Limited Liability Company Registration in ADGM Free Zone, Abu Dhabi. Service offer

The company registration in ADGM includes the following steps:

1) Selecting:

• company name to be checked for availability (at least three names);
• company structure (director, shareholders, manager and secretary);
• type and size of the premises required for the proposed business;
• share capital;
• type of licence.

2) Paying fees for services

3) Providing documents for the directors / managers / secretaries / shareholders (either originals or notarized copies, with passport to be valid for at least 6 months before its expiry date):

• colour copy of the internal passport with a page containing an address stamp;
• colour copy of the international passport;
• copy of the international passport’s page with a UAE entry stamp;
• proof of address (unless the internal passport contains an address stamp);
• CV;
• Business Plan;
• legalized power of attorney if registration is performed by a representative.

The shareholders will need to sign a Client Questionnaire Form for completing the compliance procedure and a Contract for administration.

Before registering a company, the Free Zone authority must check the shareholders and directors of the company (Security Check). At this stage, additional documents, for example a police clearance certificate, may be requested.

The check normally takes 2 to 4 business days.

Once the check is done, the company is registered. Upon registration, the Free Zone authority issues the following documents:

• Certificate of Incorporation indicating the registration number and date, type of licence, details of the shareholder and share capital of the company;
• Licence for the company’s declared type of business (valid for 1 year);
• Office lease agreement (for 1 year, depending on the chosen office package);
• Share Certificate;
• Memorandum & Articles of Association.

A company seal is also issued.

The UAE does not have such a concept as a residence permit. The UAE migration rules require the issuance of residence visas which in practice are similar to a residence permit.

A residence visa can normally be obtained on the following grounds:

• based on owning a UAE onshore company – investor visa;
• by making an employment contract with a UAE onshore company – work visa.

The application for residence visas includes the following steps (a visa can only be applied for after the registration of a company):

1. Opening an Establishment Card (the migration file of the company) – 3-5 days. This document is necessary for the company to be able to apply for residence visas in the future.

2. Submitting documents for a residence visa and obtaining an Entry Permit (permission to enter the country) – 5-7 days.

To obtain a residence visa, an individual must enter the UAE with an Entry Permit.

If at the time of issuing of Entry Permit the applicant is already in the UAE, then in order to complete the issuance of a residence visa without leaving and re-entering the country, it is necessary to change the status of the visa. The service of changing the status of a visa is provided upon request and is subject to additional charges.

3. Visiting the UAE to obtain a residence visa – in most cases, a visa can be obtained within 5 business days.

The applicant needs to:

• undergo a medical examination (blood test and chest X-ray);
• submit biometric data (retina and fingerprints scan).

After receiving the passport with a residence visa inserted into it, one can leave the country.

4. Obtaining a resident’s ID card – ID Emirates

The card is issued a few days after the issuance of a visa. Personal presence is not required to receive it.

Upon expiration, a visa can be renewed.

The company must annually renew the licence, by paying a relevant fee, and the lease agreement.

Companies registered in UAE free zones are exempt from capital gains tax, property tax and other taxes, except corporate tax and VAT.

A federal corporate tax was introduced in the UAE on 1 June 2023. Free zone companies may be subject to both the standard rate of corporate tax (9%) and a zero rate. The application of a particular rate depends on a number of factors such as the company’s income, the types of its activities (whether they are excluded or qualifying, or not), counterparties, whether the company maintains adequate economic substance in the UAE, and other aspects.

From 1 January 2018, the UAE introduced a Value Added Tax.

VAT as a general consumption tax applies to all transactions with goods and services, unless such transaction is exempted or taxed at 0% rate.

The standard VAT rate in the UAE is 5%.

There is no obligation to register for VAT unless sales turnover within the country exceeds the registration threshold, which is AED 375 000 (~ USD 100 000) in the UAE.

Registration as a VAT taxpayer is required in the following cases:

• there is reason to believe that the taxable turnover in the next 30 days will exceed the registration threshold (for example, a contract has been made);
• at the end of the month, the taxable turnover for the previous 12 months actually exceeded the registration threshold;
• the company receives services to be included in the return using the reverse charge method, in excess of the registration threshold.

It is possible to initiate a voluntary registration after exceeding the threshold of taxable transactions in the amount of AED 187 500 (~ USD 50 000).

Registration with the UAE Federal Tax Administration and allocation of the company’s Tax Reference Number (TRN) takes 20 business days, on average.

Upon registration with the Federal Tax Administration and allocation of the VAT number, a company must quarterly (or monthly in the case of annual turnover exceeding AED 150 000 000 (~ USD 40 830 900)) prepare and file a VAT return, and pay the resulting VAT within 28 days of the VAT period end.

Before registering a company, we recommend that you consult a specialist of the non-resident audit department and a tax adviser to assess the company’s tax burden and discuss subsequent administration of the company.

Every company registered in Abu Dhabi Global Market must keep accounting records sufficient to confirm its financial position and reflecting up-to-date information about the assets and liabilities of the company. Such records and underlying documents must be available for inspection at any time. The company is obliged to keep accounting records for 10 years from the date of their making.

The directors of the company must annually prepare an annual report consisting of:

• annual financial statements;
• director’s report;
• auditor’s report by a local authorized auditor, unless the company is exempt from audit.

The company’s first accounting reference period begins on the date of incorporation and lasts from 6 to 18 months. Every subsequent accounting reference period lasts exactly 12 months from the end-date of the previous period[4].

The annual report must be filed within 9 months of the end-date of the accounting reference period[5].

A company must annually renew its licence, by paying a relevant fee, and its lease agreement.

The company’s renewal date is the anniversary of the issue of the licence. In the case of late renewal payment, the Free Zone authority reserves the right to charge fines, as well as suspend the licence.

Assistance with opening corporate and personal bank accounts, including[8]:

[1] 5% VAT applies.

[2] The cost of the package may vary depending on the number of shareholders, type of licence, and size of office (the office size dictates how many residence visas a company can have).

[3] The description of the account opening stages and the conditions for charging an additional success fee can be found below, in the Fees section.

[4] The accounting reference date can later be changed by filing the relevant form to the Registrar.

[5] For the first accounting reference period exceeding 12 months, this deadline is different and is:

(а) nine months from the first anniversary of the company’s incorporation, or

(b) three months from the end-date of the accounting reference period,

whichever is later.

[6] 5% VAT applies.

[7] The cost of the package may vary depending on the number of shareholders, type of licence, and size of office (the office size dictates how many residence visas a company can have).

[8] For more details on how fees for account opening assistance are charged, please contact your GSL consultant.

[9] The fees for preparing financial statements and conducting an audit are charged based on the time spent at hourly rates ranging from USD 100 to USD 400, depending on the type of work and qualification of a specialist involved, but are not less than USD 2 200 – fees for audited financial statements with a minimum number of transactions.