Abu Dhabi has emerged as a thriving hub for new business opportunities over the past decade. Some key advantages of starting a business in the emirate include:
Economic Incentives
- Low or no taxes on personal and corporate income. Businesses also enjoy 100% foreign ownership.
- Access to government subsidies, sponsorship programs, and SME funding initiatives.
- High GDP per capita means more consumer purchasing power.
Infrastructure
- World-class roads, airports, ports, hotels and amenities provide an excellent base for businesses.
- Abu Dhabi is investing billions into new mega projects such as museums, theaters, sports venues and commercial areas.
Global Access
- Strategic geographic location between Europe and Asia allows trade with global markets.
- Well-developed transport and communications network connects Abu Dhabi to international destinations.
Workforce
- Growing international workforce brings diversity of skills, ideas and culture.
- Ambitious workforce keen to develop their skills and experience.
Government Support
- Economic Vision 2030 focuses on supporting private sector growth through regulatory reforms making it easier to do business.
- Government actively promotes innovation and entrepreneurship through agencies such as Hub71 and Krypto Labs.
Quality of Life
- Safe, family-friendly environment with quality schools, healthcare, infrastructure and recreational options.
- Low cost of living compared to other major global cities.
- Easy to open bank accounts and access business services. Cashless payment options are prevalent.
Abu Dhabi also offers industry-specific advantages:
Technology Startups
- Hub71 technology park and accelerator programs aimed at tech entrepreneurs.
- Growing demand for digital solutions from government, corporates and consumers.
Financial Services
- Abu Dhabi Global Market (ADGM) free zone specifically for financial services firms.
- Stock market trading hours that cover Asia, Europe and North America sessions.
Media and Entertainment
- Twofour54 provides production facilities, training, and support for media businesses.
- Demand for Arabic content as well as international film productions.
Renewable Energy
- Government renewable energy projects worth billions aimed at economic diversification.
- Masdar City focused on sustainability, research and technology commercialization.
In summary, Abu Dhabi provides an appealing environment for ambitious entrepreneurs and investors looking for opportunities in the Middle East. From incentives and infrastructure to global connectivity and lifestyle benefits, Abu Dhabi ticks many of the boxes as an optimal place to start and grow a business.
Setting up a Business in Abu Dhabi
If you do decide Abu Dhabi offers the right conditions for your business idea, what are the steps to getting started? Here is an overview of the key processes:
Choose a location
Main options are:
- Mainland (anywhere in Abu Dhabi excluding special economic zones)
- Free zones (ADGM, TwoFour54) offer 100% foreign ownership
- Industrial areas (ICAD, Kizad)
Select a business structure
Common options:
- Sole Proprietorship
- Limited Liability Company (LLC)
- Branch of a Foreign, UAE or GCC-owned Company
- Representative Office
LLCs allow 51-100% foreign ownership on the mainland if you have an Emirati partner. Freezones permit 100% foreign ownership.
Get licenses
Main licenses/approvals required:
- Business activity approval
- Trade license
- Immigration card (residence visa)
- Lease agreement
- Other activity-specific permits
Freezones have streamlined license application processes. Outside freezones obtaining licenses can take more time.
Find business premises
- Desks in shared workspaces allow cost-effective set up
- Flexible lease terms even for small spaces
- Rental prices vary greatly depending on location and building grade
Open a bank account
To open a business account you’ll need:
- Passport
- Visa
- License
- NoC from sponsor (if applicable)
- Proof of address
Hire staff
Options for recruiting:
- Online job boards
- Recruitment agencies
- Social media
- Networking events
Make sure to fulfill visa, insurance and UAE Labour Law requirements. Freezone companies can hire staff more flexibly.
By following these key steps, you can establish the foundations for starting operations in Abu Dhabi. Reach out to legal, immigration and accounting professionals for expert assistance navigating setup processes.
Support Systems for New Businesses
While starting a business anywhere involves procedures and paperwork, Abu Dhabi actively tries to nurture new ventures through various government bodies and private sector initiatives.
Here are some useful resources:
Twofour54
Media zone in Abu Dhabi providing production facilities, training programs and support aimed specifically at media, entertainment and tech companies. Packages tailored for entrepreneurs.
Khalifa Innovation Center
Provides training, events, co-working space and expert mentors for Emirati-owned startups across industries as well as social enterprises.
Hub71
Tech ecosystem housed in a Abu Dhabi skyscraper, Hub71 connects startups with corporate partners, universities, accelerators and investors. Companies can access subsidies and incentives.
