Comprehensive Overview of Hamriyah Free Zone Sharjah: Conditions, benefits, and procedures

Overview of Hamriyah Free Zone

Hamriyah Free Zone is the second-largest industrial free zone in the UAE. It is located in the Emirate of Sharjah and covers 30 square kilometers of industrial and logistics areas, warehouses, and land plots. This is an ideal place to establish a company for manufacturing, assembly, packaging, as well as import and export. Hamriyah offers everything needed for this: affordable setup costs, quick registration, a developed infrastructure—including a major seaport, an airport nearby, highways connecting Sharjah with other emirates—and a wide range of facilities.

However, this doesn't mean that Hamriyah is only suitable for large industrial companies. The free zone offers various types of licenses, including service and trading, with the minimum package with 1 visa costing just 11,000 AED. Additionally, in Hamriyah, you can obtain up to 7 visas without the need to rent an executive office.

Development zones of the HFZA

Hamriyah Free Zone in Sharjah is divided into seven specialized sub-zones: Oil and Gas Zone, Petrochemical Zone, Steel City, Construction World, Timber Land, Maritime City, and Perfume Land. This targeted zoning attracts many SMEs, contributing to the significant number of registered companies, especially in oil and gas. The demand for Sharjah Free Zone company setups has increased due to this strategic approach. Additionally, new zones are under development—Industrial Zone with 144 industrial plots and Logistics Village with 224 warehouse units—expected to attract more investors.

Advantages of Hamriyah company formation

• Business license registration in just 1 business day
• Affordable package with a license and 1 visa, without a facility, for just 11,000 AED. Dive into details of Hamriyah free zone license cost.
• Up to 7 visa allocations without the need to rent an executive office.
• Own port for trade with Europe and Asia.
• Wide range of industrial sectors: from oil and gas to food production.
• Extensive areas for facilities: warehouses, industrial plots, logistics areas.
• Perfect connectivity: airport, seaport, major highways radiating to various UAE emirates.
• Ability to start a business and scale it as much as needed.
• Affordable housing, lower energy, telecommunication and labor costs.
• Dubai is just a 20-minute drive.
• The registration process can often be initiated remotely, though a visit to the UAE is mandatory for medical tests, visa formalities, and opening a bank account.

Types of licenses and business activities in Hamriyah Free Zone

Hamriyah is a free zone with a long history and a solid reputation. Over the years, it has significantly expanded and enriched its offerings with all possible types of licenses and activities. So, regardless of the size and nature of your business, you will certainly find what suits you in Hamriyah, and professional business consultants will help you navigate the details. The Hamriyah Free Zone Authority issues the following types of licenses:

• Trading license: This license allows you to trade, import or export a wide range of goods or specific products. You can also engage in e-commerce, selling goods and services through online platforms such as websites, marketplaces, and social media, and obtain the appropriate license for this activity.
• Service license: This license allows you to officially provide services and offer consultations on a commercial basis in the Emirate of Sharjah.
• Industrial license: With this license, you can set up your own manufacturing business in Sharjah. This includes importing raw materials, processing them, producing your product, assembling, packaging it, and then exporting it.

When purchasing a package for a startup or smart business, you can include up to 3 activities in any license. In the package for standard business and above, up to 5 activities are allowed. However, please note that these activities must be from the same category, such as only goods or only services. If you want to combine different categories, you will need to obtain a separate license.

For a trading/import/export license, up to 10 product categories are allowed.

HFZA was primarily a free zone associated with industries such as manufacturing, logistics, and trade. However, in recent times, sectors that are less typical for the zone have begun to emerge, expanding the opportunities and attractiveness of the free zone for investors. For example:

• insurance consultancy  
• investment of own resources  
• fashion design  
• science and technology consultancy  
• sports research and consultancy
• and others

Maritime industry license

One sector that deserves special mention in the Hamriyah Free Zone is the maritime sector. With a maritime license, you can engage in shipbuilding, ship conversion, and repair, trade in marine equipment, provide consulting services in ship management, and offer other related services.

You have access to an excellent port and land plots with convenient sea access, starting from 5,000 square meters.

Quick and smooth business set-up procedure in Hamriyah Free Zone

You can obtain a license for your company in the Hamriyah Free Zone in just 1 business day. Registering a warehouse will take a bit longer, as you'll need to wait for your business plan to be approved. Additionally, more time will be required if you plan to trade goods that require permits from relevant authorities, such as medical goods.

While HFZA typically requires the personal presence of the founder or an authorized representative, the possibility of fully remote registration should be clarified with the administration at the time of application. Regardless of the setup method, investors must comply with UAE AML/CFT requirements, which involve rigorous due diligence and KYC procedures.

Except for the startup package costing 11,000 AED, all company packages include office space starting from 10 square meters. You will get a business address, the company name board and water and electricity bills included. Executive offices range from 15 to 20 square meters. For warehouse packages, the space ranges from 200 to 600 square meters.

Step-by-step guide to establish a company in Hamriyah

1. You select the type of license and the activities that will be specified in it.

2. You choose the legal entity of your enterprise, which can be a Free Zone Establishment (FZE), Free Zone Company (FZC), or a Branch or Subsidiary.

