Business Setup in Abu Dhabi: Mainland, Free Zone or ADGM?
You can set up a company in Abu Dhabi in three ways: on the mainland under the Abu Dhabi Department of Economic Development (ADDED), in one of its free zones, or in the ADGM financial centre. Each route gives a different licence, a different place where you can trade and a different cost profile. This guide explains how the three compare, what each Abu Dhabi free zone is built for and which route fits which kind of business.
Key takeaways
- Most Abu Dhabi mainland activities allow 100% foreign ownership, with no local partner, but activities of “strategic impact” can still be restricted.
- ADDED lists six free zones: ADGM, KEZAD, Masdar City, Abu Dhabi Airports Free Zone, twofour54 and the Industrial City of Abu Dhabi.
- A free zone company normally trades inside its zone and abroad. To sell on the mainland it needs a distributor, customs clearance or a dual licence where one is available.
- Our starting prices are AED 14,910 for an Abu Dhabi mainland company, AED 9,450 for KEZAD and USD 5,700 for ADGM.
- Free zone companies still fall under UAE Corporate Tax, and the 0% rate applies only to qualifying income.
The Three Ways to Set Up in Abu Dhabi
Abu Dhabi runs a split system. Mainland companies are licensed by ADDED, free zone companies by the authority of their own zone, and ADGM companies by the ADGM Registration Authority. The authority that issues your licence decides your rules, your fees and your renewal calendar.
Choosing the route before the zone saves most of the wasted effort. Start with where your customers are, what you sell and who must sign off your activity, then pick the licence that matches.
| Mainland (ADDED) | Free zone | ADGM | |
|---|---|---|---|
| Licence authority | ADDED, with day-to-day licensing through ADRA | The zone’s own authority | ADGM Registration Authority; the FSRA first for financial activities |
| Foreign ownership | 100% for most activities | 100% | 100% |
| Where you can trade | Across the emirate and the wider UAE | Inside the zone and abroad; mainland sales need a route | Inside ADGM and abroad |
| Premises | Commercial premises, or a virtual licence for eligible structures | Zone premises, often a flexi desk | A registered office on Al Maryah Island |
| EZONE starting price | AED 14,910 | AED 9,450 (KEZAD) | USD 5,700 |
Abu Dhabi Mainland Company
A mainland licence lets you trade anywhere in the emirate and across the UAE without a distributor. It also opens the door to government and semi-government work, although the In-Country Value (ICV) score affects how contracts are awarded. If your customers are local businesses or the public, this is usually the route to start with.
Federal Decree-Law No. 26 of 2020 removed the old rule that a UAE national must hold 51% for most activities. The rules now sit under Commercial Companies Law No. 32 of 2021. Activities of strategic impact can still be restricted or need extra approval, so check your own activity before you assume 100%.
Licence types
Mainland licences follow the nature of the activity. The main categories are commercial, professional and industrial, and ADDED’s own resolution also covers agricultural, occupational and related service licences.
- Commercial licence: trading, contracting, transport, real estate and similar activities.
- Professional licence: consultants, engineers and other service providers. Some professions need approval from another body first, such as the Department of Health for healthcare practitioners.
- Industrial licence: factories and manufacturing. For some industrial projects the Industrial Development Bureau is the relevant authority, not ADDED.
What the process looks like
Invest with Abu Dhabi describes a standard licence, an instant licence and a dual licence. The instant route is currently open to three legal forms: an establishment, a sole proprietorship and a limited liability company (LLC). Applications go through the Abu Dhabi Business Centre.
Foreign investors can also apply for a virtual licence from abroad, as either an LLC or a sole proprietorship LLC with 100% ownership. Most mainland activities have no minimum capital requirement.
The trade licence is generally valid for one year and must be renewed every year. Our Abu Dhabi mainland business setup page shows the steps and the documents we collect.
Abu Dhabi Free Zones
ADDED lists six free zones, each tailored to a sector. They share the same core benefits: 100% foreign ownership and full repatriation of capital and profits. They differ in what they are built for, which is why the zone should follow the activity and not the price.
ADGM: the financial centre
Abu Dhabi Global Market sits on Al Maryah Island and has operated since 2013. It runs its own legal system and suits asset managers, banks, fintechs, holding structures and foundations. See our ADGM licence page for the full picture.
A financial business needs approval from the Financial Services Regulatory Authority (FSRA) before it registers with the Registration Authority. A non-financial company skips the FSRA and applies directly to the Registration Authority. You need a registered office on Al Maryah Island, and the lease must run for one year from the date the commercial licence is issued.
At least one signatory must be a GCC national or hold a valid UAE residence visa. ADGM’s 2025 fee schedule and press reports put the non-financial registration fee at roughly USD 5,500 to 5,800, with a separate annual renewal. Check the current schedule before you budget.
KEZAD: trade, logistics and industry
Khalifa Economic Zones Abu Dhabi, formerly KIZAD, sits beside Khalifa Port. It is the natural home for manufacturing, warehousing, trading and distribution. Read our KEZAD free zone licence guide for the licence types.
The licence fee is rarely the biggest line. Land, warehouse and factory space are quoted per project, and sector approvals for food, chemicals and heavy industry add time. Ask for a written quote that covers your facility and your visa count.
