FAQs on Company Formation in Abu Dhabi and ADNOC Registrations

FAQs on Company Formation in Abu Dhabi and ADNOC Registrations
by Aswani

FAQs on Company Formation in Abu Dhabi and ADNOC Registrations

  1. What is the biggest advantage of setting up a company in Abu Dhabi?
    Abu Dhabi, in its quest to be one of the leading business-friendly destinations, has introduced many incentives and programs in recent years for new company setups, namely:

    • Tajer license wherein you can start a company without office space for the first 2 years
    • Reduced license costs and license validity for 2 years
    • No minimum share capital requirement, 100% repatriation of profits, and many more.
  2. Can a Non-resident open a company in Abu Dhabi onshore?
      In Abu Dhabi onshore, an investor seeking to open a company in Abu Dhabi onshore must take residency in UAE once his/her company is established.
  3. As an Investor, can I have 100% ownership of my company?
      In the UAE, there are two areas where an Investor can open company – Mainland and Freezones. Freezones are special economic zones wherein you can have 100% ownership of your company. In Mainland, you can get 100% ownership only for certain professional activities or if there is a minimum investment of business, which is minimum AED 5 million, but these are considered by licensing authorities on a case-to-case basis.
  4. What are the basic requirements as a Foreign investor to open a company in Abu Dhabi mainland?
      For Abu Dhabi mainland, firstly you would need to tie with a UAE local sponsor for your company setup. This sponsor would act as a 51% partner in the company. Such a setup would enable your company to take the legal form of ‘Limited Liability Company’.
      Company Legal agreement – Memorandum of Association would have to be drafted and notarized in the Abu Dhabi notary office.
      This would be followed by the selection and purchase of office space of a minimum of 14-15 sqm in Abu Dhabi, finally leading to the issuance of the company license.
  5. Is there a minimum share capital requirement in Abu Dhabi for companies in the mainland and free zones?
      No minimum share Capital has been prescribed by licensing authority in the mainland – Abu Dhabi Department of Economic Development. Share capital requirement for company set up in free zones of Abu Dhabi would vary from free-zone to free-zone.
  6. How many days does it take to incorporate a company in Abu Dhabi mainland and free zones?
      Ideally, it will take 1 to 2 weeks for the company to be set up in Mainland and between 2 to 6 weeks for free zone company setup. This is subject to approvals from concerned authorities.
  7. As a Freezone company, can business be done freely in the mainland across UAE?
      Having a company set up in a UAE free zone usually comes with its restrictions in terms of providing Products or Services across UAE.
      However, Abu Dhabi’s free zones have now rolled out an additional Dual license facility, that enables the free zone company to do business freely across UAE.
  8. When can I open the bank account for the Company?
      A corporate bank account can be opened after issuance of Company license and after the Company’s Power of Attorney holder has taken residence in UAE.
  9. For my company in Abu Dhabi to be registered as a Vendor to ADNOC and its subsidiaries, what are the requirements that the company must meet?
      Every company seeking to be registered as a Vendor to ADNOC and its subsidiaries must primarily acquire approval of the Supreme Petroleum Council (SPC).SPC is the governing body that regulates the policies pertaining to the Oil & Gas sector in UAE.
      The main criteria for SPC to provide its approval are that the license should be issued from Abu Dhabi and the company’s local sponsor/partner must be from Abu Dhabi.
      SPC would not provide its approval to Branch offices in Abu Dhabi where the parent company’s license is issued from the other Emirates of UAE. One must also note that prior field experience of the Company seeking registration is of utmost importance to ADNOC.
  10. What are the types of companies that can be registered with ADNOC?
    • Vendor / Trader / Distributor companies – with a license issued from Abu Dhabi
    • Local Manufacturers – with a license issued from anywhere in Abu Dhabi Contractors – with a license issued from Abu Dhabi
    • Overseas Manufacturers – Foreign manufacturers can be registered via Abu Dhabi based Vendors
    • Contractors not from Abu Dhabi can also be registered to ADNOC as Associate to Abu Dhabi based Contractors