How to Start a Business in Sharjah: The Complete Guide
The industrial hub of UAE – Sharjah has a growing demand among foreign businesses. It is one of the famous Emirates of the UAE. With accessibility to the Persian Gulf, it is considered a strategic location for any business. Also, it allows 100% foreign ownership in more than 1,000 business activities. So, setting up a company in Sharjah would be a wise decision for any entrepreneur. But the confusion people have is how to start a business in Sharjah.
Business Setup HQ will tell you all about how to start a business in Sharjah. We provide you with a complete guide on setting up a company in Sharjah. We also cover the benefits of having your business operations in Sharjah and the essential Dos and Don’ts.
How to Start a Business in Sharjah: An Overview
Sharjah is the cultural capital of the UAE. It is a diversified economy with investments in many oil and non-oil sectors. Manufacturing, real estate, mining, energy, and wholesale and retail trade are some of the primary sectors contributing to its growth. Many industrial areas and free zones add to the Emirate’s attractive quotient.
Sharjah has a business-friendly environment owing to cooperation between the private sector and government. It has a strategic location, being a gateway to 160 countries. The presence of many seaports, airports, world-class infrastructure facilities, and modernization initiatives makes it a global business hub.
Some of the critical sectors attracting investments include tourism, advanced manufacturing, logistics, healthcare, agri-food technology, and Greentech. It is also announcing initiatives in human capital empowerment to contribute to the growth of other sectors.
All these advantages of Sharjah make it an attractive destination for businesses. Prospects for growth are also high. So, it is high time you must consider forming a company in Sharjah. And if you need help, read the blog below to learn about every aspect of how to start a business in Sharjah.
Business Setup HQ is a leading provider of business setup services in the UAE. We provide all kinds of support in arranging documents, checking eligibility, selecting structures and licenses, and finding an office.
Let’s first start with understanding the critical things before starting a business in Sharjah.
Things to Know Before You Start a Business in Sharjah
Before you form any business in any city, you must be aware of certain things to avoid making errors. These are your options for setting up your business in that city. For Sharjah, these include options of:
- Setting up a mainland or free zone company
- Type of legal structures possible
- License types
Whether You Should Start a Company in Sharjah Free Zone or Mainland?
A mainland company in Sharjah is an onshore entity with no restrictions on conducting business across and outside the country. DED issues trade licenses to such companies. For some business activities, you need to find a UAE national as a partner or a local sponsor. The approvals, visa restrictions, and capital requirements depend on the type of legal structure you select.
A free zone company in Sharjah is registered in a free zone of Sharjah. Foreign investors can hold 100% of such companies. You cannot do business with the UAE market, but it is possible through local distributors. For every free zone in Sharjah, the approvals, capital prerequisites, and visa requirements differ and are less restrictive in nature.
Different Types of Company Legal Structures Allowed in Sharjah
Sharjah allows investors to form any of the following types of legal structures:
- Partnership company – Two or more individuals form a partnership company in mainland Sharjah. The partners share business liabilities based on their shareholding. Only UAE nationals can form a partnership company.
- Limited liability company – It is a company with the minimum and maximum number of partners as two and 50, respectively, and their liability depends on their shareholding. You can form an LLC only in mainland Sharjah. 100% foreign ownership is allowed in LLC.
- Branch of a foreign, GCC, or local company – It is a branch of a foreign company, a GCC company, or a local company in any other Emirates. You can form a branch office in the free trade zone or mainland Sharjah.
- Sole proprietorship firm or local services agent – It is a natural person running a business. The owner holds the liability and financial obligations. If such an establishment is UAE/GCC citizen-owned, it does not require a local service agent. Foreign entrepreneurs must appoint a local service agent (LSA) to start a sole proprietorship business in Sharjah. LSA is a natural person with UAE citizenship with no shareholding in the company.
- Public/private joint stock company – Tradeable shares of equal value form the share capital of a public/private shareholding company. Based on their share capital, each partner holds proportionate liability in the company.
- Sharjah Free Trade Zone Company – A free zone company is an LLC with more than one shareholder and limited liability. 100% foreign ownership is possible in such companies.