3. You gather the necessary documents and submit them for approval. You will need:

• A copy of your passport
• A passport-size photo
• A visa or entry permit
• A No Objection letter from the sponsor (if you already hold a UAE visa) attested by the Chamber of Commerce
• A business plan (required for specific activities or warehouse rental)

4. Once approved, you collect your registration documents and license.

5. Obtain an establishment card.

6. Proceed with the residency visa application process.

7. Once your visa is obtained you can open a corporate bank account.

Read the details of each step for Hamriyah free zone company formation.

Multiple visa allocations in Hamriyah

Hamriyah Free Zone attracts investors as it offers the ability to obtain a large number of visas. If you do not wish to rent an executive office, you can apply for a maximum of 7 visa allocations. However, if you rent a warehouse, the visa quota increases to up to 50. The actual quota depends on the specific facility and the current internal HFZA visa table. All visas are usually valid for 2 years for standard investor and employment categories, unless otherwise specified at the time of application.

The procedure for obtaining a residency visa is as follows:

1. Obtain an entry permit: This can be done online or upon arrival in the country.
2. Apply for status change: Submit an application to change your status to a resident.
3. Pay all applicable visa fees.
4. Undergo medical examination and biometrics.
5. Submit an application for the Emirates ID.
6. Obtain the electronic version of your visa.
7. Wait for Emirates ID: It will be sent to the address you provided.

Associated costs:

When applying for a resident visa, you can expect the following expenses:

• Security approval and establishment card — included in immigration charges; 
• E-channel — included in immigration charges;  
• Investor/Partner visa fee — approximately 9,125 AED (including medical and Emirates ID); 
• Manager/Employee visa fee — approximately 3,785 AED (plus refundable deposits);  
• Emirates ID — included in the total fee

The visa needs to be renewed every 2 years. For renewal, you will have to undergo medical tests again, provide biometric data, and pay the applicable fees.

Abundant business and industrial facilities

As previously highlighted, Hamriyah Free Zone emphasizes businesses related to industry and manufacturing due to its significant advantage—a well-developed seaport. Consequently, in Hamriyah, you can lease spaces for constructing factories, warehouses, repair workshops, storage facilities, and other industrial sites.

Hamriyah also offers a large variety of offices that are available under a variety of conditions. Let’s explore the types of facilities you, as an entrepreneur, can rent in Hamriyah Free Zone:

What should not be forgotten after opening a company?

Once you have obtained your commercial, service, or industrial license in Hamriyah, completed all the paperwork, and started operating your business, it’s easy to get caught up in routine operations and planning, potentially overlooking important procedures. To avoid fines and issues with your residency or business in the UAE, keep in mind the following:

1. License renewal: Your license needs to be renewed annually. The renewal cost is typically similar to or lower than the initial setup cost. Before renewing, you must provide an audit report starting after the second year of operations.
2. Visa renewal: Visas must be renewed every two years. This requires a new medical examination, biometric data collection, and payment of visa fees. 
3. Company Liquidation: If you need to dissolve your company, the fee will be approximately 6,000 AED. You must notify the free zone in advance: a few business days if you have a small office, 3 months for a warehouse, and six months if you have an industrial plot. Actual costs and notification periods may vary based on your specific lease agreement.

Explore the details about the procedures for license renewal, company amendments and liquidation (Hamriyah free zone company license renewal section).

Tax records and accounting of a newly opened company in the Hamriyah Free Zone

In the information space, the UAE is often depicted as a tax haven. Some mistakenly believe that foreign businesses in the Emirates do not need to pay taxes. This is not the case. While the UAE still does not impose personal income taxes, property rental taxes, capital gains taxes, inheritance taxes, gift taxes, and similar, companies registered in the UAE are subject to the following taxes:

VAT (Value Added Tax)

Companies selling goods within the UAE, including in Hamriyah Free Zone, must pay VAT at a rate of 5% if their turnover of taxable supplies exceeds 375,000 AED. They are required to register with the tax authority for VAT purposes and file tax returns periodically. For VAT purposes, HFZA is generally considered an onshore territory, though its "Designated Zone" status provides specific benefits for international supply chains of physical goods.

Corporate tax

Hamriyah Free Zone is officially recognized as a Qualified Free Zone and a Designated Zone for Corporate Tax purposes. Companies that meet the criteria for a "Qualifying Free Zone Person" (QFZP) may apply a 0% tax rate to their "qualifying income". However, a 9% tax rate applies to non-qualifying income exceeding 375,000 AED. Regardless of which rate applies, all companies must register with the Federal Tax Authority (FTA) and file an annual tax return. Determining the tax regime for a specific entity requires a detailed analysis of qualifying activities and federal decisions.

Opening and managing a business in Hamriyah Free Zone involves many questions that you may not have the answers to. Furthermore, companies must comply with federal regulations regarding economic substance and ultimate beneficial ownership reporting. The most accurate information is held by business consultants and specialized professionals (accountants, tax advisors, legal consultants) who deal with these matters daily, are up-to-date with the latest changes in legislation, and can provide solutions tailored to your needs.