Emirate of Sharjah, the third-largest and one of the seven emirates in the United Arab Emirates (UAE), is rapidly emerging as a significant business hub in the region. Known for its strategic location, diverse economy, and business-friendly environment, Sharjah is attracting entrepreneurs and foreign investors. With a population of over 1.70 million, it offers a large and dynamic market, providing ample business opportunities for business growth and expansion.
Moreover, the emirate’s regulatory environment is both business-friendly and discreet, providing a level of confidentiality that sophisticated investors value. We will look into the compelling reasons and advantages of starting a business setup in UAE, Sharjah.
Reasons to Start a Business in the Strategic Location of Sharjah
Strategic Location
Geographic Position and Key Markets
Sharjah’s ideal location at the crossroads of Europe, Asia, and Africa makes it an ideal hub for international trade and commerce. Its strategic positioning ensures a favorable environment and efficient access to key markets with investment opportunities in these regions, enhancing business growth potential.
Global Trade Networks
Sharjah’s well-developed infrastructure, including ports, airports, and road networks, supports seamless import and export activities. Facilities like Sharjah International Airport and Port of Khorfakkan streamline logistics, boosting competitiveness and growth for foreign nationals.
Business-Friendly Policies
No Capital Requirements
Sharjah eliminates mandatory capital requirements, making it easier for SMEs to launch and grow. This policy encourages entrepreneurs to start their startups in Sharjah by lowering entry barriers.
Ease of Currency Regulations
Businesses in Sharjah benefit from flexible currency regulations, facilitating smooth international transactions and enhancing operational efficiency.
No Mandatory Audits
The absence of mandatory audits allows companies to decide based on their needs, reducing administrative burdens and allowing a focus on core operations.
Access to Markets
Large Expatriate Population
Sharjah’s substantial expatriate population creates a significant market for businesses. Affordable property prices attract a diverse, growing population, driving demand for various products and services.
High Consumer Spending
Expatriates in Sharjah have high disposable incomes, leading to potential for significant consumer spending and substantial business growth.
Diverse Market Opportunities
Sharjah’s economy spans multiple domains, offering opportunities in manufacturing, trade, services, technology, and more. This diversity supports various business strategies and success across different industries.
Tax Advantages
Exemption from Taxes
Businesses in Sharjah’s Free Zones enjoy attractive tax advantages and exemptions from corporate and personal income taxes, enhancing profitability. These exemptions typically last 15 to 25 years and are renewable.
Boosted Profitability
Tax exemptions, combined with the absence of import/export fees, significantly reduce operational costs, allowing businesses to reinvest in growth and maintain a competitive edge.
Profit Repatriation
Unrestricted Profit Repatriation Sharjah allows businesses to repatriate profits and capital freely, benefiting international investors and ensuring efficient financial management.
Simplified Financial Management Lack of repatriation restrictions streamlines financial operations, reducing administrative burdens and enhancing operational efficiency.
Flexible Business Environment
No Restrictions on Business Activities Sharjah supports a wide range of business operations, enabling entrepreneurs to explore diverse opportunities and adapt to market changes.
Unlimited Employee Visas Sharjah’s flexible visa policy allows for unlimited issuance of employee visas, supporting business growth by enabling the recruitment of global talent.
Supportive Infrastructure
Modern Facilities Sharjah offers state-of-the-art infrastructure, including modern office spaces, warehouses, and logistics hubs. Reliable utilities and high-speed internet support efficient business operations.
Access to Ports and Airports Proximity to major ports and airports enhances logistical advantages, facilitating efficient trading processes.
Skilled Workforce
Diverse and Well-Trained Talent Sharjah’s multicultural environment attracts a skilled workforce, supporting creativity and innovation. Businesses can build strong, dynamic teams to drive growth.
High Quality of Life
Safe and Secure Living Sharjah offers a secure living environment with low crime rates and political stability, attracting skilled professionals and their families.
Cultural Heritage and Modern Amenities The Emirate blends rich cultural heritage with modern amenities, providing a high quality of life that appeals to both business owners and employees.
Sustainability Initiatives
Commitment to Environmental Sustainability Sharjah promotes eco-friendly practices and technologies, supporting businesses in reducing their environmental impact and operational costs.
Networking Opportunities
Collaborative Business Community Sharjah’s diverse international business community fosters networking and collaboration, encouraging innovation and growth.
Government Support
Proactive Support and Streamlined Procedures The UAE government provides robust support, including policy incentives and financial assistance, while streamlined procedures make business setup efficient.
Fostering Innovation Sharjah actively promotes innovation through funding, support for tech startups, and partnerships with academic institutions, creating a dynamic business environment.
