Setting up a business in Sharjah Free Zones
Setting up a business in Sharjah Free Zones (SFZs) are a popular choice for businesses looking to set up shop in the United Arab Emirates (UAE). They offer a number of advantages, including tax-free status, simplified regulations, and foreign ownership.
The process of setting up a business in Sharjah Free Zones is relatively simple and straightforward. There are over 30 free zones in Sharjah, each with its own unique advantages and disadvantages.
Once you have chosen a free zone, you will need to register your business with the free zone authority.
The cost of setting up a business in Sharjah Free Zones varies depending on the free zone and the type of business. However, it is generally a cost-effective option for businesses looking to operate in the UAE. The cost of setting up a business in Sharjah Free Zones can be significantly lower than setting up a business in the mainland UAE, making it an attractive option for foreign investors.
Process of setting up a business in Sharjah Free Zones
Sharjah has several free trade zones that allow foreign ownership of companies. The process of setting up a business in Sharjah Free Zones:
- The first step is to choose which free zone you want to set up your business in, such as Sharjah Airport International Free Zone (SAIF Zone) or Hamriyah Free Zone. Each zone has different licensing requirements and infrastructure.
- Next, you will need to apply for approval from the zone and obtain a trade license. This requires submitting documents like your business plan, ownership information, feasibility studies, and paying licensing fees. Once approved, you can apply for visas for employees, rent office/warehouse space, and open bank accounts in the UAE. You’ll also need to register with the Department of Economic Development and fulfill any other legal requirements. Ongoing, you must comply with regulations, renew licenses annually, file taxes, and work with a local service agent. Getting professional help from auditors, PROs, and consultants can smooth the setup process.
Requirements for Setting Up a Business in Sharjah Free Zones
The requirements for setting up a business in Sharjah Free Zones depend on the specific zone but generally include:
- Obtaining a trade license
- Having office/warehouse space
- Hiring a local service agent
- Securing visas for staff
The documentation required includes your business plan, ownership details (like passports if owners are individuals), reference letters, and bank statements. The business activity must be approved and fit the scope of the free zone. The company needs at least 2 shareholders and directors. The minimum capital requirement ranges from AED 50,000 to AED 500,000 depending on the zone and activity. Other common requirements are audited financial statements, feasibility studies, and legal forms. You’ll need to provide attested documents, signed Arabic translations, and copies of educational certificates for owners and managers. Ongoing requirements involve renewing licenses annually, maintaining adequate office space and capital levels, filing annual returns, and using your local service agent for legal purposes.
Process for Setting Up a Business in Sharjah Free Zones
The step-by-step process for setting up a businessin Sharjah Free Zones:
- Choose the right free zone for your activity and obtain pre-approval: Sharjah offers several free zones, including Sharjah Airport International Free Zone (SAIF Zone), Hamriyah Free Zone (HFZ), and Sharjah Publishing City Free Zone (SPCFZ). Each free zone caters to specific industries, so research and identify the one that aligns with your business activity.
- Reserve a trade name and submit license application to the zone.
- Obtain approval and pay license fees. Sign lease for office/warehouse space.
- Apply for establishment card and file company documents with the zone to form the legal entity.
- Submit visa applications for shareholders, directors, and employees.
- Register with the Ministry of Human Resources and Social Development.
- Register for taxes and obtain signage and other permits.
- Set up company bank accounts and transfer capital.
- Hire a local service agent to support ongoing legal compliance.
- Obtain final license and commence operations!
The process takes 2-4 weeks on average and requires working closely with the zone and consultants. You must maintain legal compliance to continue operating in the free zone.
Taxes for businesses in Sharjah Free Zones
One of the main attractions of setting up a business in Sharjah Free Zones is the tax-free status. Businesses operating in Sharjah Free Zones are not subject to corporate income tax, personal income tax, or value-added tax (VAT).
However, there are taxes for businesses in Sharjah Free Zones may be subject to. These include:
- Customs duties: Businesses importing goods into Sharjah Free Zones may be subject to customs duties.
- Land and property taxes: Businesses owning land or property in Sharjah Free Zones may be subject to land and property taxes. The rate of land and property tax depends on the location of the land or property.
- Service fees: Businesses operating in Sharjah Free Zones may be subject to service fees. These fees are typically charged for services such as garbage collection and sewage treatment.
The amount of taxes for businesses in Sharjah Free Zones is subject to will depend on a number of factors, including the type of business, the location of the business, and the amount of income or profits generated by the business.
It is important to note that the tax laws in Sharjah Free Zones are subject to change. It is advisable to consult with a tax advisor to ensure that you are aware of the latest tax laws and regulations.
Tips for setting up a business in Sharjah Free Zones:
- Keep good records: It is important to keep good records of all financial transactions. This will help you to comply with the tax laws and regulations.
- Declare all income: Businesses operating in Sharjah Free Zones are required to declare all income, even if it is tax-exempt.
- Pay taxes on time: Businesses are required to pay taxes on time.
By following these tips, businesses can ensure that they are compliant with setting up a business in Sharjah Free Zones.
If you are ready to take the next step and set up your business in Sharjah Free Zones, Ahmed Mahfoudh Chartered Accountants & Auditors can help. We have a team of experienced professionals with a deep understanding of the UAE business environment. We can help you with everything from choosing the right free zone to registering your business and obtaining the necessary licenses and permits.
Here are some other services that we offer:
- Accounting and auditing
- Legal advice
- Business advisory services
- Tax planning and compliance
Contact us today to learn more about how we can help you setting up a business in Sharjah Free Zones.