Over the years Dubai has emerged as a strategic business hub due to the world class infrastructure, a business-friendly environment and more. If you are considering starting a business in Abu Dhabi, you are at the right place. We will dive deep into company formation costs in Abu Dhabi, different aspects of company formation which will help you make informed decisions.
Type Of Company
Let’s look into the different types of companies formed in Abu Dhabi and the costs involved in company formation in Abu Dhabi.
A sole proprietorship offers full control, it is the most affordable option for small businesses but one must also consider that it can carry higher personal risks as the owner is liable for the business debts. It usually costs around AED 10,000 to 15,000 depending on factors like licensing.
If you are considering starting a medium-sized business, then you can opt for a limited liability company. The costs vary anywhere between AED 20,000 and 40,000 with variations depending on the jurisdiction (mainland or free zone) and other factors such as office space requirements.
A public limited company is suitable for large scale businesses that require large capital which is raised by issuing shares to the public. The costs involved in setting up this company are the highest among the three as they involve complex legal and financial requirements.
Area of Operations
Now that you have finalized the kind of ownership one must understand the area of operations or the territories one must operate in.
Mainland Companies – Here you can operate within the UAE and internationally. The costs involved is anywhere between AED 20,000 to AED 50,000, depending on factors such as:
- Trade license – Costs anywhere between AED 10,000 to AED 15,000
- Local sponsor fee – If applicable, this can range from AED 10,000 to AED 25,000 annually, as 51% UAE national ownership is required unless you’re in certain professional categories.
Free Zone Companies – In this type of company one can enjoy different types of benefits like 100% foreign ownership, zero import/export duties. The cost can range from anywhere from AED 15,000 to AED 50,000, depending on the specific free zone and its regulations.
Offshore Companies – If you are looking to operate internationally without having a physical presence, then this is ideal for you. The set-up costs for an offshore company range between AED 12,000 to AED 20,000.
Nature of Business
The next step in company formation is to consider the nature of business where the company operates. This determines the type of license which directly impacts the overall costs of formation. A business involved in specialized activities, such as healthcare, real estate, or education, may require additional permits from relevant government authorities, pushing the costs higher. For instance, setting up a healthcare business may require approvals from the Dubai Health Authority (DHA), while an industrial business might need clearances from environmental and safety departments, adding around AED 5,000 to AED 10,000 in additional fees.
Additional Expenses:
One must also consider the additional expenses that will have to be borne. A significant portion of money will be used for renting out office space as this requires significant capital. Once you have chosen physical office space you must also bear the equipment that is necessary for these offices. These can be as simple as chairs, computer systems, hardware or software systems required to run your business efficiently.
While the costs of company formation may seem very significant, we must also keep in mind that there are immense opportunities for growth and expansion in Abu Dabi. BLZ ensures that it takes you through different regularities involved and assures you every step of the way. By partnering with experienced PRO service providers like BLZ, you can navigate the complexities of company formation and ensure compliance and efficiency.