How to Start a Business in Abu Dhabi Mainland: A Step-by-Step Guide

Abu Dhabi, capital of the United Arab Emirates (UAE), is rapidly developing into a hotspot for entrepreneurs and foreign investors. Secure, with high living standards and a favorable regulatory environment, the city offers excellent potential to anyone looking to start or grow a business.  

There are various means of setting up a company in the UAE, but establishing a presence on the Abu Dhabi Mainland offers some of the most flexible and profitable options. This guide will walk you through every step of establishing a business in the Abu Dhabi Mainland in 2025.  

From choosing your business activity and legal structure to getting your Abu Dhabi Mainland license and opening a bank account, we'll cover it all. We'll lay it out in this step-by-step guide that is easy to follow even if you're new to the UAE business landscape.

Why Abu Dhabi Mainland for Your Business?

Opting for the mainland instead of a free zone can grant your business greater access and fewer limitations. For one, mainland businesses are allowed to do business anywhere in the UAE and even bid for government and semi-government contracts, something that is not typically available to free zone businesses.  

You are also not limited to conducting business within a geographical area, which gives you more flexibility in choosing an office space that suits your operations. A major advantage in 2025 is that many business activities on the mainland now allow full foreign ownership, eliminating the need for a local sponsor in numerous sectors.  

This change has opened the door wider for foreign entrepreneurs and companies to enter the UAE market with full control over their ventures. You’ll also benefit from the city’s modern infrastructure, access to skilled talent, and a strategic location that bridges the East and the West.

Understanding Abu Dhabi Mainland Business Regulations

All Abu Dhabi Mainland companies are overseen by the Abu Dhabi Department of Economic Development (ADDED). This authority governs the issuance of trade licenses and your company's compliance with the relevant laws and regulations.

Businesses are also accountable to UAE-wide regulations, including labor law, tax filing, and Emiratisation policies (where applicable). It is essential to understand what type of Abu Dhabi Mainland license you'll need, commercial, industrial, or professional, because this not only determines what you may do but also what legal form you may adopt.  

In some cases, special approvals from other government agencies may be required depending on the business activity. These rules may seem complex to deal with, but once one is familiar with them, it is doable.

Step-by-Step Guide to Starting a Business in Abu Dhabi Mainland

Step 1: Define Your Business Activity

The first step in setting up a business is to clearly define what you’ll be doing. The ADDED provides a comprehensive list of over 2,000 approved activities. These range from consulting and trading to more specialized sectors like healthcare, education, and manufacturing.  

Your choice of activity will impact everything from the type of license you’ll need to the office space requirements and even the type of visa your business can sponsor. Some business activities, like those in healthcare or legal services will also require approvals from external regulatory bodies.

Step 2: Choose a Legal Structure

You should then determine your company's legal structure. The most common structure is the Limited Liability Company (LLC), which offers liability protection and is now available for 100% foreign ownership in most industries. If you are an individual professional offering services such as consulting, you can consider licensing as a sole proprietorship or a civil company.

Alternatively, if you’re looking to expand an existing business into Abu Dhabi, licensing a branch of a foreign company might be the right option. Each structure has its own benefits and implications regarding ownership, liability, taxation, and documentation.

Step 3: Reserve a Trade Name

Once you have determined your activity and legal form, you can choose and reserve your business name. ADDED requires that trade names be unique, pertinent to your business activity, and free of any religious, political, or offensive implications. You may also not use abbreviations or international organization names without the legal rights to do so.

You can submit your application for name reservation through ADDED's e-portal or by visiting a typing center enrolled with ADDED. The cost of reserving a name starts from AED 620 and the name is usually reserved for six months.

Step 4: Obtain Initial Approval from ADDED

The initial approval is essentially a green light from the government to proceed with the rest of the licensing process. It confirms that your proposed business activity and legal structure are acceptable.  

For this step, you’ll need to submit copies of your passport, details of your business activity, the reserved trade name certificate, and other relevant information. The initial approval is usually granted within a few working days and is valid for six months.

Step 5: Draft and Notarize the MOA or LSA Agreement

Depending on your legal structure, you'll have to prepare either a Memorandum of Association (MOA) or a Local Service Agent (LSA) agreement. The MOA defines ownership and operational rules for LLCs and must be notarized.  