Masdar City Free Zone: clean tech and startups
Masdar City focuses on clean technology and renewable energy, and it welcomes startups. Its licensing page lists more than 1,000 approved activities and four packages. Prices below are Masdar’s own, in dirhams, and can change.
| Package | Price | Activities | Includes |
|---|---|---|---|
| Startup | AED 7,000 | Up to 2 | Licence and registration |
| Innovation | AED 12,000 | Up to 3 | Two visa quota and a flexi desk lease |
| Business One | AED 17,500 | Up to 3 | One visa, flexi desk lite lease, establishment card and e-channel fees |
| Enterprise | AED 27,000 | Up to 6 | Three visa quota and a flexi desk plus lease |
Masdar also lists a virtual desk at AED 6,000 a year and a flexi desk at AED 10,000 a year. One-off government charges include an establishment card at AED 1,600 and eChannels registration at AED 2,600. Masdar says registration usually takes a few working days once documents are approved, and it states that package charges are subject to 5% VAT.
twofour54: media and creative
twofour54 serves media, entertainment and gaming businesses, and it also licenses freelancers. It offers trade licences across 57 media, entertainment and gaming categories. If you run a production company, a studio or an esports business, this is the zone built for you.
Abu Dhabi Airports Free Zone and ICAD
Abu Dhabi Airports Free Zone serves aviation, logistics, freight and aerospace operators who need to be close to the airport. The Industrial City of Abu Dhabi (ICAD) serves industrial users. Both are narrower in scope than the zones above, so confirm that your activity is permitted before you apply.
You can compare the cheapest options across the whole country in our cheapest free zone in the UAE guide, and read how every emirate compares in business setup in the UAE by emirate. Our Abu Dhabi free zone business setup page lists the zones we work with.
Selling to the Mainland From a Free Zone
A free zone company is licensed to trade inside its zone and internationally. If most of your customers sit on the Abu Dhabi mainland, you have three options.
- Use a distributor: goods clear customs through a mainland partner, and you sell to the distributor.
- Take a dual licence: Invest with Abu Dhabi says this lets an eligible free zone company also operate onshore, where permitted.
- Open a mainland company instead: you give up the zone benefits but gain direct access to the market.
Dual licences are not available for every activity or zone. Confirm eligibility with the zone and with ADDED before you build a plan around one.
Corporate Tax for Abu Dhabi Companies
Where you set up does not change the basic tax position. Every UAE company is a taxable person under Corporate Tax, which applies at 9% on taxable income above the threshold. A free zone company can pay 0% on qualifying income if it meets the conditions of a qualifying free zone person.
Those conditions include adequate substance in the zone, audited financial statements and keeping non-qualifying revenue within the de minimis limit. Our guide to free zone tax and QFZP status sets them out, and the Federal Tax Authority sets the filing rules. A mainland company does not need to meet these conditions, because it pays the standard rate on all taxable income.
Both types of company must register for Corporate Tax and file a return. The sister site companyformationinuae.com publishes more on free zone company setup costs and process, and its home page lists its other UAE guides.
How to Choose the Right Route
Match the route to the work you will actually do. These questions settle most cases.
- Who are your customers? Local customers and government work point to the mainland. Overseas customers point to a free zone.
- What do you sell? Physical goods and heavy equipment point to KEZAD or ICAD. Software, clean tech and media point to Masdar or twofour54. Finance and holding structures point to ADGM.
- Do you need staff in a hurry? Check how many visas each package supports before you compare prices.
- Will you need a bank account? Prepare for bank questions about your business model, wherever you register.
Common Mistakes
- Comparing licence fees only. The visa quota, the office lease and the establishment card often cost more than the licence.
- Picking a free zone, then selling on the mainland. A free zone company needs a distributor or a dual licence for mainland sales.
- Assuming 100% ownership for every activity. Strategic activities and regulated professions need extra approvals.
- Skipping the activity check. A licence only covers the activities listed on it, and each zone publishes its own list.
- Ignoring Corporate Tax. Every company must register, and a free zone company that fails the conditions loses the 0% rate.
Next Steps
Tell us what you sell, where your customers are and how many people you plan to hire. We will recommend a route, give you a written quote that shows the licence, visas and premises and manage the application with the authority. Fees and rules change, so confirm every figure on the official source before you pay.
Frequently Asked Questions
Yes for most mainland activities, since Federal Decree-Law No. 26 of 2020 removed the 51% Emirati ownership rule. Activities of strategic impact can still be restricted or need approval. Free zones and ADGM allow 100% foreign ownership.
The Abu Dhabi Department of Economic Development lists six: ADGM, KEZAD, Masdar City, Abu Dhabi Airports Free Zone, twofour54 and the Industrial City of Abu Dhabi.
Not directly. It can sell through a distributor, or through a dual licence where its zone and activity allow one. Otherwise it needs a mainland company.
On our price list, ADGM starts at USD 5,700, KEZAD at AED 9,450 and an Abu Dhabi mainland company at AED 14,910. The cheapest total depends on visas, premises and activity, so compare full quotes.
It depends on the route. ADGM needs a registered office on Al Maryah Island, free zones often accept flexi desks, and Abu Dhabi offers a virtual licence for eligible mainland structures.
Masdar City lists a Startup package at AED 7,000 for up to two activities and welcomes clean tech and innovation companies. twofour54 suits media and gaming startups.
Yes. They pay 0% only on qualifying income and only if they are a qualifying free zone person. Other income is taxed at 9%, and they must register and file a return.
It varies by route. Masdar says registration usually takes a few working days once documents are approved, and Abu Dhabi offers an instant licence for eligible mainland legal forms. Bank accounts and visas add time.
