Sharjah is the third largest state of the UAE. Sharjah is next to Dubai and efficiently its suburb; with daily traffic streaming to and from creating long traffic jams at rush hours. It was one of the richest states in the UAE. Sharjah is an electrifying, lively state with exciting artifacts in every place. This cultural square is famous for its mixture of restored houses in traditional style. Sharjah is a hub for electronic business and mainly for import and export businesses. Sharjah company formation is a real thrill for investor who wish to setup their business in a rich culture and easily available resources.
License for Sharjah company formation
- Commercial license covering all kinds of trading activity.
- Industrial license for establishing industrial or manufacturing activity
- Professional license covering professions, services, craftsmen and artisans.
What are the requirements for company formation in Sharjah?
Prior to company formation in Sharjah, it is first essential to follow the steps drawn below in order to meet the legal necessities of all concerned government authorities and to promise maximum commercial advantage for the business owner.
- Submit sharjah company formation application and the proposed company name to the Department of Economic Development (DED)
- Notarize the Memorandum of Association in DED for company formation in sharjah
- File company documents with the DED and obtain trade license and the Abu Dhabi Chamber of Commerce and Industry membership.
- Make a name board
- Apply for establishment card at the Ministry of Labor for your company formation in sharjah
- Apply for workers visa in Ministry of Labor
- Register workers with the General Authority for Pension and Social Security
Legal Structures for Business setup in sharjah
In the past, every single emirate followed its own processes for controlling the operations of foreign companies. In run-through, however, Dubai and the other states followed the same common system, whereby foreign companies operated in one of three ways
- With a local sponsor, through a partnership with a United Arab Emirates national or company
- Through a private limited company
- Public shareholding company incorporated by Ruler’s decree
Since 1984, steps have been taken to introduce a organized companies law applicable throughout the United Arab Emirates. Federal Law No. 8 of 1984, as amended by Federal Law No. 13 of 1988 – the “Commercial Companies Law” – and its by-laws have been issued.
The Federal Law orders total local shares will not be less than 51% in any commercial business setup in sharjah and outline seven categories of business setup in sharjah which can be incorporated in the Sharjah. It groups out the requirements in terms of directors, shareholders, minimum capital levels and incorporation procedures. It further lays down provisions governing conversion, merger and dissolution of companies.
The seven categories of company formation Sharjah
- Joint venture company
- Public shareholding company
- Private shareholding company
- General partnership company
- Limited liability company
- Share partnership company
Joint Venture company formation In Sharjah
Joint venture is an agreement between a foreign shareholder and a local partner; it must be done to engage in a desire activity. A joint venture company formation in Sharjah is done among two or more then two partners; that is, to agree on a contract to share the profit and loss of one or more company. The equity sharing from the local side in the joint venture must be at least 51%; but the profit and loss distribution can be set. Also if the expat partner contracts with third party; that is under the name of the local partner will bear the responsibilities. In practice, joint ventures company formation in Sharjah is more suitable for working together on specific projects.
Public Share Holding Company setup In Sharjah
We provide custom solutions to those companies who are planning for public Shareholding Company setup in Sharjah. Public shareholding company (PJSC) required to have a minimum capital of AED 10,000,000 and required at least ten founding members who are United Arab Emirates Nationals, owning between 20% and 40% of In Public Shareholding Company, the capital is divided into equal shares, in such businesses the owner’s liability is limited by the number of shares. Moreover, the Chairman and majority of the Directors in a public shareholding company must be United Arab Emirates national and should hold at least 51% of the shares. In general, banking, insurance or financial sectors run as public share holding companies. The company’s name cannot include the name of any of the stockholders and should instead reflect its activity. In all cases, however, the phrase “Public Shareholding Company” must be attached to the business name. Setting up a Public Shareholding Company in Sharjah is no longer a extraordinary task, as DBC has a pool of professionals who find the people who are keen to be different stake holders of a company.
