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Everything You Need to Know About Commercial Licenses in Abu Dhabi

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Establishing a business in Abu Dhabi requires obtaining the appropriate commercial license, a critical step that legitimizes your operations within the emirate. This comprehensive guide provides insights into the types of commercial licenses available, the application process, associated costs, and essential considerations for entrepreneurs.

Understanding Commercial Licenses in Abu Dhabi

A commercial license in Abu Dhabi authorizes businesses to engage in trading activities, including the import, export, and sale of goods and services. The Abu Dhabi Department of Economic Development (ADDED) oversees the issuance of these licenses, ensuring compliance with local regulations.

Types of Commercial Licenses

Abu Dhabi offers various types of commercial licenses to accommodate diverse business activities: 

    1. Standard License: Permits businesses to operate within the emirate across all legal forms, following traditional establishment procedures.
    2. Tajer Abu Dhabi License: Facilitates business setup in UAE without the need for a physical office space for the first three years, aiding in cost management. This license supports over 1,000 business activities, including e-commerce.
    3. Dual License: Allows free zone-registered businesses to operate on the mainland, expanding their operational scope. 
    4. Freelancer License: Enables individuals to offer professional services without a physical office, ideal for solo practitioners. 
    5. Small Producers License: Issued to citizens owning private farms, allowing them to provide agricultural and animal husbandry services. 
    6. Virtual License: Designed for non-residents wishing to conduct business activities in Abu Dhabi remotely.  

Steps to Obtain a Commercial License

Securing a commercial license involves several key steps: 

    1. Define Business Activity: Clearly identify the nature of your business to determine the appropriate license type.
    2. Choose a Legal Structure: Select a legal form, such as a sole proprietorship, limited liability company (LLC), or branch office, based on your business needs.
    3. Reserve a Trade Name: Propose a unique trade name that complies with ADDED’s naming conventions.
    4. Secure Premises: Obtain physical office space, unless you apply for a license type that waives this requirement (e.g., Tajer Abu Dhabi).
    5. Prepare Documentation: Gather necessary documents, including passport copies, residency visas, Memorandum of Association (MOA), and tenancy contracts.
    6. Submit Application: Apply through ADDED’s online portal or service centers, providing all required documents and fees.
    7. Obtain Approvals: Some business activities may require additional approvals from relevant authorities.
    8. Receive License: Upon approval, receive your commercial license and commence business operations.

Cost of Obtaining a Commercial License

The cost of a commercial license in Abu Dhabi varies based on factors such as business activity, legal structure, and additional approvals. While the base fee for a business permit starts at AED 1,000, total expenses can be higher when considering registration fees, office rentals, and other operational costs.  

Notably, Abu Dhabi Global Market (ADGM) has announced significant fee reductions, with new registration fees cut from $6,000 to $2,000 and license renewals for the retail category reduced by 50%, bringing annual renewal fees down to $2,000.  

Additional Considerations 

    • Legal Compliance: Ensure adherence to all legal requirements, including obtaining necessary permits and adhering to zoning regulations. 
    • Economic Substance Regulations: Be aware of economic substance requirements applicable to certain business activities, mandating substantial economic presence within the UAE.  
    • Professional Assistance: Engaging with business set-up consultants can streamline the licensing process, ensuring compliance and efficiency. 

Acquiring a commercial license in Abu Dhabi is a structured process that demands careful planning and adherence to regulatory requirements. By understanding the types of licenses available, following the prescribed steps, and considering associated costs, entrepreneurs can establish a legitimate and thriving business presence in Abu Dhabi’s dynamic market. 

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