the owner is liable only to the extent of their shares.
As of 2nd January 2021, the requirement for Emirati ownership has been annulled allowing 100% ownership of Sole Proprietorship by foreign nationals and legal entries.
3. Private joint stock company
A Private Joint Stock Company is a company where the number of the shareholders is at least two, but no more than 200.
The capital of a Private Joint Stock Company is divided into shares of the same nominal value, to be paid in full, without offering any shares to the public. A shareholder can only be liable to the extent of their share in the capital.
4. Limited liability company
A Limited Liability Company (LLC) is a company where the number of partners is at least two but no more than 50. As an exception to the minimum two shareholder rule for LLCs.
In an LLC, a partner can only be liable to the extent of their share in the capital.
5. Public joint stock company
A Public Joint Stock Company (PJSC) is a company where the number of the shareholders is at least five. The capital of the company is divided into equal and negotiable shares.
The founders will receive part of the shares while the other shares are offered to the public for purchase.
A shareholder can only be liable to the extent of their share in the capital of the company.
Significant amendments came into effect 2nd January 20215:
- Abolishing requirements of Chairperson and majority of board to be Emiratis
- Public subscription threshold has been increased from 30% to 70%
- Allowing appointment of specialist non-stakeholders as board members
Only PJSCs can conduct banking, insurance and investment activities in Abu Dhabi.
6. Branch of a foreign company
A branch or a representative office of a foreign company may be wholly owned by foreigners and is only permitted to carry out marketing and promotional activities on behalf of its parent company.
A branch of a non-Abu Dhabi company may only be registered in Abu Dhabi with the sponsorship of a local service agent who must be a UAE national or a company wholly owned by UAE nationals.
There are no minimum capitalisation requirements for a branch although the foreign company is required to provide a standard form bank guarantee from a local bank (which includes an international bank with a branch in Abu Dhabi) in the amount of AED 50,000 and to show details of its own capitalisation and good standing, together with its two most recent sets of annual audited accounts.
For more information about investing in Abu Dhabi, download the complete Abu Dhabi Investor Guide on ADIO's website, or through the download box below:
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