- Free zone establishment – A firm with a single shareholder formed in a free zone in Sharjah. An individual or a corporate entity is the single shareholder of such a company, which has independent financial liability.
Types of Licenses in Sharjah
The different types of licenses possible for businesses in Sharjah mainland are:
- Commercial license – It allows business activities of distribution, storage, import-export, consolidation, and warehousing of specified goods. If you have a regular commercial license, you can trade only in a specific product line. If you have a general trading license, you can trade in diverse product lines distinct from each other. It allows 100% foreign ownership in specific activities.
- Service license – It is a license for professional services, such as consultancy, accounting, and others. To obtain this license, you must have relevant qualifications, pass examinations, and have expertise in the said skill.
- Industrial license – Industrial license is for activities such as oil and gas, manufacturing, electricity, mining, and others. You need to get approvals from many authorities for conducting such activities like the Ministry of Economy and Commerce, Ministry of Labor, and many more. Only after these approvals can you apply for an industrial license.
Sharjah free trade zones have similar licenses for trading, general trading service, and industrial. An additional license permitted by Sharjah free trade zones is an e-Commerce license. It allows you to use the online platform to buy and sell goods and/or services.
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How to Start a Business in Sharjah: Business Setup Complete Process
You want to establish your business in Sharjah, and know the prerequisites. Now, you need to go through the process of business setup. We guide you through each step of the process.
But you must know the type of business activity you would engage in. You have the option of 3,000 business activities to choose from. These are classified into different types of licenses. If you select an activity falling into two types of licenses, the dominant activity rules the decision of license type.
Deciding Where Would You Like to Start Your Company in Sharjah
The first question is whether you want to establish your company in a free zone or mainland Sharjah. You must weigh the pros and cons and decide this factor. For this, you must analyze your business requirements, the pros and cons of mainland vs. free zone, and trends in your industry vertical.
What would be the company's legal structure?
Determine the legal structure for your establishment. This factor considers your chosen:
- Business activities
- Company type
- Number of partners
- Nationalities of partners
- Share percentage of partners
Choose the Company Name
You must select a trade name based on the license you select and the type of business activity you engage in. The trade name must be in Arabic, unique, and not used for an entity in a similar activity. The trade name must be consistent with your business activity. Keep at least two possible trade names in the option in order of preference.
You must book this name with the Sharjah Economic Development Department (SEDD) through an initial approval application.
Prepare MoA, AoA, and LSA Agreement Documents
Based on the selected legal structure, you must prepare the Memorandum of Association and Article of Association, and get relevant signatures on them. You must also appoint a local service agent and prepare an agreement document.
Get an Office Location
You must select and assess the possible locations. Compare these locations with the rules by SEDD or relevant free zone authority. You need to submit a technical evaluation request, based on which inspectors will evaluate your site to check compliance with rules. You must mention all the location data on the license application form.
For the approval of the company site, you must submit the site map and title deed, and the fee amount.
Obtain External Approvals
You must also get approvals from external authorities and organizations, if needed. These can be authorities for the labor department and industry-specific authorities.
For setting up a company in Sharjah, you must have the following documents ready:
- The filled-out application form
- Business plan
- A copy of your Emirates ID in case of a UAE national
- A copy of your passports, visas, residence proof, and a no-objection certificate
- MoA and AoA, notarized and attested
- Bank reference letters
- Approvals from relevant authorities
- Feasibility report
- Fees amount
- In the case of foreign companies, board resolution
Make Payment, Submit Documents, and Obtain License
You must submit the application form once you get all the external approvals and have determined the name, location, legal structure, and license type. Pay the relevant fee amount and attach all the specific documents.
SEDD or relevant free zone authority examines the documents and processes the license.
Benefits of Starting Your Own Business in Sharjah
We know Sharjah attracts you because of the various benefits it provides you with. Besides lower taxes, 100% repatriation of profits and capital, and 100% tax exemption for import and exports, it provides many other advantages. Let’s explore them one-by-one:
Sharjah has a prominent location in UAE, next to Dubai. Such remarkable connectivity with the rest of the world makes business travel and operations easier. With proximity to the Indian Ocean and Arabian Gulf, it is considered a major business hub.