Private Share Holding Company formation Sharjah
Dubai Business Center (DBC) provides great support for Private Shareholding Company formation Sharjah, as DBC consultancy has already assisted several companies to incorporate in Sharjah, A Private Joint-Stock Company or Private Shareholding Company is a partnership of at least three persons. The companions of private partnership must invest a minimum capital of AED 2,000,000 in the company. Such businesses can be setup for any industrial or commercial type of business setup in Sharjah. A Private Joint Stock Company is subject to all rules and regulations that apply to Public-Joint Stock Companies, except for the rules and regulations relating to public share subscription.
A Private shareholding Company can be established in-between three or more United Arab Emirates Citizens or GCC Citizens. The law also permits citizens of other countries to establish a private shareholding company with at least one United Arab Emirates National. The shares of a private shareholding company cannot be transferred to the public. However, the company can be converted to a public company two years or more after its creation. We can offer assistance for United Arab Emirates nationals and nationals from other countries to set up private share holding company in Sharjah.
General Partnership Sharjah company formation
General Partnership Sharjah company formation is an easy process as professional consultants from DBC can guide you in a right channel. General Partnership consists of two or more associates who hold a joint responsibility for all the company liabilities and activities. This is only kept to United Arab Emirates nationals because the companions are responsible towards the liabilities of the company by their assets unlike expats or foreigners as their assets are usually abroad. As per the legislative order, all joint partners in GPC type of companies should be citizens of the United Arab Emirates. For setting up a General partnership firm in Sharjah,
Representative Office of Foreign Company in Sharjah
In Sharjah, foreign companies are allowed to launch their cooperation or representative offices as per the license granted. Being the leader in business consulting we assists companies to open their representative office in different emirates of United Arab Emirates. In fact, representative office functions as a marketing or administrative center of a foreign company. A representative or link office in Sharjah has limitation in promoting its parent company’s activities. This means that a representative office is only allowed to perform such activities as soliciting orders, collecting data, and marketing projects to be performed by the company’s headquarters. Representative office is also restricted in the number of employees that they sponsor commonly three to four.
Branch of foreign company in Sharjah
Foreign companies are allowed to establish their own branches and representative offices in Sharjah. However, these offices have a restriction in the activities they may conduct within the United Arab Emirates. As per the law in United Arab Emirates, only United Arab Emirates nationals or companies fully owned by United Arab Emirates locals may be appointed as local service agents. Local service agents or sponsors are not involved in the operational side of the company, but they just simply support in getting visas; labor cards etc, and is paid a lump sum amount per year. A popular way for foreign businesses to keep 100% ownership in Sharjah company formation is to incorporate a branch or representative office. These offices do not have separate legal characteristics but are known as an extension of the foreign company, which remains liable for their whole activities.
The primary difference in-between a branch office and a representative office is that a representative office has limitation to gather information and solicit orders and projects to be performed by the parent company. In the case of representative offices, they are also limited in the number of employees they may sponsor (typically 3 or 4).In fact, a representative office functions as an administrative and marketing hub for the parent company. A branch office can involve in commercial activity in the United Arab Emirates and can earn profits as per the license granted.
Sole Proprietorship Sharjah company formation
In most form of the company in UAE a local sponsor is requires to set up company. But still there are some activity for which an expat are allow to set up sole proprietorship. In this type of a Sharjah company formation; a foreign investor to perform some business activities without having a local sponsor. Best examples can be engineering consultancies, medical services, legal practice and other consultancies and similar services. Only investors with a valid and legal UAE residence permit can start a sole proprietorship company in Sharjah. However, the rules in UAE demands that the one who wish to start a sole proprietorship company in Sharjah; should have a local service agent.
LLC Company Formation In Sharjah
At this point let me tell you an other quality of DBC; that is LLC company formation in sharjah. A LLC company can be form with a minimum of 2 and a maximum of 50 partners; whose liability is limited to their shares in the capital. Most companies with foreign partners always opt for LLC company formation in sharjah; due to the fact that this is the only option that ensures maximum legal ownership; that is 49% to the expat for a trading license. Moreover its mandatory to keep one UAE national as a partner in the LLC; investor has to pick one UAE local (sponsor) as a partner in the company.