Getting a Sharjah mainland license is a pivotal step if you’re aiming to operate within the UAE’s dynamic economic landscape. The Sharjah Economic Development Department (SEDD) offers various types of licenses, including Commercial, Professional, and Industrial, each tailored to specific business activities. You’ll go through several key stages, from selecting a business activity and securing a local sponsor to registering a trade name and obtaining necessary approvals.
Knowing the associated costs, like government fees, sponsorship fees, and office rent, helps you budget effectively. Plus, a Sharjah mainland license offers numerous benefits— including access to a broader market, an attractive tax regime, and opportunities for business expansion.
Read on to learn the steps, costs, and advantages of securing a Sharjah mainland license, ensuring a smooth and successful mainland company formation.
Types of Licenses in Sharjah Mainland
Knowing the types of licenses available is important when considering establishing a business in Sharjah Mainland. The SEDD offers three primary types of licenses, each catering to different business activities and needs. These licenses provide flexibility in operating across the mainland region, unlike free zone licenses, which have more restrictions.
Commercial License
A Commercial License is essential for businesses engaged in trading activities. This type of license allows companies to import, export, and sell goods both within the UAE and internationally. It’s ideal for those dealing with tangible products and wishing to tap into the diverse markets of Sharjah and beyond. The flexibility of a Commercial License makes it a popular choice for entrepreneurs looking to establish a trading business in the region.
Professional License
For those providing specialised services, a Professional License is the appropriate choice. This license is designed for service-oriented businesses that require specific skills and expertise. Whether you’re offering consultancy, legal services, or any other professional service, this license allows you to operate legally within Sharjah Mainland. It’s particularly beneficial for individuals or companies that rely on their professional qualifications and experience to deliver their services.
Industrial License
If you’re involved in manufacturing or assembling products, you’ll need an Industrial License. This license permits all necessary activities for a manufacturing business, from production to selling the finished products. It’s suitable for companies planning to set up factories or production units in Sharjah Mainland. The Industrial License supports the growth of manufacturing sectors by providing the legal framework needed to operate efficiently and effectively.
Knowing these license types is the first step in setting up a business in Sharjah Mainland. Each license offers unique advantages and is tailored to specific business activities, ensuring that companies can operate smoothly and in compliance with local regulations.
Steps to Obtain a Sharjah Mainland License
Acquiring a Sharjah mainland license is a structured process that involves several key steps. This license, issued by the SEDD, allows businesses to operate within the mainland region of Sharjah, offering greater flexibility compared to free zone licenses. Here’s a detailed list of the steps involved in obtaining this license.
Choosing a Business Activity
The first step in obtaining a Sharjah mainland license is clearly defining the business activity you intend to pursue. The SEDD in Sharjah categorises business activities into three main types: Commercial, Professional, and Industrial. Determining the specific business activities your company will engage in is key— as you can include up to ten activities under a single license. This decision will influence the type of license you need and the subsequent steps in the licensing process.
Finding a Local Sponsor
For non-GCC nationals, securing a local sponsor is a mandatory requirement. A local sponsor can be either an Emirati individual or a corporate entity. The sponsor must hold at least 51% of the business shares, although this doesn’t necessarily mean sharing profits. The local sponsor plays a vital role in facilitating the business setup process, providing guidance and support to navigate the local business environment. Choosing the right sponsor is important, as they will be your partner in the business, and their involvement can significantly impact your operations.
Registering the Trade Name
Once you’ve determined your business activity and secured a local sponsor, the next step is to register your trade name. Selecting an appropriate and unique trade name is essential, as it represents your business identity. The trade name must comply with the naming conventions set by the SEDD and should not infringe on any existing trademarks.
After selecting a company name, you must submit it for approval to ensure it meets all regulatory requirements. Once approved, you’ll receive a trade name reservation certificate, which is a prerequisite for obtaining initial approvals.
Getting Initial Approvals
With your trade name registered, the next step is to obtain initial approvals from the relevant authorities. This involves submitting an application to the SEDD for preliminary approval. Depending on your business activity, you may also need to secure additional approvals from other government bodies. For instance, financial institutions require approval from the Central Bank of the UAE, while manufacturing businesses need clearance from the Ministry of Finance and Industry.
These initial approvals are essential as they validate your business concept and ensure compliance with local regulations. Once you have these approvals, you can proceed with leasing business premises and preparing the necessary documentation for the final licensing stage.
Documentation and Approval Process
Obtaining a Sharjah Mainland license involves a series of steps that require careful preparation and submission of various documents. Knowing the documentation and approval process helps ensure a smooth and successful application.
Preparing Required Documents
The first step in the documentation process is gathering all necessary documents. This includes scanned copies of valid identification documents, such as passports or Emirates IDs, for all shareholders involved in the business. The company details must also be thoroughly completed, including securing a trade name reservation certificate from the SEDD. This certificate is essential as it confirms the uniqueness and availability of the chosen business name.
Notarising Company MOA
The Memorandum of Association (MOA) is a critical document in the process. It outlines the company’s extracurricular activities and includes vital information such as the company’s name, headquarters location, objectives, shareholder responsibilities, share capital, and submission procedures.
The MOA must be drafted in Arabic and notarised to be considered valid. Notarisation is a legal requirement in the UAE, transforming the MOA into a binding document enforceable in the courts. Without notarisation, the MOA is deemed invalid, leading to the rejection of the business licence application. Therefore, ensuring the MOA is properly notarised and entered into the commercial registry is essential for the company’s legal formation.
