A license is a permit the UAE government provides to ensure that business activities are operated within the framework of laws, rules, and regulations. Before starting any business, it is important to have information about the industry and the types of activities involved, as licenses are specific to particular business activities.
This article will highlight the important information related to legal business license types in Sharjah, their cost, and the detailed process of obtaining a license in Sharjah. Give it a read for a complete understanding.
Types Of Business Licenses
In Sharjah, four common licenses are available for investors based on their business activities: Commercial, Industrial, Professional, and Tourism.
Commercial License
A commercial license is required for those who invest in a business that trades various goods locally or internationally. It is also required if you are going to open an Import-export Business or Trading Company and shop in Sharjah.
Holding a commercial license can help you gain customers as it shows that the business is registered and trustworthy.
Industrial License
An industrial license is most appropriate if your company is involved in manufacturing, production, and processing activities. In Sharjah, common activities covered by industrial license are
- Textile Production
- Packaging
- Converting raw materials to furnished products
- Production of goods
An industrial license helps you operate a manufacturing unit and factory legally. It also helps in maintaining the business by following the rules for quality and safety. It is recommended to choose those areas for business setup that support manufacturing activities such as industrial areas or free zones in Sharjah.
Its validity is one year and must be renewed before expiration to avoid any kind of difficulty in business activities. It might be possible that you require additional approvals from various authorities depending on what products you are manufacturing.
Professional License
You can obtain a professional license in Sharjah if you provide professional services, not products based on your skills and talent. The license ensures that individuals are capable, skilled, and experienced in their profession according to the requirements set by the UAE government and relevant authorities. The following services can be delivered if you have a professional license.
- Healthcare services
- Carpentry
- Advisory services
- Makeup services
- IT services
- Graphic Designing
- Safety Services
- Document clearing
Professionals can operate from the office, home, or online in some cases. You are allowed to expand your business in Sharjah by hiring employees. The professional license needs to be renewed each year as its validity is also one year.
Tourism License
The fourth most common license type is tourism as it is an evergreen business in Sharjah. Starting one in the UAE is a wise idea, as it offers several benefits such as profitability and stability.
For a tourism license, you have to submit your documents and initial approval from the DED to the Department of Tourism and Commerce Marketing (DTCM). If the application is complete and the company meets the criteria set by the DTCM, then a tourism license will be provided.
Steps To Start a Business and Obtain a License in Sharjah
Following these simple steps, you can acquire a license to operate legally in Sharjah.
Choose a Business Activity
The first step is determining which services you want to provide or what activities fall in your business. After that, you must approach the Department of Economic Development (DED), which decides and allows investor permits.
Select Legal Structure
The next step is to choose a suitable legal structure for your business. An LLC requires a minimum of two shareholders. If a company runs into financial trouble, the shareholders would be equally responsible. If you prefer to run your business individually, you can select a sole proprietorship.
Secure Local Sponsor
In UAE, hiring a local sponsor to get pre-approval from the DED is mandatory. LSA performs multiple tasks according to the business’s needs, such as representing a company, dealing with other authorities, facilitating connections, and fulfilling other requirements. However, it is not their responsibility if a company fails to succeed.
Prepare a Memorandum of Association (MOA)
If your company’s legal structure is LLC instead of a sole proprietorship, then making a memorandum of association is crucial. Mention the necessary details about the agreement, objective, early fee, company name, and information related to shareholders.
Apply For Initial Approval
Although initial approval is not as authentic and authorized as the license is, it is an approval by the Department of Economic Development for a limited duration. It is provided when the company meets all the requirements, and the DED does not object.
Apply for a Professional License
After obtaining the pre-approval, investors can apply for a license by providing all the documents required by the relevant departments. You have to pay the fee before legal services are provided in Sharjah. After reviewing your application for a license, the government will provide a license within two weeks.
Documents Required for Any License
Ensure you have not missed any of the documents mentioned; otherwise, the application will be canceled.
- Application form (complete)
- Initial approval from DED
- Photocopy of professional degree
- Memorandum of Association
- Authorities’ approval
- Experience Certificate of owner
- Certificate of clean criminal record of the applicant
- UID number of shareholders (visit visa holders)
- Copies of passport
- Photographs of shareholders
License Cost in Sharjah
Estimating a license’s exact cost in Sharjah is difficult as it depends on the license type and business activities. As business types and activities change, the cost also varies. So here is a general idea of the cost of different types of licenses.
Professional License
Several factors impact the professional license cost, which generally ranges from AED 10,000 to AED 50,000. The total amount depends on a number of variables; these include the regulatory fee, service agent fee, tenancy contract, license fee, management service fee, local fee, and leasing cost.
Moreover, along with these charges, investors must also pay security charges up to AED 10,310. With time, the cost may increase with the increase in service charges.
Tourism License
Sharjah offers different kinds of Tourism Business licenses depending on the specific nature of tourism-related activities. The cost of a license also varies with the type of services being provided.
- Inbound Tour Operator License
With this license type, you can organize activities for non-residents. These include booking hotels, arranging transportation, providing guidance, and other activities. If you provide inbound tour services, the license cost will be AED 10,000 to AED 15,000.
- Outbound Tour Operator License
An outbound tour operator license allows you to organize tour packages for Sharjah residents to travel to any country. This includes booking flights, hotels, accommodation, and visa processing. You need to get an outbound tour operator license for outbound tour services, which costs AED 15,000 to AED 20,000.
Commercial License
A commercial license costs AED 10,000 to AED 15000 and is valid for one year. The final amount depends on the number of employees, activities, and business scale.
Industrial License
The cost of an industrial license varies depending on the industry and its size. Typically, it is AED 7000 to AED 25000.
Conclusion
At the end of this article, we hope it has provided comprehensive information on legal business license types in Sharjah. Sharjah is a flexible destination as it offers multiple types of licenses, and businesses have great potential to thrive. Before initiating the process, it is important to understand the license and know which activities are allowed under each license type. In Sharjah, licenses are cost-effective, so choose the right license type and apply to the relevant authority.
Starting your own business and getting a license can be hectic and time-consuming. If you are facing any difficulties in the process, don’t worry. Al Riyady is always here to assist and guide you through the process. We also offer other services like Business Setup and UAE Golden Visa.