If you are licensing as a sole proprietor for professional license purposes, you may need an LSA agreement instead. Even though 100% foreign ownership is allowed in most sectors, this step is still necessary to complete the legal formalities. These documents are usually prepared by legal professionals and authenticated at the Abu Dhabi notary public.

Step 6: Arrange a Commercial Facility in Abu Dhabi

To obtain your trade license, you’ll need to show proof of a physical office in Abu Dhabi. This involves signing a lease agreement and issuing it under the Tawtheeq system, which is Abu Dhabi’s tenancy contract issuance platform.

The size and location of your office should align with your business activity and staff size. For some small businesses or startups, shared workspaces may be acceptable, but this depends on the licensing requirements.  

Step 7: Obtain Approvals from the Authorities Involved

If your business activity is in special categories such as food and beverage, medical services, education, or tourism, you will require further approvals from other government departments.  

These may be the Ministry of Health, Abu Dhabi Municipality, Civil Defense, or the Department of Culture and Tourism. The requirement for these approvals can increase the timeline and Abu Dhabi Mainland license cost, so it is best to ascertain the requirements early in the process.

Step 8: Submit Final Application and Pay Fees

Once all the documents are ready, including the trade name reservation, initial approval, MOA or LSA agreement, tenancy contract, and external approvals, you can submit your final application to ADDED.  

After paying the applicable fees, which can vary depending on your license type and activity, you’ll receive your official Abu Dhabi Mainland license. The entire process from initial approval to license issuance can take between one and three weeks, assuming all documents are in order.

Step 9: File for VAT and Open a Corporate Bank Account

If your company’s turnover is expected to exceed AED 375,000, you’ll need to file for VAT with the Federal Tax Authority (FTA). VAT filing is mandatory for qualifying businesses and requires documentation such as your trade license, lease agreement, and shareholder details.

Also, the opening of a corporate bank account is necessary for business operations. UAE banks perform detailed due diligence, so be prepared to submit a business plan, shareholder IDs, office lease, and potentially proof of funds.  

Some of the most popular banks include Emirates NBD, First Abu Dhabi Bank (FAB), and Abu Dhabi Islamic Bank (ADIB).

Business Setup in Abu Dhabi Mainland Cost Breakdown

While the fees may vary significantly based on your business activity, size, and location, here's an approximate calculation to help you plan:

Trade name reservation: Starts from AED 620  

Initial approval: Starts from AED 100  

MOA/LSA notarization: Starts from AED 2,000  

License issuance from ADDED: Starts from AED 7,000  

Office lease and Tawtheeq: Starts from AED 10,000  

External approvals: Varies

VAT filing (if applicable): Starts from AED 500  

Corporate bank account opening: Free to AED 5,000+, depending on the bank

Common Challenges and How to Overcome Them

Setting up a business in the Abu Dhabi Mainland is a rewarding experience, though not devoid of challenges. Common issues encountered include delays due to incomplete documentation, uncertainty on external approvals, and choosing the wrong business activity or legal structure.

Banking can also be problematic, especially for foreign investors unfamiliar with local requirements. To evade such pitfalls, it is usually best to engage the services of a licensed business setup consultant who's familiar with the legal environment and can help expedite the process. That way, you get to evade expensive blunders as well as maintain compliance at all levels.

Benefits of Engaging a Business Setup Consultant

Dealing with a consultant will save you money, time, and frustration. Business Setup Consultants will assist you in choosing the correct structure, preparing documentation, leasing compliant office space, and even dealing with VAT filing and opening a bank account.

For businesses and individuals new to the UAE's legal framework or setting up their first business, expert assistance can be a lifesaver.

Setting up a business in Abu Dhabi Mainland in 2025 is a lucrative opportunity for entrepreneurs, startups, and foreign businesses alike. With business-friendly government policies, a tax-friendly environment, and growing market access, Abu Dhabi offers the ideal platform for sustainable business development.  

By following the steps outlined above and staying abreast of regulatory updates, you can license your business with ease and confidence. If you are ready to proceed, consider booking a consultation with experts to make your Abu Dhabi business setup fast, compliant, and stress-free.

Seek our professional on-the-ground guidance, contact us via mail at info@radiantbiz.com or WhatsApp & call us at  +971 55 234 7124!