Setting Up business in Sharjah

Being the third largest of the seven emirates, which form the United Arab Emirates, Sharjah, is located on the Arabian Gulf in the West and the Gulf of Oman & the Indian Ocean in the east, offering the investor the best of both the worlds. Sharjah is the only Emirate to have land on both, the Arabian Sea and the Indian Ocean. Sharjah encourages the flow of investments in various production and service sectors.

Emphasis is given to cementing the mutual forward and backward linkages between the different sectors, whereby the inputs and outputs of each sector would be utilized adequately to serve and enhance the growth of other sectors. The government welcomes foreign investments in the fields of manufacturing industries, trade, tourism, financial services and transport. In its drive to diversify the economy and source of income, Sharjah gives continued and active support to the industrial sector as an inherent component of its policy. The Emirate concentrates and understands the role of private sector that accelerates the contribution to the national economy. Priority is allotted to project proposals that are capital intensive, utilize sophisticated technology, use locally available raw materials and are environment friendly.

Sharjah encourages the flow of investments in various production and service sectors. Emphasis is given to cementing the mutual forward and backward linkages between the different sectors, whereby the inputs and outputs of each sector would be utilized adequately to serve and enhance the growth of other sectors. The government welcomes foreign investments in the fields of manufacturing industries, trade, tourism, financial services and transport. In its drive to diversify the economy and source of income, Sharjah gives continued and active support to the industrial sector as an inherent component of its policy. The Emirate concentrates and understands the role of private sector that accelerates the contribution to the national economy. Priority is allotted to project proposals that are capital intensive, utilize sophisticated technology, use locally available raw materials and are environment friendly.

Procedure for Licensing in Sharjah:

Sharjah Economic Development Department with the joint participation of Sharjah Chamber of Commerce & Industry and Sharjah Municipality is the authority to issue a license to set up a project in the Emirate of Sharjah. Investment in Sharjah is based on a legal and organizational framework of the distinct applications. Accordingly, licenses are issued under the following legal and organizational frameworks:
1.Licenses as per the Federal Framework  discussed at the beginning of this book
2.Licenses as per the Regional Framework and ministerial decision applicable to GCC citizens
3.Licenses as per the administering of laws and local orders issued by HH the Ruler of Sharjah
4.Practicing professions and crafts by non-citizens according to the local order No. 1/1991

As per this law, non-citizen of UAE can practice professions and crafts within the following bounds:

• Sole Establishments, provided that the number of employees in the establishment does not exceed five.
• Civil Companies organized by Federal Civil Transactions Law No. 5/1985 article 683-690.
  

This relates to a company where two or more persons agree to undertake a work and guarantee such work, against an accepted wage. They may also jointly or severally distribute the work among them, ensuring harmony in operations. Both the sole establishment and the civil company should appoint a local service agent who will not be financially liable to them. These organizations’ name shall not be registered in the Commercial Register of the Ministry of Economy and Planning. However, as per the article (9) of the local order the licensing authority should observe the federal law on granting licenses for certain categories of the professions and craft.
Practicing activities by non-citizens according to the local order No. 1/1992 (100% Foreign Ownership Establishments).

Commercial Activities

Non-local people are allowed to practice commercial activities through individual establishments with a local service agent. The application to practice a commercial activity through individual establishment needs joint approval of Municipality, Chamber of Commerce and Economic Development Department.
Industrial Activities
The above said local order allows non-local people to practice industrial activities through an individual establishment and a local service agent, provided the following conditions are met:

• The industrial project will not be subject to the provisions of Federal Industrial Law No. 1/79
  
• The project should have high technology and serve the industrial development goals of Sharjah.
  
• A preliminary viability study for the project should be submitted to the licensing committee.
  

Agricultural Activities
The local order allows non-citizens to embark on agricultural projects on the following conditions:

• The project should achieve the general goal of agricultural reclamation with careful utilization of availing water resources.
  
• The project should increase agricultural and animal production.
  

In the above case also the establishment should have a local service agent.
Investment privileges in Industrial Sector:
The Sharjah Government has developed 17 industrial zones - executed by the Sharjah Chamber of Commerce and Industry - to give an extra boost to the development of industry and to encourage industrial investors. This has resulted in a tailor-made model industrial zone with state-of-the-art facilities, infrastructure and utilities. It has been set up west of the city, covering 26 sq. Kms. with 2,649 individual plots of between 10,000 and 20,000 sq. ft. An ideal location with first-class road links to Sharjah’s air and seaports. There is an efficient drainage system and the excellent power and water supplies are subsidized by as much as 70%. As the SCCI is a non-profit organization, plots can be purchased at cost price. The Chamber offers technical advice and assistance in the preparation of preliminary viability studies. The Chamber has also established the Industrial Development Department, which assists in the operational stage by conducting field studies and assessing progress. The Department also assists in full capability production and advises on ways and means of overcoming difficulties.

• The Government of Sharjah is committed to providing the infrastructure for the expansion of all industrial activity.
• This industrial area represents 40% of the total land area of Sharjah. It includes manpower-housing areas and is linked by a modern road network to air and seaports.
• Industrial production costs including that of manpower wages, cost of living and accommodation, are 35% less than they are in the other Emirates. Power and water are also subsidized to an extent of 70% by the Government.
• Locally manufactured products are given a pricing margin of 10% if they are of the same quality and competitiveness as similar imported products.
• Sharjah applies international specifications and standards in respect of its product classifications. Thus investors find it easy to export and sell goods of internationally recognized quality.

EMIRATES INDUSTRIAL CITY (EIC)\