DO BUSINESS, GO SHARJAH

UAE, Sharjah 2017 | EXECUTIVE GUIDE | REVIEW: LEGAL

With a specifically designed framework to streamline the entrance process, Sharjah is working hard to attract foreign companies looking to take advantage of its attractive business proposition.

Sharjah has become an increasingly attractive destination within the UAE for investors and foreign companies. In the recent past it has seen a tremendous influx of foreign investment and is still opening its arms to new investment opportunities. As a result of a concerted effort from legislators to promote a free market business environment, Sharjah has become one of the fastest developing areas and has managed to attract a number of foreign companies to its specially designed free zones. The Sharjah Economic Development Department (SEDD) is an umbrella organization that takes over the planning and implementation of economic development projects. Part of its role is to plan and issue commercial, industrial, and service licenses, as well as other permits that enable foreign companies in the setup of their business in the Emirate.

Doing business under the rules of SEDD

Investors and foreign companies choosing to do business under the rules of the SEDD should consider the following conditions:
As per the new commercial companies law No.2 of 2015, any company intending to be incorporated in the Emirate must have a national partner and the share for the nationals should not be less than 51% of the capital. The rules also require the investor to hold a specific certificate relating to the activity that the company intends to conduct. The SEDD website offers an online review of all of the different types of licenses to help potential investors estimate the charges for various types of business.
Sharjah Free Zones
Sharjah's government continues to establish new free zones, and three zones are already well established. These free zones provide territories within Sharjah for companies to conduct business without governmental interference. Companies within these three zones can be 100% foreign-owned, have 100% repatriation of capital and profits, and are exempt from all commercial levies and benefit from 100% import and export tax exemption, as well as 100% corporate and income tax exemption. Sharjah's free zones have become major destinations for international corporate expansion because of their favorable legal and economic structures. A number of international companies have established their headquarters in the free zones, illustrating the benefits they offer investors.
Hamriyah Free Zone Port
Hamriyah Free Zone is the second-largest free zone in the UAE and hosts financial services institutions and commercial firms, including professional services companies, global corporate management offices, and retailers. The procedures for establishing a company are streamlined, and it is possible to obtain a license within 24 hours of submitting all of the required documents. Hamriyah Free Zone gives priority to the small and medium enterprises (SME) sector.
Sharjah Airport International Free Zone
Sharjah Airport International Free Zone was established in 1995 and today is home to more than 6,500 companies. This free zone provides the investors different kinds of licenses, including but not limited to industrial, general trading, and commercial licenses. The minimum fees for establishing business in Sharjah Airport International Free Zone will be around AED35,000 and minimum capital should be AED150,000. The advantage of establishing a company in Sharjah Airport International Free Zone are 100% income tax exemptions, 100% exemption of import and export taxes, simple procedures for transferring funds, and the issuance of licenses within 24 hours of submitting the correct documentation.

USA Regional Trade Centre (USARTC)
The USARTC free zone was established in 2011, and aims to provide distinguished services for US companies interested in setting up a business in the UAE. The USARTC is on Al Taawun Road, adjacent to Expo Centre, helping US companies, and SMEs in particular, to develop their activities and business in Sharjah and the UAE generally. The USARTC also provides inclusive services for its clients, such as business registration, licensing, and visa processing for businesses maintaining 100% corporate ownership, as well as the opportunity to repatriate all profits and capital. The USARTC provides different services including but not limited to logistics, setup of companies, international product exhibitions, and imports and exports.

Protect your trademark and brand
A company's trademark is the part of its business that connects it to the outside world and its company's presence. It is therefore an important and valuable asset. So, as important as it is to select which legal framework suits one's business, it is more important to protect the trademark. In addition, the UAE is also an attractive destination for those people that have distinguished and brilliant ideas. These ideas also need to be protected through patenting. Therefore, as much as investors stand to gain the benefits of doing business in Sharjah, investors should not forget to protect their trademarks and ideas by registering their trademark, patents, and copyrights.

Legal Systems in the UAE
The legal system in UAE lends foreign investors, both individual and companies, confidence in the Emirate's competitive business environment given its history in attracting global investors to set up their business.
Investors can either choose to use the UAE courts, or can settle matters through the private legal system. Moreover, the UAE legal system has its own arbitration law, which is the most preferable choice for investors nowadays, as most investors choose the arbitration legislation system to settle their matters and cases. The UAE increasingly favors arbitration as a suitable mechanism for disputes, and the advantage of the arbitration system is that it is often faster.

New commercial company law
The New Commercial Companies Law was published in the Official Gazette on March 31, 2015 and came into effect on July 1, 2015. The new law amended the structure for companies and their types as well. Now, a company must have one of the following forms; partnership, limited partnership, limited liability, public joint stock, or private joint stock. The main change was in regard to the shareholder details. According to the legislation, the shareholders' mobile numbers and date of births must be included in the company documentation. The reform also increased the number of managers and directors needed in a limited liability company. In addition, the Memorandum of Association must also now list branches that the company has. Due to the length of time it takes to implement these changes, the law gives a grace period until June 2017 for all companies affected to implement these changes in accordance with the new legislation.

Conclusions
Doing business either in one of Sharjah's free zones or under the umbrella of the SEDD can have tremendous advantages for companies. Sharjah offers the opportunity to establish a strong presence in a critical geographic area, as well as a highly favorable business climate. Companies looking to do businesses in Sharjah have several options available to them. Finally, our law firm, Al Farouk Legal, is here to offer support and assistance to all kinds of investors considering opening a business in Emirate of Sharjah. Feel free to get in touch with us for any further information.