The business ecosystem in Abu Dhabi, the capital city of the United Arab Emirates (UAE), is diverse and robust. Entrepreneurs and investors from around the globe find the Emirate to be an attractive destination due to its strategic location, modern infrastructure, and supportive regulatory framework. However, navigating the intricacies of setting up a business in a foreign jurisdiction can be daunting, and it starts with understanding the types of companies one can establish.
Main Categories of Companies
In general, companies in Abu Dhabi can be divided into three main categories:
- Mainland Companies
- Free Zone Companies
- Offshore Companies
Mainland Companies
Sole Proprietorship
- Ownership: Owned by a single individual.
- Liability: Unlimited liability.
- Sponsorship: Requires a UAE national as a local service agent.
Civil Company
- Ownership: Can be fully owned by foreign nationals.
- Activities: Professional and consulting services.
- Liability: Partners are liable to the extent of their share.
Limited Liability Company (LLC)
- Ownership: Up to 49% can be owned by foreign nationals.
- Liability: Limited to the extent of the share capital.
- Sponsorship: Requires a UAE national as a majority shareholder (51%).
Public Joint Stock Company (PJSC)
- Ownership: Open for public investment.
- Liability: Limited to share capital.
- Listing: Can be listed on the Abu Dhabi Securities Exchange (ADX).
Private Joint Stock Company
- Ownership: Shares are not available to the public.
- Liability: Limited to share capital.
- Minimum Capital: AED 5 million.
Free Zone Companies
Free Zone Establishment (FZE)
- Ownership: 100% foreign ownership allowed.
- Activities: Determined by the free zone authority.
- Liability: Limited to the extent of share capital.
Free Zone Company (FZC)
- Ownership: 2-5 shareholders allowed.
- Activities: Determined by the free zone authority.
- Liability: Limited to the extent of share capital.
Branch Office
- Ownership: 100% ownership by parent company.
- Activities: Must be similar to the parent company.
- Liability: Full liability assumed by the parent company.
Offshore Companies
International Business Company (IBC)
- Ownership: 100% foreign ownership allowed.
- Activities: Cannot conduct business within UAE.
- Liability: Limited to the extent of share capital.
Branch Office
- Ownership: 100% ownership by parent company.
- Activities: Must be similar to the parent company.
- Liability: Full liability assumed by the parent company.
Regulatory Authorities
- Department of Economic Development (DED): Regulates mainland companies.
- Free Zone Authorities: Regulate free zone companies.
- Regulatory authorities of respective offshore jurisdictions: Govern offshore companies.