Company Formation Sharjah

Company Formation Sharjah

SHARJAH COMPANY INCORPORATION

 

Sharjah company incorporation offers a suitable and optimal option for foreign investors, not only because it is tax efficient, but is also a cost efficient option to Dubai company formation.

 

 

Advantages

 

As an emirate of UAE, Sharjah companies are not subjected to tax. Also, free zone companies do not have to pay corporate tax, an advantage that results in minimal withholding tax on remittance to other countries. Hence, there is no need to pay custom duties on import / export goods from the free zone.

 

Though an Emirati national must be appointed as 51% local partner (with the trading license allotted by the Department of Economic Development), the investor can still define the profit and loss distribution.

 

Sharjah serves as a prominent industrial core, helping in producing 48% of UAE’s industrial yield. It is also included in the top 10 preferred cities to do business in the Gulf area and serves as an ideal location for setting a manufacturing company in the UAE.

 

Sharjah is advantageously positioned near the African and European continents, and thus serves as a perfect option for trading company formation.

 

The government provides vast subsidies to the energy and utilities sector which also serves as a big advantage in favor of Sharjah company incorporation. 70% of the electricity and utilities cost is covered by the government, hence the economy provided can be extremely beneficial for Sharjah company formation.

 

Another advantage for Sharjah company incorporation is the 66 double tax treaties agreed upon between UAE and overseas countries, including Chine, India, Japan and Singapore. This was accorded for the purpose of lessening withholding taxes on overseas payments. The absence of exchange controls in the UAE also poses as an advantage for investors to send back profits to their home countries.

 

Other advantages offered by a free zone company include the following:

 

  • There are less administrative requirements for company formation
  • There are lesser constraints for staff hiring
  • Zero import / export tax reductions
  • Superb infrastructure
  • Moderate costs for energy and utilities
  • No minimum share capital is required to form a LLC in UAE
  • Foreign investor can have 100% full ownership of company
  • Full repatriation of capital
  • Warehousing options in Sharjah ports offered free of cost to investors for up to two months of storage
  • Out of the seven emirates, Sharjah is the only one with direct access to the Indian Ocean, due to ports on the Arabian Gulf’s west and east costs

 

 

Disadvantages

 

  • Company formation in Sharjah is a lengthy and expensive incorporation process
  • There are costly government fees, complicated and shifting laws in the UAE, as well as ineffective bureaucracy
  • An Emirati national be appointed as 51% local partner
  • Incompetent services provided by Sharjah based banks for personal and corporate banking products and services, when compared to other emirates in the UAE
  • A minimum capital of AED150,000 (US$41,000) is required for branch company formation in the Sharjah Airport Free Zone
  • Annual renewal of licenses are required and can be obtained by submitting annual audited financial statements to the authorities