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Starting a Business

The How-To: Setting Up A Business In Abu Dhabi

The How-To: Setting Up A Business In Abu Dhabi
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You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

A couple of weeks ago, my mother asked me to speak to one of her friends, a budding Emirati entrepreneur who wanted to start her art business, and provide her with some guidance on business registration.  We met over coffee, and she was overwhelmed with the many questions that fresh entrepreneurs often deal with: she didn’t know whether she should register for a trade license through Abu Dhabi’s free zones, or through Abu Dhabi’s Department of Economic Development. She did not know whether she was obligated to rent an office space, or if there was an option where she could start without one? Her mind was in a whirlwind, and she felt that the process was extremely hard and time-consuming.

I don’t blame her. I remember that when I wanted to apply for a trade license, I had no idea where to go. I didn’t know if an office space was mandatory to obtain a license- in fact, I thought it was pointless in my case as a branding and marketing consultant, especially when we live in an over-connected digital world where everything can be done online. It was so confusing, and I know that this is one of the issues that is holding back many budding entrepreneurs in Abu Dhabi. On the bright side, when I finally decided where to register my business, I was up and running in less than two weeks, and with costs that didn’t break my bank account.

That’s the beauty about starting a business in the UAE, and especially in Abu Dhabi. The World Bank also ranked the UAE first among Arab countries for ease of doing business for the third year in a row in 2015. Many entrepreneurs may not necessarily associate Abu Dhabi as a growing entrepreneurial hub, but rest assured that it is. The figures say it all: the total number of business licenses registered in Abu Dhabi at the end of quarter one of last year was 108,016, with 66,023 licenses in Abu Dhabi, 30,715 in Al Ain, and 11,278 in the Western Region.

Last year, a digital designer acquaintance of mine came to my office and asked me where he could register for a trade license in Abu Dhabi. “It’s my dream, Manar,” he said to me. “I want to be managing a leading Emirati digital design agency. It would be just my friend and I for now, and we have about AED150,000 to kick-start our business. Is that enough?” I looked at him confused, and then asked him if he needed an office space to start his business. He replied no. I then asked if he would be hiring people in the first year of his enterprise. Again, his reply was no. That’s when I smiled and told him that he would then not need that much money to start his enterprise. In fact, he could apply for an entrepreneurship scheme through one of the free zones in Abu Dhabi for a fraction of his estimated price. He spent about AED20,000 (or less) to fully register his business, and he was surprised at the ease of the process.

So, if you live in the capital and have a burning urge to start your own business, you can kick it off by starting off with these three things: network, look at the funding options available, and finally, register your venture.

First things first, network, and discuss your business idea with people who are within the same field, or have experience in managing a business in Abu Dhabi. Look for a mentor. Approach people you admire, and now you could do that easily through social media. Ask if you could meet them and discuss your business idea. People approach me all the time through social media asking me about advice, and it is absolutely fine. Attend different business networking events in the capital and talk about the challenges that people have faced, what opportunities does the market need, etc. Tamakkan in Abu Dhabi organizes monthly seminars free of charge for people to attend and hear established entrepreneurs speak about their experiences, and meet other similar-minded people as well. Other organizations such as the International Businesswomen Group (IBWG) also organize networking and talk events for women in Abu Dhabi for every month; you do not need to be a member to attend these either. Other networking events registered on meetup.com include Abu Dhabi Freelancers and Entrepreneurships group, Abu Dhabi Startup, SME and Entrepreneur group, and Business Ladies in Abu Dhabi, all of which organize different networking events around the capital. You need to register at the website to keep up-to-date with their meeting agendas.

Secondly, if you would need some funding, then there are a number of options available that could help you start your business and ease the burden of expenses. If you are an Emirati, then you could apply for a fund through Khalifa Fund for Enterprise Development. It provides a seven-year interest-free loan, training, and advisory. HSBC UAE SME Fund, launched in 2010 also provides different kind of funding options for entrepreneurs in the UAE. Wamda Capital Fund invests in early stage startups in the MENA region investing in both tech and non-tech-focused startups. A lot of people also apply for funds through different crowdfunding websites and receive funds from individuals who believe in their business, and who may want an equity stake in the business as a return. Last but not least Intel Capital, Intel’s global investment arm, makes equity investments in technology startups.

Now we get to the fun (and most important) part, registering your business and applying for a trade license. What are the options available in Abu Dhabi? And what could work best for you? The licensing requirements change according to the type of business you are opening and where you are opening it. Most startups look to obtain a Limited Liability Company (LLC) license. A business registered in the Free Zone will have different rules for operating than one operating mainland. If you are an Emirati woman and do not require an office space to start, then you could apply for the Mubdia program, launched in 2005 by Abu Dhabi Chamber of Commerce and Industry. Free zones such as twofour54, Masdar City and Abu Dhabi Airport Free Zone also offer great options to register your business with options such as renting a flexi-desk, instead of an office to start with. If your business is within the hospitality sector, then you should approach Abu Dhabi Tourism Authority for that. Lastly, there is the Department of Economic Development (DED), which you could approach to obtain different types of licenses such as: Commercial License, Occupational License, and Professional License. Information about registration and documents required could be found on Abu Dhabi e-government page under the business section.

It is completely normal to be overwhelmed in the beginning. Do not be freaked out about it. Starting a business is great. What I would recommend the most is for you to discuss your business idea as much as possible before launching it. People’s feedback could serve as an eye-opener for you and could help you avoid any upcoming hurdles that may arise. Always keep in mind that there is no harm in asking. In fact, the number of people who would like to guide you in the process could surprise you.