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Company Registration in Sharjah Media City Free Zone. Service offer

Sharjah Media City (SMC) Free Zone is located in the Emirate of Sharjah. With an area of 2590 sq. km, Sharjah is the third largest emirate in the UAE; it is situated 10 km off Dubai and an hour’s drive from Abu Dhabi. Due to its geocentric location, the emirate is an important business centre both domestically and internationally, including key markets in Asia, the Middle East and Africa. The proximity to the main trade routes, highly developed urban and social infrastructure, and a relatively low cost of rent, utilities and living made this emirate attractive for business and life, and also increased its reputation as the world’s eleventh most attractive international destination for direct foreign investment.

Key Free Zone Specifics:

No corporate tax

Quick company registration

Ability to create substance in the country of registration

Ability to obtain a residence visa for the company’s shareholders and employees

Medium ranking of the zone among banks – additional documents might be requested

Mandatory audit

Limited options in regard to offices: only flexi desk or office/warehouse premises / no infrastructure for industrial licenses

Budget for setting up business in Sharjah Media City Free Zone:

Services
Fees (USD)
Company registration in Sharjah Media City Free Zone, including licence, rent of shared desk office, company formation services, and E-channel registration[1]. This fee is applicable in the case of: company with a single shareholder; type of licence – service; office – shared desk. Other options – upon request
9700
Obtaining a residence visa (cost of one visa – investor visa), including: - payment of all government fees (Entry Permit, Medical Fitness Report & Emirates ID, Visa Stamping on the Passport); - preparing necessary documentation; - accompanying the applicant and transport costs (trip to the hospital and migration authority)
4200
Assistance with bank account opening (irrespective of the outcome of application). Corporate account (for legal entity)
2500
Total:
16 400

COMPANY REGISTRATION

Company registration in Sharjah Media City Free Zone includes the following steps:

1) Selecting:

company name to be checked for availability (at least two names), which name:
  • must not be identical or similar to the name of an existing company;
  • can use Latin characters;

company structure (director, shareholders, and manager);

type of licence:

Sharjah Media City Free Zone has three types of licence:

Service licence – allows the holder to provide the type of services specified in the licence.

Examples of service licences: business consulting, marketing consulting, project consulting, IT consulting, etc.

Trading licence – allows the holder to import, export, sell, distribute and store goods specified in the licence.

Examples of trading licences: general trading, e-commerce, trading in certain types of goods: 3 to 5 types.

Industrial licence – allows the holder to import raw materials for production, processing and/or assembly of specified products. Finished products can be exported outside the UAE.

Examples of industrial licences: processing licence, assembly licence, packaging licence, production licence.

Some licences require approval from the relevant regulator: for example, a number of production licences require approval by the UAE Environment and Protected Areas Authority or a specific ministry.

2) Paying fees

3) Providing documents for directors / shareholders / attorneys

(either originals or notarized copies):

  • internal and international passports;
  • proof of address (unless the internal passport contains an address stamp);
  • CV

The shareholders need to additionally provide:

  • copy of the passport page with a UAE entry stamp;
  • personal data in the form of a letter: phone, email, residential address, country of residence, mother's name, marital status, religion, and citizenship.
IMPORTANT: a shareholder’s prior visit to the UAE is mandatory for company registration. It is irrelevant how old the UAE entry stamp is. If a shareholder has never visited the UAE before, he/she will need to enter the country at least for one day

The shareholders will need to sign a Client Questionnaire Form for completing compliance procedure, and a Contract for administration.

Preparation and Submission of Documents for Company Registration

The following documents are prepared for submission to the registration authority:

Application for company registration (signed by the shareholder)

Security Approval form (filled in and signed by each director and shareholder)

No Objection Letter (from the sponsor) – where there is a valid UAE visa issued by another company

Before registering a company, the Free Zone authority must check the shareholders and directors of the company based on the Security Approval form provided. At this stage they may request additional documents, for example, a police clearance certificate. The check normally takes 2 to 4 business days.

