Abu Dhabi licences surge as reforms deepen

Abu Dhabi recorded a sharp rise in new business licences during 2025, underscoring continued momentum in the emirate’s drive to broaden its non-oil economy and attract private investment.

The Abu Dhabi Registration Authority, the regulatory arm of the Abu Dhabi Department of Economic Development, said new economic licences climbed 29 per cent in 2025 compared with 2024. Renewed licences rose 20 per cent over the same period, while the number of active licences expanded by 13.5 per cent, reflecting sustained commercial activity across sectors ranging from technology to professional services.

Officials attributed the expansion to regulatory reforms and administrative measures designed to streamline market entry. Among the key steps was the updating of the register of expired economic licences, a process aimed at improving data accuracy and strengthening transparency in the business environment. Authorities also expanded the list of permitted economic activities, enabling entrepreneurs to establish ventures in emerging fields aligned with the emirate’s diversification agenda.

The figures reinforce Abu Dhabi’s position as a regional business hub at a time when Gulf economies are intensifying efforts to reduce reliance on hydrocarbons. Over the past several years, policymakers in the emirate have introduced measures to lower the cost of setting up companies, digitise licensing procedures and enhance investor protections. The Registration Authority’s latest data suggests these efforts are translating into tangible growth in business formation.

Senior officials at the Department of Economic Development have repeatedly emphasised the importance of a resilient and competitive regulatory framework. By modernising licensing systems and expanding activity classifications, authorities aim to respond more swiftly to changes in global markets and technological innovation. The expansion of permitted activities has included sectors such as advanced manufacturing, digital services, e-commerce, renewable energy solutions and specialised consultancy, reflecting broader economic shifts.

Economists say the rise in new licences signals confidence among domestic and foreign investors. Abu Dhabi’s stable fiscal position, bolstered by energy revenues, has enabled the government to channel investment into infrastructure, logistics and digital transformation. Free zones and mainland reforms have also simplified foreign ownership rules, making it easier for overseas investors to establish wholly owned enterprises in many sectors.

The increase in renewed licences suggests that businesses are not only entering the market but choosing to remain. Analysts note that licence renewals can serve as an indicator of commercial viability and sustained demand. A 20 per cent rise indicates that firms operating in 2024 largely continued operations into 2025, despite global headwinds including higher interest rates and uneven economic growth in key trading partners.

Active licences rising by 13.5 per cent further illustrate the depth of activity within the local economy. While new registrations reflect entrepreneurial intent, the growth in active licences indicates ongoing operations, employment generation and contribution to gross domestic product. Government data in recent years has shown steady expansion in non-oil sectors such as construction, financial services, tourism and information technology, areas that align closely with licensing activity.

Business groups have welcomed the administrative clean-up of expired licences. Updating records reduces discrepancies in official statistics and ensures that the business registry accurately reflects operating entities. Transparency in commercial registers is often viewed by investors as a marker of regulatory maturity, particularly in jurisdictions competing for international capital.

Policy specialists point out that licensing reform forms part of a wider economic strategy. Abu Dhabi has unveiled multi-year programmes to stimulate industrial development, encourage small and medium-sized enterprises and support innovation-driven enterprises. Access to financing, incubation programmes and partnerships with academic institutions have complemented regulatory adjustments, creating an ecosystem intended to nurture start-ups and scale-ups alike.

Entrepreneurs cite digitalisation as a significant factor in easing market entry. The ability to apply for and renew licences online, coupled with integrated government platforms, has reduced processing times and administrative burdens. Such reforms have become particularly important in a region where governments are seeking to position themselves as agile and business-friendly.

Regional comparisons show that Gulf economies are competing vigorously to attract investment in high-growth sectors. Against that backdrop, Abu Dhabi’s licensing data suggests it is maintaining momentum. The emirate’s economic planners have emphasised sectors aligned with long-term global trends, including clean energy technologies, artificial intelligence applications and advanced logistics, areas that typically require supportive regulatory frameworks.

While the headline growth rates are robust, economists caution that sustaining momentum will depend on broader macroeconomic conditions and the ability of new businesses to scale. Access to skilled labour, integration into global value chains and continued regulatory clarity will remain central to maintaining investor confidence.