Sharjah is an increasingly attractive center for international business with high levels of infrastructure and the non-application of neither VAT nor income taxes, which have attracted many businesses to its borders.
Following years of proactive governance and a drive to support particular industries, Sharjah has gained a reputable status internationally. It is famous for its museums and care of cultural artifacts, as well as its special attention paid to education and healthcare facilities, both often performing at international standards. The American University of Sharjah, for example, has an enrollment rate of 5,600 undergraduates from 90 countries. Sharjah’s stability politically and economically continues to support growth trends. This, supported by a robust and investor friendly legal framework, has resulted in an environment that is conducive to both the SME entrepreneur and the multinational. This means that, especially when compared to other Emirates, Sharjah has a highly diversified economy.
It has over 45,000 SMEs, and GDP regularly grows at over 10%. GDP per capita has also increased in recent years, growing 50% between 2005 and 2009.
In terms of industry, Sharjah is an attractive place to do business. It consists of over 20 industrial areas, home to a wide variety of industries such as steel manufacturing, petrochemicals, and many others. What makes the Emirate even more attractive is its impressive maritime infrastructure, with the three ports of Port Khalid, Hamriya Port, and Khor Fakkan Port. It is also the only Emirate that is linked to all seven Emirates. This network is complemented by Sharjah International Airport, the first airport in the UAE, and one that is well known for its passenger airlines, including private jets and cargo services.
Starting up in Sharjah
Registering companies in Sharjah is done via the Economic Department, which offers seven different types of license. The most common types of companies are limited liability companies and individual establishments. There are certain fields that may require a special approval, and some type of licenses cannot be 100% owned by non-Emirati nationals. In such a case a partnership is established between a UAE national and the foreigner, otherwise free zones provide another solution. As part of the Companies Law, there is a 51% national ownership restriction. One piece of advice for investors is to take out long-term leases instead of ordinary rental agreements, as tenants in long-term leases enjoy more protection in accordance with the rental laws of Sharjah. Onshore investments are required to pay 5% customs duties and 5% municipal tax, but otherwise have no income tax requirements. Another advantage is that Sharjah has a lower minimum capital requirement than other Emirates, at AED150,000.
Sharjah’s free zones offer 100% freehold ownership for foreigners, 100% repatriation of capital and profits, exemption from import and export duties, as well as no income tax. Investors are able to set up either an onshore company through the Economic Development Department, or a Free Zone company. These free zone companies are able to operate at either the Hamriyah Free Zone or the Sharjah Airport International Free Zone.
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