Once the check is done, the company is registered. Upon registration, the Free Zone authority issues the following documents:

  • Certificate of Incorporation indicating the registration number and date, type of licence, details of shareholder and share capital of the company;
  • Licence for the declared type of business (valid for 1 year);
  • Office lease agreement (for 1 year);
  • Share Certificate;
  • Articles.

A company seal is also issued.

The total time to register a company in Sharjah Media City Free Zone is 10 days, on average.

Upon registration of the company, you can proceed with visas and bank account opening. A company can open a bank account both at a UAE bank and at a foreign bank – please contact your GSL consultant for details.

IMPORTANT: Since the UAE is not party to the Hague Convention of 5 October 1961, which abolishes the requirement for legalization of foreign official documents, it is necessary to submit the documents of a local company for legalization to the consulate of a country where they will be used

The fees for translation, notarization, legalization and apostille are charged additionally.

VISA APPLICATION

The UAE does not have such concept as a residence permit. UAE migration rules require the issuance of residence visas, which in practice are similar to a residence permit.

A residence visa can be obtained on the following grounds:

based on owning a UAE onshore company – investor visa;

by making an employment contract with a UAE onshore company – work visa.

The number of residence visas depends on the business package chosen during registration of the company.

An investor visa is normally issued for 3 years, a work visa – for 2 years. Upon expiration, a visa can be renewed.

Application for residence visas includes the following steps (a visa can only be applied for after registration of the company):

1. Opening an Establishment Card (the migration file of the company) – 5-10 days. This document is necessary for the company to be able to apply for residence visas in the future.

2. Submitting documents for a residence visa and obtaining an Entry Permit (permission to enter the country) – 5-7 days.

To obtain a residence visa, an individual must enter the UAE with an Entry Permit.

If at the time of issuing of Entry Permit the applicant is already in the UAE, then in order to complete the issuance of a residence visa without leaving and re-entering the country, it is necessary to change the status of the visa. The service of changing the status of a visa is provided upon request and is subject to additional charges.

3. Visiting the UAE to obtain a residence visa – in most cases, a visa can be obtained within 5 working days.

The applicant needs to:

  • undergo a medical examination (blood test and chest X-ray);
  • submit biometric data (retina and fingerprints scan).

After receiving a passport with a residence visa inserted into it, one can leave the country.

4. Obtaining a resident ID card - ID Emirates

The card is issued a few days after the issuance of a visa. Personal presence is not required to receive it.

IMPORTANT: One is not required to reside in the UAE permanently, but a residence visa will be cancelled if one stays outside the UAE for more than 6 months

The fees for obtaining a residence visa in Sharjah Media City Free Zone start from USD 4200. Please contact your consultant for more details on the application.

COMPANY STRUCTURE

Directors

The director can be an individual. There are no requirements as to the residence of director; a non-resident can be appointed if the director does not carry out activities in the UAE.

The minimum number of directors is 1

Details of directors are not accessible to public

General Manager

The manager can be an individual. There are no requirements as to the residence of manager; a non-resident can be appointed if the manager does not carry out activities in the UAE.

The minimum number of managers is 1; can be the same person as director

Details of the manager are not accessible to public

Members

The minimum number of members/shareholders in a company is 1, the maximum is 50. Both individuals and legal entities can be shareholders. There are no residence requirements.

Sharjah Media City Free Zone does not require a company to necessarily have a local shareholder in its structure.

Details of shareholders are not accessible to public

Share Capital

A company can only issue one class of shares of equal par value. Bearer shares are not permitted.

The capital can be denominated in UAE Dirhams (AED) only.

There is no requirement to provide a bank letter confirming the payment of share capital, in order to register a company in Sharjah Media City Free Zone.

Registered Office

Upon registration the company and the Free Zone authority sign a lease agreement for the office (shared desk); the address of such office is considered the official registered office address of the company.

SUBSEQUENT ADMINISTRATION OF THE COMPANY

Corporate Tax

Companies registered in UAE free zones are exempt from corporate tax, capital gains tax, property tax and other taxes, except VAT.

VAT

From 1 January 2018, the UAE introduced a Value Added Tax.

VAT as a general consumption tax applies to all transactions with goods and services, unless such transaction is exempted or taxed at 0% rate.

