Abu Dhabi Trade License

The capital city and the largest emirate in the country, Abu Dhabi is the UAE’s key business and industrial center specializing in trade and import/export operations, especially when it comes to oil. This emirate’s significance cannot be overestimated, as its economy contributes to roughly 70% of the entire country’s GDP. At the same time, Abu Dhabi is very business and investor-friendly, maintaining the status of one of the most affordable places to open a business in the UAE.

Acquiring a trade license in Abu Dhabi, like in other parts of the UAE, is an essential step for starting and operating a business legally. Here we will explain what a trading license is, why you need one, and how you can get it.

Trade License Options in Abu Dhabi

A trade license, also known as a commercial license, permits you to engage in various commercial activities within Abu Dhabi, which is otherwise illegal. You can establish a company in the mainland part of Abu Dhabi or in one of the emirate’s free economic zones, such as Khalifa Industrial Zone Abu Dhabi (KIZAD), Masdar City Free Zone, Abu Dhabi Global Market (ADGM), Abu Dhabi Airport Free Zone (ADAFZ), or others. In both cases, obtaining a trade license is vital to starting your operations.

It should be noted that depending on the chosen jurisdiction, certain aspects of the license itself and the process of securing one will differ. For example, in free zones, a trade license is issued by the free zone’s authorities that often offer setup package deals, which include licenses together with office space and company registration options. In the mainland, on the other hand, the authority body responsible for business licenses is the Abu Dhabi branch of the Department of Economic Development (ADDED), and trade licenses come in three different types: the Tajer Abu Dhabi License, the Instant Trade license, and the Normal Business License. Let’s break down what each of them stands for.

Tajer Abu Dhabi License

Tajer Abu Dhabi is an initiative for business formation launched by the Department of Economic Development in Abu Dhabi in 2017 to make it easier for small business owners and individual entrepreneurs to establish and operate businesses in the emirate. Previously known as the Abu Dhabi Trader license, it is designed to simplify the licensing process and reduce the cost and administrative burden associated with starting a business in Abu Dhabi. Here are the key details about the Tajer Abu Dhabi License.

Eligibility:

Tajer Abu Dhabi is primarily aimed at individual entrepreneurs, freelancers, and small business owners. To be eligible for a Tajer Abu Dhabi License, you typically need to meet certain criteria, which may include:

• Being a UAE national or resident.
• Not being a government employee.
• Not having a commercial license already issued in Abu Dhabi.

Key Features:

• Low Cost. Tajer Abu Dhabi offers a cost-effective licensing solution, reducing the financial burden on entrepreneurs.
• Simplified Process. The licensing process is streamlined and simplified, making it easier and faster to start a business and limiting the required time to 2 or 3 workdays.
• Variety of Business Activities. The list of activities available under this license type includes over 2,500 of them.
• 100% Ownership. Tajer Abu Dhabi allows full ownership of the business by the entrepreneur, eliminating the need for a local sponsor or partner.
• No NOC. This license type does not require a no-objection certificate (NOC) from the company’s current visa sponsor.
• Visa Quota. The Tajer Abu Dhabi License comes with visa eligibility for three employees.
• Legal Entity Requirements. As opposed to UAE nationals, the legal entity option permitted for foreign UAE residents trying to start a business under the Tajer Abu Dhabi License is a Limited Liability company (LLC).
• Home-Based Businesses. Entrepreneurs can operate their businesses from their homes or designated locations, reducing the need for physical office space.
• Digital Platform. Much of the application process and business management can be conducted through a user-friendly digital platform.

Instant Trade license

Abu Dhabi introduced the concept of an "Instant License" to streamline the business setup process and make it quicker and more efficient for certain types of businesses. The Instant Trade License is designed to allow entrepreneurs to start their businesses immediately, reducing the time and paperwork typically associated with business setup. Here are the key points to know about obtaining an Instant Trade License in Abu Dhabi:

Eligibility:

Instant Trade Licenses are typically available for specific business activities and structures, such as sole proprietorships and partnerships. The eligibility criteria may vary, so it's essential to check with the ADDED for the most current information. However, this license type can be applied for by UAE nationals, residents, and even visitors, making it accessible to basically anyone.

Key Features:

• Quick Setup. The primary advantage of an Instant License is that it allows for a much quicker setup compared to traditional business licenses. This license can be received within a single day.
• Reduced Documentation. The process involves minimal paperwork, reducing the company owners’ administrative load.
• Variety of Business Activities. Over 2,500 business activities are available.
• No NOC. Similar to the Tajer Abu Dhabi License, an Instant License does require an NOC.
• Visa Quota. The Instant Trade License allows for three employee visas.
• Digital Platform. Much of the application process and documentation submission can be done online, making it more convenient.

