Comparison of Business Setup Processes in Dubai and Sharjah

Setting up a business in Dubai and Sharjah involves several key steps. However, the process can differ based on the location and the nature of the business. Below is an overview of the key steps, costs, and a comparison between the two emirates.

Key Steps to Set Up a Business in Dubai and Sharjah

Determine the Business Activity: Identify the nature of your business to understand the type of license required (e.g., commercial, industrial, professional). Choose the Legal Structure: Common structures include Sole Proprietorship, Limited Liability Company (LLC), Free Zone Establishment, or Branch Office. Select a Business Location: In Dubai, you have the option of a Mainland with a local sponsor or Free Zones. In Sharjah, you can also choose between Mainland and Free Zones. Register the Trade Name: Choose a unique business name and register it with the Department of Economic Development (DED) in Dubai or the relevant authority in Sharjah. Apply for Initial Approval: This is required to proceed with the business setup. It typically includes security clearance and approval from relevant governmental bodies. Draft the Memorandum of Association (MoA): If setting up an LLC, the MoA outlines the ownership and management structure and must be notarized. Lease Office Space: A physical address is required for licensing. Both Dubai and Sharjah offer a range of commercial spaces including virtual offices in Free Zones. Submit License Application: Submit all necessary documents to the DED or Free Zone authority for the issuance of the trade license. Obtain Approvals from Relevant Authorities: Depending on your business activity, you may need additional approvals from specific ministries or regulatory bodies. Pay Fees and Obtain the License: Once all approvals are in place, pay the required fees and receive your business license. Register with the Chamber of Commerce: This is mandatory in both Dubai and Sharjah for most businesses. Open a Corporate Bank Account: After obtaining the license, you can open a business bank account in the UAE.

Costs Involved

Dubai: License Fees: AED 10,000 - 50,000 depending on the license type and business activity. Office Space: AED 15,000 - 100,000 per year, varying based on location and size. Sponsorship Fees (Mainland): AED 10,000 - 20,000 annually for a local sponsor or service agent. Visa Costs: AED 3,000 - 6,000 per visa, employee and investor visas included. Additional Fees: Initial approval, MoA drafting, notary, etc. can add AED 5,000 - 10,000.

Sharjah: License Fees: AED 7,000 - 30,000, generally lower than Dubai. Office Space: AED 10,000 - 60,000 per year, more affordable than Dubai. Sponsorship Fees (Mainland): AED 8,000 - 15,000 annually. Visa Costs: AED 2,500 - 5,000 per visa. Additional Fees: Similar to Dubai but often slightly lower.

Comparison: Dubai vs. Sharjah

Costs: Sharjah generally offers lower setup and operational costs, making it attractive for SMEs and startups. Market Access: Dubai has a more diverse and dynamic business environment with greater access to international markets. It is ideal for businesses aiming to have a global presence. Free Zones: Dubai has a larger number of Free Zones, each with specialized sectors (e.g., Dubai Internet City for tech companies). Sharjah offers fewer but competitive Free Zones with similar benefits. Infrastructure: Dubai's infrastructure is more developed, with better connectivity, transportation, and access to services, making it preferable for larger businesses. Regulatory Environment: Both emirates have a business-friendly regulatory environment, but Dubai often leads in terms of innovation and new initiatives aimed at attracting foreign investment. Ease of Business: Dubai is often perceived as more streamlined and efficient, especially for businesses that require international connections.

Conclusion

Both Dubai and Sharjah offer conducive environments for business, but the choice depends on your specific needs and budget. Dubai is ideal for businesses looking for greater market reach and more developed infrastructure, while Sharjah offers a cost-effective alternative with similar benefits.