A Comprehensive Guide to Setting Up a Business in Sharjah Mainland

How to setup a business in Sharjah, Company formation in Sharjah

Sharjah is a vibrant emirate in the United Arab Emirates located just a short drive from Dubai, offers a compelling environment for businesses seeking a strategic location and cost-effective operations. Establishing a company on the mainland in Sharjah provides several advantages, including access to the wider UAE market and relatively lower startup costs compared to Dubai.

Choosing the Right Business Structure

The first crucial step in setting up a business in Sharjah Mainland is to determine the most suitable legal structure. The available options include:

  • Sole Establishment: Ideal for solo entrepreneurs, offering complete ownership and control.
  • Limited Liability Company (LLC): Requires at least two shareholders and a maximum of 50. Each shareholder holds an equal stake.
  • Private Joint Stock Company: Suitable for companies with minority and majority shareholders, allowing for more complex ownership structures.
  • Public Joint Stock Company: Designed for businesses seeking to go public in the future.
  • Branch Office: A subsidiary of a foreign company, operating under the same business activity.
  • Representative Office: Similar to a branch office but without profit-making capabilities.

Understanding Trade Licenses

The type of business license you need in Sharjah Mainland depends on your specific activities. The three primary types of licenses are:

  • Industrial License: For manufacturing, processing, assembling, packaging, and other industrial activities.
  • Commercial License: For trading activities, including import, export, trading, and e-commerce.
  • Professional License: For individual entrepreneurs providing consultancy services, event management, investment services, and other professional activities.

Steps to Setting Up a Sharjah Mainland Company

  1. Select Business Activity: Determine the specific nature of your business to choose the appropriate license.
  2. Find a Local Sponsor: If you’re a foreign investor, you’ll need a UAE national as a local sponsor who holds 51% of the company shares.
  3. Obtain Necessary Documents: Gather the required documents for the trade license application, which may vary depending on your business activity.
  4. Reserve a Company Name: Submit three unique name options to the authorities. Avoid indecent words and names related to God in Arabic or English.
  5. Draft Memorandum of Association (MoA): Create a legal agreement outlining the company’s objectives, structure, and operations.
  6. Lease Office Space: Secure commercial premises in Sharjah and obtain a notarized lease agreement.
  7. Pay License Fees: Submit the required fees for obtaining the trade license.
  8. Apply for Establishment Card: Obtain an establishment card from the Immigration Authority.
  9. Obtain External Approvals (if applicable): Depending on your business type, you may need additional approvals from relevant authorities, such as the municipality for restaurants, coffee shops, education activities, or medical activities.
  10. Hire Employees (if necessary): Obtain work permits and entry visas for your employees through the Ministry of Labor.

Key Costs and Fees

  • License fees: AED 10,000 for LLCs or AED 5,000 for sole establishments
  • Rent: Minimum of AED 14,000 annually for LLC premises
  • Lease registration fee: 1% of annual rent
  • E-Aaredh fee: AED 300 (new premises only)
  • Trade name reservation: AED 500
  • Computer card: AED 200

Additional costs may include professional fees, utility deposits, document translation, and more.

Renewal, Cancellation, and Amendments

  • Renewal: Licenses must be renewed annually within two months of expiry.
  • Cancellation: To cancel a license, settle any outstanding fees or fines and submit a cancellation request.
  • Amendments: Notify the authorities of any changes, such as adding or removing partners, changing activities, or relocating.

FAQs

Q1: Can I operate from Dubai with a Sharjah license?

  • No, you need a separate Sharjah license to conduct business in Sharjah.

Q2: Are licenses open to all nationalities?

  • Yes, but foreign investors need a local sponsor.

Q3: Can I get a trading license if my office is in a free zone?

  • No, you need commercial premises on the mainland for general trading licenses.

Q4: Can I amend the license to include additional partners?

  • Yes, you can through amendment requests.

Q5: How long is the initial approval valid?

  • Initial approvals are typically valid for 60 days.

Q6: Can general trading licenses cover services?

  • No, pure service-based companies need professional or commercial licenses.

Q7: Are there restrictions on local service agents?

  • UAE nationals, GCC citizens, or UAE-based corporates can be local service agents.

Q8: Can people with investor visas apply directly?

  • No, they still need a local service agent.

Q9: Are there restrictions on goods traded?

  • Some goods may require additional clearances.

Q10: Can a freelancer apply for a license?

  • No, freelancers need commercial premises.

Q11: How can I expedite my application?

  • Appoint reliable PRO services for faster processing.

Q12: Can I operate before collecting the card?

  • No, you must have the physical license card.

Q13: Do I need an existing office to apply?

  • Yes, you need commercial premises.

Q14: Can I relocate to another emirate later on?

  • Yes, through amendments.

Q15: Where do I collect the original license?

  • Collect it from SEDD offices.

Q16: Can I surrender a license if the activities prove unviable?

  • Yes, you can cancel the license.

Additional Considerations

  • Research: Thoroughly research the specific requirements and regulations for your business activity in Sharjah.
  • Consultants: Consider hiring professional consultants to guide you through the setup process and ensure compliance.
  • Networking: Build relationships with local businesses and chambers of commerce to gain insights and potential partnerships.
  • Budgeting: Accurately estimate the costs involved, including fees, rent, and operational expenses.
  • Long-Term Planning: Develop a strategic plan for your business, considering growth, expansion, and market trends.

By carefully planning and following the outlined steps, you can successfully establish your business in Sharjah Mainland and capitalize on the emirate’s thriving business environment.

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