You can find world-class, modern infrastructure here. Sharjah has the largest cargo hub in the world. It has its own airport and seaport for the necessary trading with foreign countries. The maritime, shipping, and related sectors are pretty well-developed, helping you with associated infrastructural support. The banking and communication infrastructure is top-notch in Sharjah.
With a rich availability of water and electricity, you have easy access to resources needed to operate a company. Your daily production activities need these resources, which are in ample amounts in Sharjah.
Sharjah Economic Development Department (SEDD) launched a full ownership policy in 2021. More than 1200 business activities allow foreign investors to completely own their business. You need not appoint a local sponsor, except if you deal in
- Security and defence activities
- Banks, finance and insurance companies, and houses
- Telecommunication, radio, and TV broadcasting stations
- Holy Quaran centres
- Fisheries and related businesses
- Banknotes printing business
- Hajj and Umrah services
The cost of living is low in Sharjah. This is because utilities, education, and transportation are affordable, adding to your convenience. Also, it is not as crowded as Dubai and Abu Dhabi. So, you get a less competitive environment. It is a hub of some of the region’s best educational institutions. So, you can take advantage of this for your family members.
Sharjah government supports foreign investment with some investor-friendly policies in business. It has also implemented an advanced legal framework to help the formation of businesses. It encourages entrepreneurs to set up new businesses through initiatives such as free zones, industrial areas, and funding programmes.
With all these details in hand, what are you waiting for?
Take the first step to a successful business in Sharjah.
Do's and Don'ts of Starting a Business in Sharjah
With all these details on procedures, documentation, and decisions, you are all set to start your operations in Sharjah. But you must be wary of some of the potential risks that can occur in any new city. So, before jumping into the new business bandwagon, follow the following best practices:
- Picking the right jurisdiction for your business is not a straightforward decision. Know your priorities, expectations, and future growth plans. Based on this, decide whether to establish a mainland or free zone company.
- Research well to understand the present and possible future conditions for your business. You must know where the Emirate of Sharjah is headed and the potential compliance requirements and benefits.
- It is better to hire a company formation expert in Sharjah. They have better knowledge of the rules and have expertise in handling such administrative work. They make the process of obtaining a license and starting a business hassle-free, seamless, and smooth.
Start Your Business in Sharjah With Business Setup HQ's Support
You have all these details ready with you. But a simple, small error can cost a considerable loss of time, effort, and money. So, the best action is to hire a company formation specialist. And Business Setup HQ is one such reliable company.
We are a distinguished company in the field of business setup services in the UAE. We can help you at every stage of the procedure explained above. Your selection of the license, legal structure, trade name, and business location gets complete assistance from us. Our business analysts make the journey of setting up a business smoother.
As one of the best business setup consultants, you get the guidance, professional advice, and expertise to set up your business in Sharjah. You get timely, cost-effective, and quality expertise in the business setup. We provide consulting and business advisory services to analyze your idea and recommend the best company setup so that you succeed.
How to Start a Business in Sharjah: Frequently Asked Questions
For setting up a small business in Sharjah, you need to select the legal structure, license type, and base in the mainland or free zone of Sharjah. Once you decide on these aspects, you must determine possible trade names, prepare all documents, and submit the application form. You get your trade license within a few days. After that, you must get an employee visas and open a bank account. Now, you can start your small business operations.
Based on your selection of forming a company in the mainland or free zone of Sharjah, your cost differs.
The cost differs in each free zone. Also, the cost depends on your legal structure, license type, and the number of visas. There are associated fees for each factor, along with a minimum share capital. Besides, you need to pay annual rent, annual license fees, and one-time registration fees.
For a mainland company formation, the cost depends on the same factors. You need to bear the following costs for a mainland Sharjah company:
- Trade name approval
- Office rent
- Attestation of necessary documents
- Annual fees
Without a residence visa, it is possible to start your own business in Dubai. But you need a UAE business visa for company operations. Without a business visa, you cannot conduct business activities in Dubai.