Normal Business License

To obtain a regular or normal trade license in Abu Dhabi, you'll need to follow a standard process as outlined by the ADDED. This process typically applies to various types of businesses, including sole proprietorships, limited liability companies, partnerships, and branches of foreign companies.

Eligibility:

Similar to the Instant Trade License, a normal business license in Abu Dhabi is available for everyone, including non-nationals.

Key Features:

• Legal Entity Requirements. Non-UAE nationals can choose between an LLC and a sole proprietorship in terms of company formation options.
• Visa Quota. A normal business license implies no employee visa limitations, so your potential workforce is basically limited by your needs and office size.
• Office Requirements. Certain business models will require you to have an office or commercial space. For example, this is a mandatory condition for those willing to obtain a General Trading license.

It is important to know that in Abu Dhabi, certain aspects of company formation require services of a Public Relation Officer (PRO). Such aspects include trade licenses, employee visas, and labor permits that need to be settled with the relevant authority bodies.

Paperwork requirements for trade licenses in Abu Dhabi

To apply for a Trade License in Abu Dhabi, you need to gather and prepare the necessary documentation, which typically includes:

• Passport copies of partners or shareholders.
• Residency visa copies.
• Emirate IDs
• No Objection Certificate (NOC) from the local sponsor or partner (if applicable).
• Memorandum of Association (MOA) for LLC structures.
• Trade name reservation certificate.
• Lease agreement for the office space.
• Any additional documents requested by the ADDED.

Abu Dhabi’s free zones may have their own paperwork requirements specific to the particular free zone, your selected business activities, the company’s legal structure, and other factors. For example, you may be required to provide your CV, business plan, and a bank reference or statement. As the list of required documents may vary based on a number of factors, seeking professional advice from a local business expert is highly recommended.

Abu Dhabi Trade License Costs

The cost of a Trade License in Abu Dhabi can vary widely depending on several factors and specific requirements of your business. For mainland companies in Abu Dhabi, the average cost of a trade license is AED 20,000. As for the emirate’s free zones, the data available is quite limited, as free zone authorities typically disclose such information either in newsletters to registered company owners and trusted sources or in letters upon request. However, for example, Khalifa Industrial Zone Abu Dhabi (KIZAD), which is known as one of the most affordable free zones in the UAE, offers customizable packages with trade license costs starting from 11,000 AED and eligibility for 1 resident visa.

As for other fees associated with obtaining and renewing a trade license, they are mostly tied to the business setup process as a whole and are subject to change, so it's essential to check with the corresponding authorities for the relevant information. The list of such fees includes:

• Trade name reservation fee
• License application fee
• License issuance fee
• Commercial activity fees
• Local sponsorship fee (if applicable)
• Office space rental
• Renewal fees
• Visa fees (if applicable)
• Additional fees (safety inspections, environmental permits, and other regulatory compliance requirements)
• Third-party fees (legal advice, notary charges, etc)

Trade License Acquisition Process in Abu Dhabi

Here are the key steps to obtain a Trade License in Abu Dhabi.

1. First, decide on the specific business activities you intend to conduct under your Trade License, as the license type will depend on the nature of your business.
2. Choose the legal entity for your business, such as a sole proprietorship, LLC, partnership, or company branch. The legal structure you select will impact ownership, liability, and other aspects of your business.
3. Select a unique and appropriate name for your business. Ensure that the proposed name complies with naming conventions and does not infringe on any existing trademarks.
4. Depending on your business structure and activities, you may need a local sponsor or partner who is a UAE national or a UAE-based company. The local sponsor's involvement and share in the business will vary based on the structure.
5. Secure a physical office or commercial space for your business that meets the requirements set by the ADDED, as you will need to provide a lease agreement during the licensing process.
6. Prepare the paperwork necessary for the application.
7. Complete the license application form and submit it to the ADDED. Ensure that all required documents are attached to the application.
8. Pay the relevant charges, trade name registration fees, and any other government or regulatory fees as required.
9. The ADDED will review your application and documents. This process may take some time, and you may be asked for additional information or clarification.
10. Once your application is approved, the ADDED will issue your Trade License.
11. If you plan to obtain residency visas for yourself, employees, or partners, you can initiate the visa application process, which includes medical examinations and other requirements.
12. After obtaining the Trade License, ensure that your business operations comply with the ADDED regulations. Trade licenses typically need to be renewed annually.

Summary

There are different Trade License types company owners have access to in Abu Dhabi depending on the intended nature of the business, company structure, preferred time requirements, residency status, workforce size, etc. Determine the options most suitable to your needs before applying for company formation and obtaining a license. If you need help, our Emirabiz team offers expert guidance on the process of obtaining a Trade License in Abu Dhabi. Whether you are a new entrepreneur or an established business, our team of professionals will assist you with the legal paperwork and requirements, making the process as easy and seamless as possible.