For personalized guidance and assistance in setting up your business in Sharjah, contact a Business Setup Advisor to help navigate the complexities and ensure a smooth establishment process.
Setting up a Business in Sharjah Mainland vs. Free Zones
For personalized guidance and assistance in setting up your business in Sharjah, contact a Business Setup Advisor to help navigate the complexities and ensure a smooth establishment process.
Overview of Sharjah’s Free Zones:
- Hamriyah Free Zone Authority (HFZA)
- Sharjah Airport Free Zone (SAIF)
- Sharjah Media City (Shams)
- Sharjah Research Technology and Innovation Park (SRTIP)
- Sharjah Healthcare City (SHCC)
- Sharjah Publishing City
Overview of Sharjah’s Mainland:
- Al Nahda
- Al Majaz
- Al Qasimia
- Al Taawun
- Al Khan
- Muwailih Commercial
Advantages of Business Setup in Sharjah Free Zones
1. 100% Foreign Ownership
Government of Sharjah allows 100% foreign ownership in the free zones, enabling expatriates and international investors to have complete control over their business operations without needing a local partner.
2. 0% Corporate and Personal Income Tax
Free zone businesses can benefit from zero corporate tax and personal income tax, enhancing profitability and allowing for reinvestment into business growth.
3. No Import, Export, Re-export Fees, or Customs Duties
Companies are exempt from import, export, and re-export fees as well as customs duties, reducing operational costs and streamlining international trade.
4. Modern Infrastructure and Facilities
Free Zones offer state-of-the-art infrastructure, including modern office spaces, warehouses, and logistics hubs, along with reliable utilities and high-speed internet.
5. Quick and Easy Setup Process
The streamlined business setup process in Free Zones, with minimal bureaucracy and expedited approval procedures, allows for a quick start to operations.
6. Access to Skilled Workforce
Sharjah Free Zones attract a diverse and well-trained talent pool, providing businesses with access to a skilled workforce to support various operational needs.
Advantages of Business Setup in Main land
1. Ability to Conduct Business Across the UAE
Companies in the Mainland can operate throughout the UAE, including with federal and local government bodies, offering access to a larger market.
2. 100% Foreign Ownership
Recent amendments allow 100% foreign ownership in specific sectors without the need for a local sponsor, providing greater flexibility and control.
3. No Currency Restrictions
Mainland businesses face no currency restrictions, facilitating smooth financial transactions.
4. Easy Access to Finance
Companies in the Mainland have easier access to funding from local and international banks, supporting business growth and expansion.
5. Diverse Business Activities Allowed
Mainland businesses can engage in a wide range of commercial activities without the limitations often imposed in Free Zones.
6. Potential for Higher Employee Visas
The Mainland allows for a potentially higher number of employee visas, supporting larger workforce needs.
Key Considerations for Both Options
- While many businesses in the Mainland require a local sponsor who holds 51% of the company shares, certain domains now allow full foreign ownership.
Business Activities
- Free Zones are ideal for companies focused on international trade, logistics, and services, while Mainland setups are better for businesses targeting the UAE market.
Cost and Setup
- Free Zones typically offer lower setup costs and quicker registration processes, whereas Mainland setups might involve more comprehensive procedures but offer broader operational freedom.
Regulatory Environment
- Both Mainland and Free Zones have their own regulatory environments and compliance requirements. It is crucial to understand these before deciding on the setup.
The Most Suitable Business Setups in Sharjah
1. Logistics and Transportation
Sharjah’s strategic location between Europe, Asia, and Africa, combined with its excellent transport infrastructure, makes it an ideal hub for logistics and transportation businesses.
Key Advantages:
- Proximity to major ports and Sharjah International Airport.
- Efficient cargo handling facilities.
- Connectivity to major trade routes.
2. Manufacturing and Industrial
Sharjah hosts a significant portion of the UAE’s manufacturing activities, supported by well-developed industrial zones and Free Zones.
Key Advantages:
- Access to state-of-the-art industrial infrastructure.
- Availability of raw materials and skilled labor.
- Tax exemptions and incentives in Free Zones like Hamriyah Free Zone.
3. Trading and Import/Export
The Emirate’s location and logistics infrastructure make it an excellent base for trading and import/export businesses.
Key Advantages:
- No customs duties in Free Zones.
- Simplified import/export procedures.
- Access to a large expatriate market with diverse needs.
4. Technology and Innovation
Sharjah is increasingly focusing on technology and innovation, with dedicated Free Zones like Sharjah Research Technology and Innovation Park (SRTIP).
Key Advantages:
- Supportive government policies for tech startups.
- Access to research and development facilities.