Krypto Labs
Incubator with locations in Abu Dhabi Global Market and Masdar focused on developing innovative blockchain-based enterprises. Offers entrepreneur visa scheme.
Department of Economic Development (ADDED)
Government agency responsible for issuing trade licenses as well as providing useful guides, resources and linkages for investors and business owners.
Abu Dhabi Investment Office (ADIO)
Helps international companies expand in Abu Dhabi through services such as real estate finding, talent sourcing and facilitation of government transactions.
Abu Dhabi Chamber of Commerce and Industry
Advocates on behalf of private sector businesses while also offering useful trainings, events, market insight reports and arbitration services for members.
Grants and assistance programs
Beyond support programs, Abu Dhabi authorities also offer direct funding and incentive schemes:
The Mohammed Bin Rashid Innovation Fund
Provides early stage funding through innovation labs and accelerators as well as directly investing in pioneering companies.
ADIO Innovation Programme
Up to $272 million in incentives for companies in target sectors that want to expand innovative activities in Abu Dhabi.
Hub71 Incentive Programme
Package worth over $275k for qualifying tech startups including subsidized housing, health insurance and office space.
The Khalifa Fund for Enterprise Development
Offers various packages covering training, consultancy services and potentially funding to Emirati-owned SMEs and startups.
ADGM Innovation Testing Licence Package
Fast-track license, subsidies and mentorship scheme aimed at financial technology innovators wanting to develop and test ideas.
Through combinations of incubation services, co-working spaces, mentorship opportunities and funding these initiatives aim to support entrepreneurs translate ideas into profitable business ventures.
Success Stories
Abu Dhabi already serves as a base for numerous ambitious startups across industries as well as regional offices for leading international companies. A few homegrown examples include:
Ekar
UAE-born car sharing app now with operations also in Saudi offering convenient short term car rentals. Received $17.5 million Series B funding in recent years.
Trukker
Logistics startup that has created an Uber-like platform matching truckers and cargo across UAE, Saudi and Egypt. Completed $5.7 million funding round in 2019.
Fenix
Emergency response startup with IoT products tailored to combat fire and extreme weather events. Won numerous startup competitions. Conducts R&D in Abu Dhabi.
Mohi
AI and smart technology focused startup developing autonomous inspection and cleaning solutions for industries. Graduated from incubators Hub71 and Y-Combinator.
Pure Harvest
Agritech company pioneering sustainable and innovative fresh food production techniques locally. Attracted $30.25 million in a 2021 funding round.
The startup ecosystem in Abu Dhabi will likely expand further in coming years as initiatives like Hub71, government support programs and a growing pool of angel investors attract more innovators and investment.
Key Takeaways
Advantages
- Strong government support for private enterprise
- Comprehensive economic incentives
- World-class infrastructure
- Strategic global position
- Lifestyle appeal
Challenges
- New businesses may struggle with bureaucracy
- Need for local partners outside freezones
- Gaps in access to startup funding
Opportunities
- Government procurement contracts
- Demand for innovative solutions matching economic priorities
- Testing ground for scalable enterprises across Middle East
Abu Dhabi provides appealing conditions for entrepreneurs looking to set up or expand an enterprise serving regional if not global markets. With targeted support initiatives facilitating access to funding, talent and infrastructure many types of ventures stand to thrive in the emirate.
Conclusion
Abu Dhabi holds many advantages as a hub to launch and grow innovative businesses from strategic geographic location to quality infrastructure and government incentives aimed at diversifying the economy.
Budding founders can tap into incubation schemes, innovation labs, co-working spaces and accelerator programs while also targeting grant funding and direct investment opportunities from public and private sources.
If taking advantage of resources such as twofour54 and Hub71, the process of obtaining trade licenses, visas and kicking off operations can be smoother for entrepreneurs new to the region. As the emirate continues executing on ambitious economic plans, priority sectors like technology, renewable energy, media and entertainment could present ripe targets.
Although bureaucracy may persist in some areas, various government bodies demonstrate a willingness to engage with entrepreneurs, understand obstacles to doing business and undertake reforms.
For the ambitious founder with a sound business plan, Abu Dhabi could offer a compelling environment to establish a strong base in the Middle East region with room to scale across global markets in coming years. The successes of early stage startups securing millions in investments points to the potentials.
Frequently Asked Questions
- What are the benefits of starting a business in Abu Dhabi?
