Sharjah

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Business and Economy

Sections

1. Tax Benefits

Sharjah, like the rest of the UAE, offers a highly favorable tax environment for businesses:

  • No Corporate Tax: As of October 2023, there is no corporate tax on most businesses, except for multinational corporations earning over AED 375 million annually, which are subject to a 9% corporate tax under the UAE's new tax regime.
  • No Personal Income Tax: Individuals, including business owners, are not subject to personal income tax.
  • No Withholding Tax: There are no withholding taxes on dividends, royalties, or interest payments.
  • No Value-Added Tax (VAT) on Exports: While VAT is set at 5% for most goods and services, exports are zero-rated, making Sharjah an attractive base for international trade.

2. Business Incentives

Sharjah provides a range of incentives to attract foreign investment and support local businesses:

  • 100% Foreign Ownership: Businesses in free zones and certain mainland sectors can enjoy full foreign ownership, eliminating the need for a local sponsor.
  • Repatriation of Profits: Companies can repatriate 100% of their profits and capital without restrictions.
  • Low Operating Costs: Compared to Dubai and Abu Dhabi, Sharjah offers lower costs for office space, utilities, and labor, making it an affordable option for startups and SMEs.
  • Strategic Location: Sharjah is centrally located between Europe, Asia, and Africa, with excellent connectivity through its ports and airports, including Sharjah International Airport and Port Khalid.

3. Costs of Setting Up a Business

The cost of setting up a business in Sharjah depends on the type of business structure and location (mainland or free zone). Below is a breakdown of typical costs:

  • Business License Fees: Starting from AED 5,000 annually, depending on the business activity.
  • Office Space: Free zones offer flexible options, including virtual offices (starting at AED 10,000 annually) and physical office spaces (starting at AED 15,000 annually).
  • Visa Costs: Investor visas typically cost AED 3,000–5,000, while employee visas range from AED 2,000–4,000 per person.
  • Registration Fees: Initial registration fees for free zones range from AED 9,000–15,000, while mainland businesses may incur additional costs for local sponsorship (if required).
  • Other Costs: These include legal fees, notarization, and attestation of documents, which can range from AED 2,000–5,000.

4. Free Zones in Sharjah

Sharjah is home to several free zones that cater to different industries and business needs. These zones offer streamlined processes, tax exemptions, and other benefits:

  • Sharjah Airport International Free Zone (SAIF Zone): Ideal for logistics, trading, and manufacturing businesses. Offers quick setup, warehousing, and access to Sharjah International Airport.
  • Hamriyah Free Zone (HFZ): Known for its industrial focus, HFZ is ideal for heavy industries, oil and gas, and manufacturing. It offers large plots of land and pre-built warehouses.
  • Sharjah Media City (Shams): Tailored for media, creative, and technology businesses. Shams offers affordable packages, including virtual offices and freelance permits.
  • Sharjah Research, Technology, and Innovation Park (SRTIP): Focused on innovation and technology, SRTIP supports startups and research-driven businesses in sectors like renewable energy, water technology, and artificial intelligence.

5. Government Support

The Sharjah government actively supports businesses through various initiatives and programs:

  • Sharjah Investment and Development Authority (Shurooq): Shurooq promotes investment opportunities in Sharjah and provides guidance to investors. It focuses on sectors like tourism, healthcare, logistics, and education.
  • Ease of Doing Business: Sharjah has streamlined its business registration and licensing processes, with many services available online through the Sharjah Economic Development Department (SEDD).
  • SME Support: Programs like the Sharjah Entrepreneurship Center (Sheraa) provide mentorship, funding, and networking opportunities for startups and SMEs.
  • Incentives for Emiratization: Companies hiring UAE nationals may receive government subsidies and other benefits.

6. Local Considerations

When doing business in Sharjah, it is essential to understand the local culture, regulations, and market dynamics:

  • Cultural Sensitivity: Sharjah is known for its adherence to Islamic values and traditions. Businesses should respect local customs, including dress codes and working hours during Ramadan.
  • Workweek: The UAE follows a Monday-to-Friday workweek, with Friday being a half-day for many businesses to accommodate Friday prayers.
  • Language: While Arabic is the official language, English is widely used in business and legal transactions.
  • Regulatory Compliance: Businesses must comply with UAE labor laws, environmental regulations, and industry-specific standards.
  • Networking: Building relationships and trust is crucial in Sharjah’s business culture. Participating in local events and trade shows can help establish connections.

7. Key Sectors for Investment

Sharjah offers opportunities across a range of industries, including:

  • Logistics and Trade: With its strategic location and world-class ports, Sharjah is a hub for import/export businesses.
  • Manufacturing: The emirate is a leader in industrial production, particularly in sectors like plastics, textiles, and machinery.
  • Tourism and Hospitality: Sharjah’s rich cultural heritage and eco-tourism initiatives make it a growing destination for tourists.
  • Education and Healthcare: Sharjah is home to several universities and healthcare facilities, offering opportunities for investment in these sectors.
  • Technology and Innovation: With initiatives like SRTIP, Sharjah is positioning itself as a hub for tech startups and research-driven businesses.

8. Advantages Over Other Emirates

  • Cost-Effectiveness: Sharjah offers lower costs for office space, labor, and utilities compared to Dubai and Abu Dhabi.
  • Family-Friendly Environment: Sharjah is known for its focus on family values and quality of life, making it an attractive destination for expatriates.
  • Proximity to Dubai: Sharjah’s close proximity to Dubai allows businesses to access Dubai’s markets and infrastructure while benefiting from Sharjah’s lower costs.

Conclusion

Sharjah is an excellent destination for businesses looking to establish a presence in the UAE and the wider MENA region. Its tax-friendly policies, strategic location, affordable costs, and government support make it a competitive choice for entrepreneurs and corporations alike. By leveraging the emirate’s free zones, incentives, and infrastructure, businesses can thrive in this dynamic and culturally rich environment.