- Collaboration opportunities with academic institutions.
5. Healthcare and Medical Services
The growing population and demand for quality healthcare services make Sharjah an attractive location for healthcare and medical businesses.
Key Advantages:
- Supportive infrastructure in Sharjah Healthcare City.
- Increasing demand for specialized medical services.
- Opportunities for public-private partnerships.
6. Education and Training
With a strong focus on education and a growing young population, Sharjah offers significant opportunities in the education sector.
Key Advantages:
- Presence of reputable educational institutions.
- Support for vocational and professional training centers.
- Demand for quality educational services from expatriates.
7. Media and Creative Industries
Sharjah Media City (Shams) provides a supportive environment for media, entertainment, and creative businesses.
Key Advantages:
- Access to modern media production facilities.
- Supportive regulations for content creation and distribution.
- Opportunities for collaboration within the creative community.
8. Tourism and Hospitality
Sharjah’s rich cultural heritage and tourist attractions make it a prime location for tourism and hospitality businesses.
Key Advantages:
- Growing number of tourists and cultural events.
- Support from government initiatives to promote tourism.
- Opportunities in eco-tourism and cultural tourism sectors.
9. Retail and E-Commerce
The large expatriate population and increasing internet penetration support the growth of retail and e-commerce businesses.
Key Advantages:
- Access to a diverse and affluent consumer base.
- Supportive infrastructure for e-commerce logistics.
- Opportunities to tap into the growing online shopping trend.
10. Environmental and Sustainability Services
Sharjah’s commitment to sustainability creates opportunities for businesses focused on environmental services and green technologies.
Key Advantages:
- Supportive government policies and initiatives.
- Increasing demand for sustainable solutions.
- Opportunities in renewable energy, waste management, and green construction.
Key Documents Required
- Memorandum of Association (MOA)
- Legal document outlining the company’s objectives, structure, and management.
- Articles of Association (AOA)
- Internal regulations of the company, including voting rights, quorum requirements, and dividend distribution.
- Power of Attorney
- If applicable, appoint a power of attorney to handle the registration process on behalf of the shareholders.
- Lease Agreement
- Document specifying the terms of the office space lease.
- Proof of Identity
- Passport or national ID card for each shareholder.
- Proof of Address
- Utility bill or bank statement for each shareholder.
- No-Objection Certificate (NOC)
- Required for UAE national shareholders from their employer.
- Trade License
- Official document from the DED or Free Zone Authority allowing the company to operate.
Practical Steps Involved in Company Formation in Sharjah
Establishing a company in Sharjah involves several practical steps, from determining the business activity and structure to obtaining the necessary licenses and approvals. Whether you choose to set up in the mainland or a free zone, understanding these steps and preparing the required documents will ensure a smooth and efficient process. For expert guidance and support, consider partnering with a company formation specialist to navigate the complexities of business setup in Sharjah.
Choose the Appropriate Business Structure
- Sole Establishment: Ideal for single owners who want full control over the business.
- Limited Liability Company (LLC): Common for partnerships, offering liability limited to the amount invested.
- Partnership Company: Suitable for two or more partners with liability limited to their shares.
- Public/Private Shareholding Company: Suitable for larger investments with share capital divided into tradable shares.
Decide on Mainland vs. Free Zone
- Mainland: Allows business operations across the UAE and requires a local sponsor who holds 51% of the company shares.
- Free Zone: Offers 100% foreign ownership, tax benefits, and no customs duties, but limits business activities to within the free zone or outside the UAE.
Find a Local Sponsor (if applicable)
- For mainland businesses, a local sponsor (UAE national) is mandatory. The sponsor will hold a 51% stake but can be compensated with a fixed annual fee instead of profit sharing.
Register the Company Name
- Choose and register your company name with the Department of Economic Development (DED). Ensure the name adheres to UAE naming conventions and does not contain religious references.
Draft the Memorandum of Association (MOA)
- Prepare the MOA, detailing the company’s objectives, capital, and ownership structure. This document must be notarized.
Lease Agreement
- Secure a physical office space or a virtual office (for certain Free Zones) and sign a lease agreement. This is required for the trade license application.
Apply for the Trade License
- Submit the required documents to the DED (for mainland) or relevant Free Zone Authority. These documents typically include the MOA, lease agreement, and proof of identity and address for all shareholders.
Obtain the Establishment Card
- Apply for an establishment card through the Immigration Authority. This card validates your company’s information and is necessary for visa processing.
Visa and Work Permits
- Apply for entry visas and work permits for yourself and your employees through the Ministry of Labor. This involves medical tests, visa stamping, and obtaining a residency permit.
