ABU DHABI COMPANY FORMATION

Establishment of an Abu Dhabi Corporation

 

In the case of regulated industries, a separate license must be obtained, and in the case of industries not classified as regulated, the procedure for general incorporation and business license acquisition can be followed.

 

Abu Dhabi requires that a local permanent business establishment be in place at the time of incorporation and that a lease agreement be submitted after the business premises are leased. After incorporation, you can apply for a business visa, and you must stay in the UAE for two to three weeks when obtaining the visa.

​

​

Establishment process:

1. Submit required documents and fill out the application form.

2. Conduct KYC and suitability assessment.

3. Check local commercial license issuance and other regulatory matters.

4. After confirmation of engagement, issue an invoice and make payment.

5. Proceed with temporary business approval (takes at least 5 business days).

6. Register and incorporate the company (takes 3-4 business days).

7. Obtain a business license (takes 6-10 business days).

8. Apply for a visa and open a bank account (if necessary).

​

Estimated duration:

3-4 weeks.

 

Required documents:

1. A copy of the shareholder/director's passport

 

2. Original verification of the shareholder/director's passport

- Korean passport: English passport copy certificate (issued by the district office) ( View sample )

- Passport of another country: Certified True Copy or Notarial Certificate ( View sample )

 

3. Two types of recent (within three months) English address verification documents of the shareholder/director (addresses must be the same)

- Residence in Korea: English certified copy (resident center) + front and back scans of the license ( View sample )

- Residence in another country: Utility Bill + Bank Statement (or equivalent official document) (View Sample)

 

4. Fill out the application for incorporation

5. Lease agreement for the local office

6. Business plan

 

Capital requirement:

For businesses that are not classified as regulated, there is no minimum capital requirement.

Shareholders and officers registration requirements:

There must be at least one shareholder/director/manager, and one person can hold all positions.

​

Corporate tax rate:

The following tax rates will be applied in accordance with the revised tax law that will come into effect from June 2023.

If the taxable income is AED 375,000 or less, 0%

If the taxable income is more than AED 375,000, 9%

​

Dividend tax rate:

Dividends and capital gains are exempt from taxation if the annual participation rate is 10% or more.

​

Tax exemption requirements for UAE free zone companies:

If the requirements below are met, you are exempt from tax. ​

 

1. A permanent establishment, decision-makers and employees reside in the UAE, and business operations and major income-generating activities are carried out in the UAE.

2. Major clients are located in the UAE free zone or outside the UAE

3. Not adopting a standard corporate tax rate

4. Income is not derived from UAE residents

5. Receive an accounting audit from an external, independent auditor

6. Meet transfer pricing requirements

7. Satisfy additional requirements set by the Minister

​

Value-added tax:

5%

​

Accounting and financial reporting:

The financial year can be set freely, and the first financial year after establishment must be at least six months, and the financial year-end date must not exceed 18 months from the date of establishment.

Small companies with annual sales of less than USD13.5M must report a financial statement, and companies above that must submit an audit report.

 

Economic Substance Regulations:

To apply for tax exemption or in the following industries, you must have a permanent establishment, decision-makers and employees in the UAE, and conduct major income-generating activities.

1. Banking and related businesses

2. Insurance business

3. Financial and loan businesses

4. Fund management business

5. Selling goods or services to affiliates within the same group

6. Head office role (providing management services to affiliates, etc.)

7. Intellectual property business (buying, acquiring, and lending patents or trademarks, etc.)

8. Logistics business, crew management, and travel product sales

9. Role of the holding company (limited economic substance)

​

Opening a bank account:

You can open bank accounts at Emirates NBD, Abu Dhabi Islamic Bank, Mashreq Bank, RAK Bank, Dubai Islamic Bank, FAB, etc. However, to open an account, you must have a permanent establishment in the UAE and the signatory and owner must hold a business visa in the UAE. (If the annual revenue is more than USD 10 million and the initial deposit is more than USD 1 million, the bank can be contacted to discuss the possibility of relaxing the account opening requirements.)

​

* To open an account, all owners must have a UAE residence visa, and if there is no permanent establishment or employee in the UAE, at least one owner must submit a lease agreement for the residence (apartment) to prove that they are living in the UAE. (Affordable apartments can be rented for about AED 15,000 per year)

​

* For businesses closely related to cryptocurrency, it is difficult to open an account in the UAE.

​

* For account opening, all owners must have a UAE residence visa, and if there is no permanent establishment or employee in the UAE, at least one owner must submit a lease agreement for the residence (apartment) to prove that they are living in the UAE. (Affordable apartments can be rented for about AED 15,000 per year)

​

[Cost Information]

* The costs presented below are estimated costs for general industries, and a final quote may be provided after confirming the details of the business.

 

* In the UAE, business activities are only possible after obtaining a commercial license, and the government fee is not presented as a fixed standard cost as it varies depending on the industry or business activity.

​

Expected costs at the time of establishment:

1. Business application: $300

2. Company name reservation: $200

3. Company registration application: $1,500

4. Commercial license issuance: $4,000

5. Business activity license: $4,000

6. Information protection registration: $300

7. Mailbox: $250

8. Company establishment and license-related consulting fees: $9,500

9. Bank account opening (Dubai): $2,500

Total: $22,550

VAT 5%: $1,127. 5

Total including VAT: $23,677.50

​

Annual estimated cost:

1. Business activity license: $4,000

2. Information protection registration: $300

3. Mailbox: $250

4. Secretary services: $6,000

 

Total: $10,550

5% VAT: $527.50

Total including VAT: $11,077.50

​

​

[Visa application]

After establishing a corporation, you can stay in the UAE for 2-3 weeks to obtain a visa.

Required documents for visa application:

1. Passport

2. Employment contract (to be prepared after the establishment of the corporation)

3. Medical examination results

4. Health insurance

5. Application form and three photos

6. Applicant's bank statement for the last three months (in English)

7. Lease contract

8. (When applying for a companion visa) Notarized marriage certificate or family relationship certificate

​

Visa application procedure:

1. Employment contract preparation

2. Employee's application for an Employment Visa Entry Permit (EVEP) (takes 5-7 business days)

3. Receipt of EVEP at the airport immigration office

4. Physical examination and X-ray at the immigration office

5. Receive a visa and apply for an Emirates ID (Visa issuance usually takes 5 business days)

6. If you have accompanying family members, you can apply for an accompanying visa after obtaining a visa.

​

Business visa application cost:

1. Establishment Card - $1,030 (government cost)

2. New E-Channel account - $4,907 (government cost)

3. Residence visa: $1,500 (government cost)

4. Consulting fees for visa application and medical insurance: $2,500

Total: $9,937

5% VAT: $496.85

Total including VAT: $10,433.85

​

*Medical insurance is required when applying for a visa.

​

Office costs:

The office can be a co-working space like WeWork or Regus, or a separate office. Usually, you can apply for a visa for one person per reserved seat, and you will need to rent a larger space to apply for visas for multiple people.

​

In the case of SERVCORP, the monthly cost of renting an individual office is AED 5,500, and it varies depending on the location and type of office, so it is necessary to check individually.

​

SERVCORP Related Links (Go to)