Establishing a business
in Abu Dhabi
The economy of Abu Dhabi is largely based upon
the revenue generated from petroleum and natural
gas. Some other sectors are also emerging in order to
support the Emirate’s economy in keeping with the
strategic plan for development of the Emirate.
Business Guide
Under article 5 of the Commercial Companies Law,
there are seven different types of companies, which
may be established, namely:
1.
2.
3.
4.
5.
6.
7.
General Partnership
Simple Limited Partnerships
Partnerships Limited with Shares
Public Joint Stock Companies
Private Joint Stock Companies
Limited Liability Companies
Joint Participation (ventures)
A table showing the requirements for the various
forms of enterprises is given separately on page 32.
Other forms – Joint ventures, branches of foreign
companies, representative offices, and other forms
of business entities have different rules, capital
requirements and procedures.
Joint Venture Companies
A joint venture is a contractual agreement (which
may be oral or written) whereby the losses of the
entity are shared by two or more partners. The local
equity participation in the joint venture must be at
least 51 percent but the profit and loss distribution
30
can be prescribed. Specific projects which involve
working together for a fixed period are suitable for
joint ventures.
There are no registration formalities for a joint
venture as it is not a distinct legal entity. The business
name and licence of the partner conducting the
business are used by the company. A memorandum of
association can be prepared to indicate the rights and
liabilities of the partners and method of profits and
losses.
Branches and representative offices
of foreign companies
A branch of a foreign company can be formed as
per the regulations of the Commercial Companies
Law. The main requirement is to appoint a local
service agent who should be a local national or the
company should be 100% owned by local national.
The representative office of the parent company may
practice only promotional business for the products
and services dealt with by the parent company and
cannot market directly its products or conduct its
business operations. A branch of a foreign company’s
activities will be as per the license obtained from
Ministry of Economy and inscribed in the Ministry’s
Register of Foreign Companies and the concerned
authority from the respective Emirate.