As the largest and the richest of the seven Emirates, anyone looking to set up a business in the Middle East could well be advised to take a good close look at Abu Dhabi. With a GDP that has consistently shown annual growth of around 2% a year, it’s also trying to reduce its reliance on oil revenue. One area that is being particularly encouraged by the Hub71 initiative is tech, as it strives to be a modern, connected state. As a result, large amounts of start-up funding have been made available for businesses of the right kind.
While there is generally a very welcoming and open approach to new businesses in the Emirate, there are certainly other considerations to be taken into account before making the move, with the following being three examples.
Renting business premises
All businesses in Abu Dhabi need an official license to operate, and to obtain one of these you need a business address. But, paradoxically, you need to have a license to operate before you can sign a lease for any premises. If this sounds like a somewhat intractable problem, don’t worry. As an interim measure, you can register your company as an incorporation which, in turn, allows you to obtain a piece of documentation called a Tawtheeq. This includes all the information needed by the landlord to complete your lease and, in many cases, you’ll find that they will help with the process in order to speed up the rental.
Next on the list of necessities will be somewhere to live. Fortunately, there’s no shortage of rental accommodation in Abu Dhabi, and the best way to find a suitable home is through scouring a site like Bayut’s. Obviously, the rent you’ll pay will depend on the area you choose to live in but, as an average, it will cost around $27,000 a year for a two-bedroom apartment. If you head for a more exclusive area, like El Raha Beach or Corniche, you can expect to pay considerably more. In terms of the formalities, there’s generally a 5% deposit to pay and you’ll need copies of your passport, UAE residency, and Emirates ID to complete the paperwork.
In the past, there was a regulation in place that stated that any new businesses needed to start with at least AED 150,000 ($41,000) capital in the bank, but this requirement was dropped in 2009. However, there is still an unofficial expectation that you should have a certain amount of cash reserves.
One essential is that you have an Emirati business partner, or partners, who own a minimum of 51% of the business. This is a purely administrative arrangement, though. It certainly doesn’t mean that you have to part with an equivalent proportion of the profits, as you are free to negotiate more favorable terms.
Naturally, there are many other considerations to take into account when setting up business in Abu Dhabi, but there’s also no shortage of help available. So why not give it some serious consideration if you’re currently planning to expand?