For more detailed information on the costs of setting up a business in Abu Dhabi, read on about the necessary steps and licensing.

Factors that may affect the total cost

1. The business structure: The legal structure of the business will impact how much it costs to set up and keep a business running. A business could be a sole proprietorship, LLC sole establishment, LLC company, or company branch. 
2. The company’s services: the kind of activity your company focused on is an important factor because it determines what kind of licensing is required. The business may engage in commercial activities, industrial activities, or may offer professional services. 

Licensing required to do business in Abu Dhabi.

Licensing required for every business may differ depending on your business structure or nature of its services. All the licensing listed here are mandatory for their applied fields, the services of a professional company may be required during the licensing stage to ensure that everything is done accordingly and budgeted. The cumulative costs consist of one-time fees and continuous payments. 

1. Initial Approval from DED: DED stands for the ‘Department of Economic Department”, they are responsible for approving in registering business operations. The DED charges a one-time nominal fee before approving to start a business’; however, this initial approval is only valid for six months, during which you are expected to finish the other necessary documentation. 
2. Trade name approval: Asides the legal business name registered, a trading name is a name a company prefers to be known/identified as, and this name must be approved and registered before it will be used. The cost of getting a trading name approved is a one-time payment, and it also varies depending on your instruction. Fees for reservation, commercial name, foreign company name, etc. may constitute the cumulated trade name fees 
3. Renting office space: Businesses are mandated to operate within a recognized office space so that authorities can easily verify their legitimacy. This way, authorities can easily inspect and monitor business operations as well as ensure that they adhere to immigration laws. The schedule of payment intervals occurs as per the rental agreement, which could be yearly or termly. 
4. Attestation Memorandum of Association MOA: The company’s Memorandum of Association must be drafted. It incurs a one-time cost and is usually done among the company’s shareholders and may vary according to their share capital. 
5. Drafting LLC contract: Every limited liability business contract drawn in Abu Dhabi is required to be drafted in two languages – English and Arabic to enhance understanding between partners. The contract must have mutually consented among the partners, and the charge is separate from that of the interpreter. 
6. DED fees: Business setup required DED charges licensing fees. Which are made up of 5 different feeses, some of which are one-time while others are yearly, and they all add up to the total costs of setting up a business in Abu Dhabi.

•  Mainland trade licensing fee: This is a one-time expense paid to acquire a trade license, and the cost depends on the business activities. The relevant authorities monitor business activities, and these regular checks may incur other charges.
• Commercial licensing fee: The commercial licensing fee is a yearly fee charged for carrying out business activities; it is also called the Tejari fee.
• Chamber of commerce fee: The chamber of commerce fee is an annual fee paid by businesses, and the amount depends on the business activities. Usually, companies are told the amount for general trading, but manufacturing and industrial companies will pay a different price. 

• Commercial service improvement fee: The commercial service improvement fee is a yearly fee paid for all improvement works by the government.

• Administrative service fee: The Administrative fee is a one-time fee paid to DED for the paperwork carried out. 

7. External approval: Depending on the business’ activities, you may need approval from other governmental bodies, especially for professional services like transportation services, Oil services, etc. 

8. Getting Immigration Cards

After licensing, you will need to acquire the necessary cards required to get a visa. They are 

1. Immigration establishment card: Immigration card must be applied for by the company owner to enable them to employ staff and process their Resident Visas. Yearly renewal of this card is a necessary, failure of which may attract penalties. 
2. Labor establishment card: Upon application at the ministry, a labor establishment card will issue with a registration number that permits companies to apply for work permits and visas for their staff. 
3. E-signature card: A card with a code is issued to authorized signatories of companies to be used to carry out every transaction within the ministry. This card system is a more efficient replacement for the previous Signature Authorization Card Scheme. 

In conclusion, the total costs of setting up a business in Abu Dhabi includes Licensing cost with DED and Immigration costs with the ministry of works. With these carefully followed, and with the help of a lawyer and accountant, you can have a smooth business setup in Abu Dhabi. 

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Moreover, you have to follow the rules and regulations involved in bringing the business/company to reality. However, this is not plausible without knowing the cost or rather how much you will spend to get the business up and running in the UAE.