Securing Departmental Approvals
Once the MOA is notarised, the next step is to secure the necessary departmental approvals. This involves submitting the MOA along with other required documents to the relevant authorities. The legal form of the business must align with the business activity, as this determines the applicable laws and regulations.
Businesses owned entirely by non-GCC residents must appoint a local service agent from the UAE. All businesses must also have a physical address that complies with the requirements set by the SEDD. These approvals are needed to proceed with the licensing process.
Application for Establishment Card
The final step in the documentation process is applying for an establishment card. This card is issued electronically and contains the establishment’s data. To apply, you need to submit a copy of the decree (federal or local), a decision to form the board of directors, and a letter addressed to the public administration requesting to open a file, signed by the chairman of the board or their representative. The application fee for the establishment card is USD 27 (AED 100), with an additional issuance fee of USD 27 (AED 100) per year.
Card issuance is facilitated through Basher. This integrated eService platform allows investors to establish their businesses swiftly in the UAE. Once all steps are completed, the Business Licence can be collected from the economic department’s service centres or websites.
Costs Associated with a Sharjah Mainland License
Understanding the financial implications of obtaining a mainland license in Sharjah is crucial for prospective business owners. The costs can fluctuate based on various factors, including the type of business, office space needs, and any supplementary services required. Below is an overview of the main expenses involved.
Government Fees
Government fees are the first financial obligation when applying for a Sharjah mainland license. These charges, set by the SEDD, typically range from USD 4,085 to USD 8,170 (AED 15,000 to AED 30,000). The specific amount is influenced by the nature of your business activities and the chosen legal structure.
These fees encompass the registration of the trade name, initial approvals, and the final issuance of the license. To prevent fines, it is vital to accurately list all business activities on the trade license.
Sponsorship Fees
Engaging a local sponsor is necessary for non-GCC nationals to establish a business in Sharjah mainland. The costs associated with sponsorship can vary based on the agreement with the sponsor and the specifics of your business. Negotiating these fees and ensuring that all terms are clearly documented in a legal contract is important.
Office Rent and Lease Agreements
Renting office space represents another significant cost when launching a business on the mainland of Sharjah. The rental prices can differ greatly depending on factors such as location, size, and available amenities. A lease agreement is essential for obtaining the mainland license and must adhere to SEDD regulations. Office rent is an ongoing expense that should be included in your operational budget.
Additional Service Costs
In addition to the primary expenses, there are various supplementary service costs to consider. These may include fees for business setup services that help navigate regulatory requirements and facilitate the licensing process. Other potential expenses encompass visa fees for employees, legal costs for drafting the MOA and Articles of Association (AOA), and charges related to obtaining necessary approvals and certifications. Investing in these additional services can be beneficial for ensuring a seamless setup and compliance with legal obligations.
Benefits of Holding a Sharjah Mainland License
Access to a Wider Market
Holding a Sharjah mainland license allows businesses to reach a larger market within the UAE. Unlike Free Zone licenses, which limit operations to designated areas, a mainland license enables companies to operate throughout the entire UAE.
This capability is particularly beneficial for engaging directly with consumers and other businesses across the Emirates. Also, mainland firms can participate in government and semi-government projects, often presenting profitable growth opportunities.
Attractive Tax Regime
Sharjah provides a favourable tax environment for businesses. Companies with a mainland license enjoy the benefits of the UAE’s tax policies, which include the absence of personal income tax and corporate tax for most business activities. This advantageous tax structure alleviates financial pressures, allowing for the reinvestment of profits into business development.
Furthermore, businesses can fully repatriate their capital and profits, offering additional financial flexibility for foreign investors.
Options for Business Expansion
A Sharjah mainland license presents various avenues for business growth. Companies can select their office location anywhere in Sharjah, improving accessibility and client outreach. This flexibility is essential for expanding operations both within the UAE and internationally. Additionally, mainland businesses can easily establish new branches or offices in different emirates, broadening their customer base.
The lack of a minimum capital investment requirement makes it easier for startups and SMEs to launch and develop their operations. Moreover, the ability to engage in over 1,000 types of commercial and industrial activities without needing a local sponsor grants full control over business operations and assets.
Enhanced Business Credibility
Operating under a Sharjah mainland license boosts a company’s credibility and reputation. Being part of the mainland business ecosystem creates numerous networking opportunities with both local and international enterprises, fostering potential partnerships. Establishing a physical office and active staff in the UAE also enhances the company’s standing when seeking corporate bank accounts and financial services.
Banks in the UAE tend to favour mainland companies, often providing more favourable terms for loans and other financial products. This credibility is further strengthened by the ability to sponsor family members and employees for residency visas, showcasing stability and commitment to the region.
Final Thoughts on Sharjah Mainland Licensing
Acquiring a Sharjah mainland license presents a compelling opportunity for businesses seeking to leverage the expansive market and favourable business environment in the UAE.
The flexibility to operate across the nation, the absence of imposed capital limits, and the benefit of a tax-friendly regime make Sharjah attractive for entrepreneurs and established companies.
While the licensing process seems complex, understanding the steps, from choosing the right type of license to securing all necessary approvals and documents, can simplify it.
By aligning your business activities with Sharjah’s economic framework, you position your venture for strategic growth and success.
Whether you’re a startup or an expanding enterprise, a Sharjah mainland license is your gateway to thriving in one of the most dynamic economies in the Gulf region. Embrace the promising potential that the Sharjah mainland holds for your business future.
Are you considering doing business in Sharjah? Want to learn more about the process and requirements for securing a Sharjah Mainland license? Book a free consultation with our experts now.