Key advantages include government incentives like subsidies, sponsorship and funding schemes, world-class infrastructure, a growing international workforce and consumer market, ease of accessing global suppliers and customers, strong Intellectual Property protections and a high quality of living standard. - What kind of business is best suited to start in Abu Dhabi?
Technology startups, financial services, renewable energy enterprises and creative media ventures stand to benefit most from targeted government support programs in Abu Dhabi. - What should I know before registering a company in Abu Dhabi?
You should understand what location, license types and business structure model best suits your objectives in terms of ownership allowance, ease of setup, capital requirements and visa quotas. Free zones simplify the business setup process greatly. - How easy is it for foreigners to start a business in Abu Dhabi?
Free zones like ADGM allow 100% foreign ownership while mainland LLCs require 51% Emirati ownership. Overall the ease for foreigners depends mainly on type of activity, business goals and target customers but government aims to attract foreign investors. - What are the steps to setting up my business in Abu Dhabi?
Main steps are choosing a location; selecting a legal business structure; obtaining trade licenses, visa and premises approvals; opening a bank account; hiring staff; registering for taxes. Freezone company formation is more streamlined. - What support programs help new startups in Abu Dhabi?
Key programs are twofours54 for media ventures, Hub71 for tech startups, Khalifa Innovation Center for Emirati ventures, Krypto Labs for crypto/blockchain, ADDED SME support services as well as multiple venture capital, crowdfunding and accelerator options. - What funding or grants are available for Abu Dhabi startups?
Notable options are the Mohammed Bin Rashid Innovation Fund, ADIO Innovation Programme, Hub71 Incentives, The Khalifa Fund, ADGM’s Fintech Abu Dhabi Innovation Testing Licence and government procurement contracts earmarked for SMEs. - How much does it cost to start a business in Abu Dhabi?
Costs vary greatly depending on business activity, location, size of premises, staffing levels etc but freezone setup allows low office rentals and more flexibility on recruiting. Expect professional, license and visa fees. - Is finance available for new Abu Dhabi businesses?
Government grants support Emirati-owned SMEs while freezones facilitate bank loans. Venture capital funding is growing via firms like Mubadala. Crowdfunding platforms also help startups raise capital and banks offer small business accounts/loans. - How much tax do Abu Dhabi businesses pay?
No corporate tax or personal income tax except for oil companies and foreign banks. Exceptions are municipality fees, social security, payroll tax for employees and VAT on goods/services. Full foreign ownership allowed. - What are the visa options for entrepreneurs relocating to launch an Abu Dhabi business?
Options include investor/partner visas linked to mainland LLC ownership, entrepreneur visas in freezones, the ADIO Green Visa for professionals establishing businesses and the Thrive visa for freelancers, entrepreneurs and investors. - Is there affordable co-working space available in Abu Dhabi?
Yes, co-working spaces are growing in popularity across Abu Dhabi with glancing views of landmarks in some cases. Prices vary but are overall competitive internationally. Options allow networking events, business services and community elements. - What support is offered for developing an innovative product in Abu Dhabi?
Incubators like Hub71 and Krypto Labs fuse funding, coaching and facilities to help startups develop tech solutions in Abu Dhabi. Government innovation testbeds also assist prototypes while IP protection incentives are available. - Can I import goods easily for my Abu Dhabi business?
Yes. With advanced transport links to sea, air and land ports Abu Dhabi facilitates global trade. Freezones in particular were developed to allow smooth customs clearance and tax-free foreign company operation. - How easy is it to hire foreign workers as an Abu Dhabi SME?
Outside freezones hiring expat staff under sponsorship can be challenging for smaller companies but freezone entities enjoy more flexibility for recruiting, even freelancers remotely, using online talent platforms. Options expanding for hiring freelancers in mainland under new visa rules. - Does Abu Dhabi have strict local ownership laws?
Outside designated free trade zones, mainland LLC companies require 51% Emirati ownership. Foreign investors can also opt to take minority stakes through agent/sponsor models. Alternatively can establish a local franchise model. - Can I have multiple business activities under one trade license in Abu Dhabi?
Historically ability to combine certain activities such as trading and services/consultancy has been restricted but as part of easing doing business Abu Dhabi combined several license types in 2018. More activity convergence and freezone efficiencies likely. - What technology resources help startups in Abu Dhabi?
Abu Dhabi has several government-backed technology development programs such as Hub71’s Incentive Programme providing subsidized AWS cloud credits. Twofour54 offers tech support while initiatives like Ghadan 21 accelerate adoption of AI, blockchain and other tools locally.