How to start?

First off is where you want to establish the business – mainland or the free zone. If your choice is for the mainland, then you need to get familiarized with the following steps.

As with any business, setting a business involves having the fund to invest, obtaining the licenses, and paying for them, but you can only do this with a valid employment visa. So two factors to consider are:

What type of business; is it industrial, professional or commercial oriented and the various licenses required

The legal entity of the company is a branch of a company, sole ownership, LLC, etc.

Another must-do is

Preliminary Acceptance from the DED

Before a business setup in Abu Dhabi, the DED approves to begin operations; this acceptance includes a one-time small charge that allows you sort out all your business operations for six months while you go ahead to complete all legalities and documentation of the business.

Certifying your business name

Your business name is how the business will be recognized in the UAE; the cost of the name depends on the availability and choice of name.

The fees requested are for name reservation, trade name, foreign company name, and others. This one-time payment also varies with the option of a trading name, as mentioned above.

Office Space for LLC Company Setup

For business setup in Abu Dhabi, investors must have a physical office where they operate from; this is compulsory and makes your business legit by the authorities. The presence of an office also allows the necessary officials to inspect, monitor, and ensure the existence. Furthermore, office rents paid annually or as agreed with the property owner.

Declaration of the Memorandum of Association

This document ensures the working relationship between the two parties in an LLC entity, showing in the business how many shares each party has in the business. It is also a one-time cost paid to the DED.

Detailing the terms of the LLC contract in Arabic and English
All the partners involved in a business bound by the terms and conditions of the business entity, LLC.

To avoid misunderstanding in the contract, it is in Arabic and English for the shareholders. It is written under the presence of an authorized translator.

Fee by the Department of Economic Development

Every LLC starting up in the UAE, must pay a one-time nominal fee to the Department of Economic Development or the Ministry of Economy. The charges are made annually and depend on the business type.

Trade License Fee on the Mainland

Even though trade license fees vary according to your type of business, you are required to pay a one-time security fee to the DED to avoid problems with inspectors. The Department regularly updates the charges; hence, a change in cost should be expected at intervals.

Commercial License Fee

Also known as the Tejari fee, this fee is paid annually for running a commercial business.

Chamber of Commerce Fee

Also paid annually, this is a fee paid by all trading companies. Charges differ for manufacturing and industrial companies.

Commercial Service Improvement Fee

An annual remission to the improvement work carried out by the government departments.

Administrative Service Charge

This is a one-time payment for all the paperwork and documentation involved when setting up a business in Mainland Abu Dhabi. The above-listed charges are mostly included in the DED fees.

External approval for business setup in Mainland Abu Dhabi

Aside from the mandatory approval from the DED offices in Abu Dhabi and Dubai, businesses need acknowledgment from other offices such as transportation, legal, telecommunication, engineering, oil-related services, veterinary, and architectural.

When all licenses and approval are met, the next step is getting a resident visa card to bring you close to your business.

Immigration Establishments card

The immigration service opens a file for the registered company and issues a card to the owner or manager of the business. This card is crucial, or else the company cannot recruit workers or seek resident visas for them. The card must be renewed on an annual basis, or huge penalties are imposed on the user.

The Labor Establishment Card

After the immigration card is handed out, the labor card is the next most valuable card. This card is crucial as the company cannot recruit workers, or seek resident visas for them. The card must be renewed on an annual basis to avoid paying huge fines. The card acknowledges your company/business as an entity under the Ministry of Labor and gives you the power to hire, get work permits, and seek a visa on behalf of your workers.

The E-Signature Card

This is a replacement of the former Signature Authorization Card Scheme that required the signature of the company or business owner for each transaction with the Ministry. However, after reviewing this scheme, the E-signature is a card with a number code for transacting with Ministry handed to the business owner.

Conclusion

In conclusion, the cost of setting a business in Abu Dhabi ranges from DH25, 000 to DH60, 000, and as mentioned, it depends on many factors from the business choice to the location of the business.

Are you planning to set up business in Abu Dhabi, let out in-house professionals help you through the process from start to finish. This is to avoid paying twice or falling victim to unsuitable individuals.

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