The standard VAT rate in the UAE is 5%

There is no obligation to register for VAT unless sales turnover within the country exceeds the registration threshold, which is AED 375,000 (~ USD 100,000) in the UAE.

Registration as a VAT taxpayer is required in the following cases:

  • there is reason to believe that the taxable turnover in the next 30 days will exceed the registration threshold (for example, a contract has been made);
  • at the end of the month, the taxable turnover for the previous 12 months actually exceeded the registration threshold;
  • the company receives services to be included in the return using the reverse charge method, in excess of the registration threshold.

It is possible to initiate a voluntary registration after exceeding the threshold of taxable transactions in the amount of AED 187,500 (~ USD 50,000).

Registration with the UAE Federal Tax Administration and allocation of the company’s Tax Reference Number (TRN) takes 20 business days, on average

Upon registration with the Federal Tax Administration and allocation of the VAT number, a company must quarterly (or monthly in the case of annual turnover exceeding AED 150,000,000 ~ USD 40,830,900) prepare and file a VAT return, and pay the resulting VAT within 28 days of the VAT period end.

Before registering a company, we recommend that you consult a specialist of the non-resident audit department and a tax adviser to assess the company’s tax burden and discuss subsequent administration of the company

Financial Statements and Audit

Every company registered in Sharjah Media City Free Zone must keep accounting records sufficient to confirm its financial position and reflecting up-to-date information about the assets and liabilities of the company.

It is necessary to prepare annual financial statements of the company, but there is no requirement for audit or submission of financial statements to state authorities.

The company’s first accounting period begins on the date of incorporation and lasts not more than 18 months. Every subsequent accounting period lasts exactly 12 months from the end-date of the previous period.

Before registering a company, we recommend that you consult a specialist of the non-resident audit department and a tax adviser to assess the company’s tax burden and discuss subsequent administration of the company.

Renewal

The company must annually renew the licence, by paying a relevant fee, and the lease agreement.

The company’s renewal date is the anniversary of the issue of the licence. In the case of late payment, the Free Zone authority reserves the right to charge fines, as well as suspend the licence.

The company renewal costs include renewal of the office lease agreement, of the licence, and the P.O. Box. Upon renewal, an updated licence is issued.

Fees[2]

Services
Fees (USD)
Company registration in Sharjah Media City Free Zone, including licence, rent of shared desk office, and company formation services. The cost of package may vary depending on the number of shareholders, type of licence, and size of office (the office size dictates how many residence visas a company can have). This fee is applicable in the case of company with a single shareholder and eligible for 1 residence visa (minimum package). Other options – upon request
9700
Annual renewal of the company, including licence, rent of shared desk office, P.O. Box, and company renewal services. This fee is applicable in the case of company with a single shareholder and eligible for 1 residence visa (minimum package). Other options – upon request
9000
Obtaining a residence visa (cost of one visa – investor visa), including: payment of all government fees (Entry Permit, Medical Fitness Report & Emirates ID, Visa Stamping on the Passport); preparing necessary documentation; - accompanying the applicant and transport costs (trip to the hospital and migration authority)
4200
Renewal of a residence visa (cost of one visa – investor visa). Renewal of a residence visa (investor visa is issued for 3 years) requires taking the same actions and paying the same fees as upon initial application
4200
Assistance with bank account opening (irrespective of the outcome of application). Corporate account (for legal entity)/Personal account (for individual)
2500/2500
Compliance fee
250
Keeping company’s accounting records. Maintaining a systematic archive of company documents and providing them to the client upon request
200 / hour[3]
Preparing financial statements, conducting audit and submitting financial statements to the Free Zone authorities
400 / hour
Tax advice on VAT and other matters
300 / hour
VAT registration
1200
Preparing and submitting VAT returns
200 / hour

[1] The cost of package may vary depending on the number of shareholders, type of licence, and size of office (office size dictates how many residence visas a company can have).

[2] The fees are valid as at September 2021.

[3] The fees for preparing financial statements and conducting audit are charged based on the time spent at hourly rates ranging from USD 100 to 400, depending on the type of work and qualification of a specialist involved, but not less than USD 1900 – fees for audited financial statements with a minimum number of transactions.

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