Understanding Business Setup Costs in Sharjah
Sharjah is one of the UAE's fastest-growing emirates. It is a popular destination for entrepreneurs who want to expand their presence. Its strategic location, business-friendly environment, and relatively lower setup costs compared to other cities like Dubai and Abu Dhabi make it an attractive choice for business operations. Understanding the intricacies of business setup costs in Sharjah is vital for entrepreneurs and investors looking to establish their company in the UAE. Here, we will walk you through the different expenses involved in Sharjah business setup and make you understand how working with a professional consultancy can streamline the process.
Why Choose Sharjah for Business Setup?
Sharjah offers numerous advantages for businesses, particularly for small and medium-sized enterprises (SMEs) and startups. It is home to a variety of free zones that provide competitive benefits, including tax exemptions, full foreign ownership, and hassle-free company registration processes. Moreover, Sharjah is known for its affordable office spaces, labour costs, and licensing fees compared to Dubai and Abu Dhabi, making it an ideal choice for cost-conscious entrepreneurs.
Key Benefits of Setting Up a Business in Sharjah
- Strategic Location: City’s proximity to Dubai and its access to the Northern Emirates make it a great hub for businesses targeting the GCC market.
- Competitive Costs: From rental spaces to labour, Sharjah offers several cost advantages over other Emirates, especially for startups.
- Free Zones: Sharjah is home to various free zones, including the Sharjah Airport International Free Zone (SAIF Zone) and Sharjah Media City (Shams), which offer business-friendly policies.
Now that we have looked at the major advantages of business setup in Sharjah, let’s explore the different costs involved.
1. License FeesOne of the main aspects of business setup in Sharjah is obtaining the business license. There are different types of business licenses, and the cost will depend on the type of business activity you are planning to do. The most common types of licenses are:
- Commercial License: For businesses in trading goods and commodities sector.
- Industrial License: For manufacturing and production-related activities.
- Professional License: For service-oriented businesses like consulting, IT services, and education.
Free Zones: In Sharjah’s free zones, license fees normally range between AED 8,000 to AED 20,000 per year, depending on the type of business and the free zone you have selected.
Mainland: Mainland business licenses are issued by the Sharjah Economic Development Department. Fees can vary but typically range from AED 10,000 to AED 15,000 annually.
Working with a professional business setup consultancy ensures that you choose the appropriate license type and avoid unnecessary expenses.
2. Costs for Office SpaceWhether you choose to operate in Sharjah’s free zones or on the mainland, you will need office space for your business activities. Office space costs are an important part of the business setup cost in Sharjah.
Free Zone Office
Flexi-desk: Many free zones provide cost-effective flexi-desk solutions. It’s an affordable option for startups and small businesses. Flexi-desks normally cost around AED 5,000 to AED 12,000 per year, depending on the free zone.
Dedicated Office Space: If your business needs a more permanent setup, dedicated office spaces are a suitable option. The cost of office space in free zones can range from AED 12,000 to AED 50,000 annually, depending on the size and location of the office.
Mainland Office Space
The cost of renting office space in the mainland region in Sharjah varies depending on location, size, and the type of office. Sharjah provides relatively affordable rental rates compared to the city of Dubai, with prices starting from AED 40 per square foot.
3. Visa CostsVisa processing is also an essential part of the Sharjah business setup process. Companies should arrange visas for their employees and investors. The number of visas you can acquire will depend on your business license type and the size of your office space.
OverviewInvestor Visa: For company owners and investors, the visa cost can range from AED 3,500 to AED 5,000. This includes medical exams and ID cards.
Employee Visa: The cost of an employee visa is normally around AED 3,000 to AED 4,500, depending on the free zone or mainland location. Additional costs may be applicable for medical tests and visa renewals.
Family Visas: Entrepreneurs can also sponsor family members, and the cost of a family visa will be between AED 4,000 to AED 6,000.
4. Share Capital DepositMost free zones in Sharjah don’t need companies to deposit share capital in a bank account, making the initial setup more affordable. But, some mainland companies may require a minimum share capital deposit, which could affect overall costs. Share capital requirements can vary depending on the business type and industry.
5. Registration and Documentation FeesConsider the registration and documentation fees during business setup in Sharjah. These costs include the process of registering your business with the appropriate government authorities, including the Sharjah Economic Development Department (SEDD) or the free zone authority.
Estimated CostsFree Zones: Registration fees in Sharjah’s free zones normally range between AED 2,000 to AED 10,000, depending on the zone and the type of business.
Mainland: For businesses in the mainland region, registration fees may range from AED 1,500 to AED 5,000.
A professional business setup consultancy can help entrepreneurs by managing the documentation and registration process, ensuring that all paperwork is filed accurately and on time, avoiding delays or fines.
6. Sponsorship Costs for Mainland Companies
For businesses operating on the mainland, finding a local sponsor is important, as UAE law requires that foreign entrepreneurs have a local partner who holds 51% of the shares. Sponsorship costs may vary, but most local sponsors charge an annual fee for their services.
Sponsorship CostsSponsorship Fees: Depending on the sponsor, the cost can range between AED 10,000 and AED 30,000 every year. The fee may be negotiated as part of the business arrangement in some cases.
It’s important to work with a trustworthy sponsor, and many business setup consultancies can help in connecting with reliable local partners, ensuring smooth operations for mainland businesses.
7. Additional CostsApart from the major costs outlined above, there are numerous additional expenses to consider while setting up a business in Sharjah.
- Bank Account Setup: Starting a business bank account usually comes with a setup fee, which can range from AED 1,000 to AED 5,000, depending on the bank and the type of account.
- Utility Costs: Businesses need to cover utilities like electricity, water, and telecommunications. Utility costs will depend on the size of the office and the business activities. It can range from AED 1,500 to AED 3,000 monthly.
- Marketing: Branding and marketing are essential for any new business to succeed. Initial marketing costs, including website development, social media marketing, etc. can range from AED 5,000 to AED 15,000.
Setting up a business in Sharjah offers various advantages, from cost savings to location. Understanding the costs involved, including licensing fees, office space rentals, visas, and registration fees, is necessary for entrepreneurs looking to establish a presence in the UAE. Working with a business setup consultancy like Bizvise is one of the finest ways to navigate these costs efficiently, ensuring that your company starts on a strong footing. By leveraging expert guidance and local networks, entrepreneurs can avoid costly mistakes and focus on growing their businesses in this dynamic market.