Can You Have a Side Business in Abu Dhabi?
Updated: Jun 3
2nd June 2020
(This article, by Gateway Group's Senior Managing Partner, Nathan Hunt, was featured in the Spring 2020 issue of the British Business Group Abu Dhabi's quarterly magazine, Capital Letter).
Many people have a dream of doing something else beyond their day job, often related to a hobby. It could be anything from starting a sandwich business to selling products online. For many it will always remain a pipe dream, but for others who have the determination and persistence to follow their passion, starting a small business is an achievable reality.
What is side business? A side business is a way of making extra money. In recent years it has become a booming sector globally, with budding entrepreneurs making an additional income on the side of their main salaried job or as a step to giving up their 9-5 to become financially self-sufficient. The boom has been enhanced massively due to advances in technology, distribution channels and social media.
So can you have a side business in Abu Dhabi? Simply, YES! For any type of business from advisory to home baking to e-commerce, you must have a trade license. Abu Dhabi government offers a trade license option called Tajer, which is purely for UAE residents. It is designed for budding entrepreneurs, enabling them to startup and test the market without the need for a commercial premise for the first two years of operations, which was often the major stumbling block for Abu Dhabi startups wanting to be legal and licensed. This means you can run your small business from home.
What are the benefits of the license?
· Lots of activities to choose from, so there should be something for most startups.
· Save costs on commercial premises by working from home for the first two years.
· Quick setup, usually within 48 hours, so you can get started straight away.
· First license valid for two years.
· Easy bank account opening.
· Multiple shareholders are allowed, meaning friends can collaborate on a new business venture together.
· Legally sell via social media platforms and a website.
· Employ up to three staff.
Do you need a local sponsor? Yes, a local sponsor is required. The legal form of the Tajer license is a Limited Liability Company (LLC). A local sponsor is required to hold a minimum 51% and an expatriate can hold up to 49% of the shares.
What are the ongoing obligations? The license fees are all payable at the time the Tajer license is issued. Then you can operate your business for two years before having to pay any further government fees. At the two year anniversary of the license issue it will be necessary to renew the license at which point the validity will be for 12 months and thereafter renewable annually. It is also necessary for the company to keep accounts to international accounting standards and at the time that your turnover reaches the VAT threshold, it would be necessary to register with the Federal Tax Authority.
How can you accept payments? Setting up a corporate bank account for a Tajer license is surprisingly quick and easy. Thereafter it is possible to receive payments by cash, cheque or electronic transfer. If your business is selling goods it is also possible to setup payment gateways to receive payments via your website and if you are selling to your customers face-to-face you can even have a POS terminal to accept credit and debit card payments.
Conclusion The Tajer license is part of Abu Dhabi government’s Ghadan 21 initiative. It is aimed to encourage entrepreneurship and boost the economy. Not only are employees taking advantage of this type of license to start up their passion projects, but homemakers are investing in these business licenses to earn money from their skills too. Previously, there was a lot of stay-at-home, unused talent in Abu Dhabi where often highly-qualified spouses had moved to the Emirate with their husband and wives but had not joined the job market.
How Gateway Group can help you to start your own side business
Understand what it is that you are wanting to do - there are over 1,000 activities to choose from. What is your passion? Sewing, cooking, repairing equipment, marketing, IT, photography, plumbing, design, making jewellery, sports, selling online, landscaping etc...
Provide one of Gateway's Emirati partners to act as your local sponsor. This will ensure that you have full control of your business (with no interference) and keep all of your well earned profits.
Get your license issued so you can start your own side business!
Written by Nathan Hunt, Senior Managing Partner
Gateway Group of Companies, Abu Dhabi & Dubai UAE
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Protect your business and profits and have an efficient business setup in Abu Dhabi and Dubai by engaging the award-winning Gateway Group to deliver our customised business setup, unique local sponsor packages, and visa processing. To establish your business in the UAE, Email us: Info@GatewayToUAE.com
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