Business setup in Abu Dhabi
Abu Dhabi has more industry and more government buyers than Dubai, and licences and office rents are often lower for a company of the same size. This page sets out the main company routes in the capital, what they cost to start and which tax rules apply.
Foreign founders in Abu Dhabi usually choose between four routes: a mainland company through ADDED, the common-law financial centre ADGM, the industrial and logistics zone KEZAD around Khalifa Port, and Masdar City for cleantech, with twofour54 for media. Comparable licences are often cheaper than in Dubai, and office rent is usually lower. Federal rules apply in every case: corporate tax at 0% on taxable income up to AED 375,000 and 9% above it, and 5% VAT once taxable supplies pass the registration threshold. We file in Abu Dhabi as well as Dubai, so you do not need to be in the capital to set up there.
- Four main routes: mainland (ADDED) for local trade and government contracts, ADGM for finance, holdings and tech under common law, KEZAD for industry and logistics, Masdar City for cleantech, plus twofour54 for media.
- Comparable licences are often priced below their Dubai equivalents, and office rent is usually lower.
- Federal tax is the same in every emirate: 0% up to AED 375,000 and 9% above. An ADGM, KEZAD or Masdar company that qualifies as a QFZP pays 0% on qualifying income and 9% on other taxable income.
- A mainland (ADDED) licence lets you trade across the UAE and is the usual route into government procurement. Free zone companies follow free zone rules wherever they operate.
- Filings, the progress tracker and the itemised quote work the same way whether you are in Abu Dhabi, Dubai or abroad.
Company types in Abu Dhabi: mainland and free zones
Abu Dhabi has several separate registration systems, each with its own regulator, price list and purpose. Choosing the right one is the main decision; issuing the licence is the simpler part.
Mainland (ADDED) is the onshore licence issued by the Abu Dhabi Department of Economic Development. It lets you trade anywhere in the UAE and is the structure normally required to bid for government and government-linked contracts, which matters in the capital because that is where much of the public spending is. The Tajer Abu Dhabi licences cover home-based and small trading activities at lower entry prices.
ADGM, on Al Maryah Island, is a common-law financial centre with its own English-law courts and an independent regulator. It is used by funds, fintech companies, holdings and professional service firms, and its tech-startup and professional licences are often cheaper than the Dubai common-law equivalents. KEZAD is the industrial and logistics zone around Khalifa Port, with manufacturing, warehousing and industrial land at lower prices than in Dubai. Masdar City is the cleantech and sustainability free zone, and twofour54 on Yas Island is the media zone.
| Route | Suits | Where it can trade |
|---|---|---|
| Mainland (ADDED) | Government contracts, local trade, onshore services | Across the UAE, including public procurement |
| ADGM | Funds, fintech, holdings, professional services | Free zone rules; international through the structure |
| KEZAD | Manufacturing, logistics, warehousing | Free zone or industrial licence |
| Masdar City | Cleantech, R&D, sustainability | Free zone rules |
Abu Dhabi or Dubai?
Abu Dhabi makes sense when your customers include government and government-linked companies, when you need industrial land at a reasonable price, when your investors want an ADGM-regulated entity, or when the costs are lower for your case. Licences are often cheaper than comparable Dubai ones, and office rent is usually lower, which you save again at every renewal.
Dubai makes more sense when you sell to consumers in volume, move goods through Jebel Ali, or need a Dubai address for your customers. Many groups use both: an operating company where the customers are and a holding company where the structure works best. We price the two-emirate option and compare it with a single free zone company (see mainland vs free zone) before you commit.
If you are comparing Abu Dhabi with the other emirates rather than Dubai, Sharjah and the northern emirates usually have lower entry prices, which suits founders who do not need access to Abu Dhabi government buyers.
What an Abu Dhabi licence costs
The figures in the table below are the starting licence fees we quote from. Visas, office or warehouse space and the establishment card come on top, and your quote lists all of them before you pay anything. Tariffs change, so we check each figure with the authority when we prepare your quote.
In practice, ADGM’s tech-startup licence is one of the lower-cost common-law options, a mainland licence requires an office lease that raises the total, and KEZAD and Masdar fall in between depending on the space and number of visas you need. To see the total for your activity and headcount, use the setup cost calculator or compare zones in the Free Zone Index.
Corporate tax and VAT for an Abu Dhabi company
The place of incorporation in Abu Dhabi does not change federal tax. UAE corporate tax is 0% on taxable income up to AED 375,000 and 9% above it, for mainland and free zone companies alike. There is no personal income tax. VAT is 5%, and registration is mandatory once taxable supplies and imports exceed AED 375,000 over the past 12 months (voluntary from AED 187,500).
Free zone companies can do better, but only if they meet the conditions. An ADGM, KEZAD or Masdar company that qualifies as a Qualifying Free Zone Person (QFZP) pays 0% on qualifying income and 9% on all other taxable income, with no AED 375,000 band. It needs adequate substance in the zone, audited accounts, transfer-pricing compliance, and non-qualifying revenue that does not exceed the lower of AED 5 million or 5% of total revenue. A company that fails a condition loses the status from the start of that tax period and for the next four. Small companies with revenue of AED 3 million or less in each tax period can instead elect Small Business Relief for tax periods ending on or before 31 December 2029. The details are on corporate tax in the UAE.
Visas, residency and the Golden Visa
Every route above lets the company sponsor residence visas. What varies is how many visas come with the package and what each one costs. KEZAD’s one-visa package includes the visa in the licence price, while on the mainland and in ADGM the visa quota depends on office space.
Founders and investors who own UAE property worth AED 2 million or more can apply for a Golden Visa. It is issued for 10 years in Dubai (GDRFA), so check the validity with the issuing emirate. Skilled professionals, specialists and people with exceptional talent have their own Golden Visa categories that do not require property.
Opening a bank account and meeting substance rules
A licence does not come with a bank account. UAE banks review the business behind the company (its activity, the source of funds and whether its substance matches its description) before they open an account. Abu Dhabi banks are used to local companies, and ADGM’s common-law structure is familiar to compliance teams. We prepare the file in the form banks review it. The process is explained in our bank account guide.
Our progress tracker, itemised quote and monthly bookkeeping work the same way whether the licence is in Abu Dhabi or Dubai. The choice of route affects your costs every year, so it is worth taking time over, and we price the options before you sign.
Starting licence fees in Abu Dhabi
Frequently asked questions
Can an Abu Dhabi company work in Dubai?
Is ADGM only for finance?
Is Abu Dhabi cheaper than Dubai?
Do ADGM and KEZAD companies pay corporate tax?
Can I get a Golden Visa through an Abu Dhabi company?
Do you handle Abu Dhabi setups from Dubai?
This is general information on UAE rules. It is not legal, tax or immigration advice for your situation. Rules and government fees change; we confirm the position for your facts in writing before you act.