Hamriyah Free Zone (HFZ)
Hamriyah Free Zone (HFZ) was established in 1995 by an Emiri Decree, fosters entrepreneurship and economic development. The Free Zone has been deploying business solutions for international and local investors to access a lucrative market of roughly 1.5 billion consumers within the MENA region. This encompasses total ownership of businesses, repatriation of capital and profits, no taxes or duties, application of one-stop-shop concept for a quick issuance of licenses and a viable visa solution for business owners and their employees.
Whether it’s a multinational expanding operation or a budding entrepreneur with big dreams, Hamriyah Free Zone (HFZ) today offers a range of services and facilities for every need and budget. For long-term leases of land, pre-built warehouses, factories and executive office suites, Hamriyah Free Zone (HFZ) has more than 22 million square meters of prime industrial and commercial land and a 14 meter deep water port to meet and exceed the demands of any business. Over 60,000 people across 5,000 companies representing 136 nations have already chosen HFZ.
Hamriyah Free Zone (HFZ) is located in Sharjah, the only one of the seven emirates with ports on the Arabian Gulf’s west and east coasts with direct access to the Indian Ocean. Sharjah offers extensive transportation links to the Gulf states, Indian subcontinent and the emerging markets in Asian and African nations through its three modern seaports and an international airport.
- 100% Tax-free environment
- 100% Repatriation of capital and profits
- 100% Company ownership
- 100% Exemption from all commercial levies
- Pre-built warehouses and office units for long term lease.
- Availability of a 14 meter deep water port with 7 meter deep inner harbor adjacent to it.
- Exclusively designed executive office suites.
- Land lease for 25 years renewable for similar period.
- On-site accommodation for investor’s personnel.
- Affordable cost of living.
- Highly developed infrastructure and telecommunications links.
- Abundant and inexpensive energy.
- Liberty for personnel recruitment and economical workforce.
Through the Emiri Decree establishing the Hamriyah Free Zone, investors are guaranteed the security of investment and full repatriation of profits and capital.
Activities Allowed by the Free Zone
Almost any activity is permitted in HFZ as long as it is environmentally friendly and in accordance with local rules.
Types of Licenses
The type of license that can be issued to an applicant company is defined by the activity that the applicant company is permitted by HFZ to undertake. All License fees are annual.
- Industrial License – This license will allow the holder to import raw materials for industrial purpose. The finished products may be exported outside the UAE. If the finished products are sold in the UAE market then the license holder will need to do this through a local distributor or a local agent.
- Commercial License – This license will allow the holder to import, export, sell, distribute and store items specified on the trade license. If the goods imported into the Free Zone are sold in the UAE market then the license holder will need to do this through a local distributor or a local agent. Customs duty (currently at 5%) shall also be payable.
- Service License – This license allows the holder to carry out the services which are specified on the license within HFZ only. It is generally for consultancy and accounting services and/or legal and domestic services.
Land for Lease
The industrial plots range in size from 2,500 sq.m. and upwards in multiples of 2,500 sq.m. Up to 60% of these plots can be developed to suit investor’s exact requirements.
The annual land rate starts from Dhs 25 per sq.m.
Hamriyah SME Zone
True to its vision of creating an affordable yet world-class free zone, Hamriyah Free Zone Authority has formulated explicit policies and designed special programs to strengthen the small and medium sized enterprise (SME) sector. Hamriyah SME Zone offers investors seven strategic clusters comprising the Oil & Gas Zone; Petrochemical Zone; Maritime City ; Steel City; Construction World; Timber Land and Perfume Land. The size of each land plot in SME Zone is 5,000 sq. m.
Hamriyah MB Zone
A recent addition to its SME oriented strategy, Hamriyah MB Zone is designed to specifically cater to the needs of micro business owners. Whether it’s service or manufacturing or trading, Hamriyah MB Zone offers convenient and practical business solutions for micro business owners. All plots in the MB Zone are already leveled, compacted and fenced. These plots are 2,500 sq. m each.
Land Leasing Terms
Although the minimum lease term is five years, investors do have the option of leasing their plot of land for 25 years renewable for a further period of 25 years. Lease rates are normally fixed for the first 5 years with a rent review at the end of this period.
Hamriyah E-office is a unique, specially designed business package for SMEs. Apart from license fees, company incorporation charges and 9 sq. m. office rent the E-office package includes various service charges. For a package with Commercial or Service License the cost is Dhs 25,000 or Dhs 35,000 for General Trading License. Number of visas per office depends on the license type: 4 visas for the Commercial or Service License and 5 visas for the General Trading License.
Offices Lease Terms
The minimum lease term is one year, renewable, one month notice period is required for termination, and the full rental charge is payable annually in advance. Included in the rent of executive offices are utility charges (water, electricity and air conditioning). Daily housekeeping and car parks are free.
Staff accommodation is provided for an investor’s employees who need on-site housing, facilities which are comfortable, brand new and within a few minutes from the warehouses and office blocks. All technical and non-technical staff are permitted to reside in the HFZ staff accommodation facilities only. No business facilities, including those constructed by the investor, may be used for any accommodation or cooking purposes.
For leased plots of land and for warehouses, factories and standard office units, utilities are charged to the investor and are paid as per consumption based on the prices below. However, investors renting Executive Offices and E-offices are not charged for electricity, water and air conditioning as these charges are included in the annual office rent. Electricity is Dhs 0.30 – Dhs 0.40 per KWA and water is Dhs 30 per 1,000 gallons
All applications for utilities are submitted by the investor directly to the respective suppliers listed below:
- Electricity – the connection and supply is provided by Sharjah Electricity and Water Authority (SEWA) and is charged directly to the investor.
- Water – the connection and supply is also provided by SEWA and is charged directly to the investor.
Banking and money changing facilities are accessible inside Hamriyah Free Zone. A number of well known international and local banks including Standard Chartered Bank, Sharjah Islamic Bank, Dubai Islamic Bank, Abu Dhabi Islamic Bank and Bank of Baroda have established their presence in HFZ. To open an account in any of the banks in the UAE, a company is required to submit the following documents:
- An introductory letter by the Hamriyah Free Zone Authority.
- A copy of the Hamriyah Free Zone license.
- A copy of the Sharjah Chamber of Commerce registration certificate.
- A copy of a Power of Attorney of the authorized signatory regarding bank operations.
- A copy of the company registration certificates.
For opening a bank account in the UAE, a bank may ask for legalization of the documents – attestation by the UAE Embassy in the parent country followed by attestation by the Ministry of Foreign Affairs in the UAE.
License Application and related process for establishing a business presence in Hamriyah Free Zone
Types of Business Presence Legally allowed in the Zone
- Branch of a UAE company
- Branch of an International company
- Single Shareholder Free Zone Establishment (FZE)
- Multi-shareholder Free Zone Company (FZC).
Important aspects of FZEs and FZCs
- An FZE/ FZC is a limited liability entity.
- Not only natural persons but companies can also incorporate FZEs/FZCs in HFZ.
- The registration charge is Dhs 9,000
- FZEs/ FZCs, like branches of local or foreign companies, will require a free zone trade license after incorporation or registration.
- An FZE can have only a single shareholder. A FZC must have a minimum of 2 shareholders and can have up to a maximum of 5 shareholders.
- FZE shares shall be in multiples of Dhs150,000 (for office based projects this can be reduced to the initial set-up cost). FZC shares shall be in multiples of Dhs1,000.
- No shares may be transferred without prior written approval of HFZ .
- The Financial Years shall run from January to December each year, except the commencement of the first year which shall be the date of incorporation.
Minimum Legal Requirements
FZEs and FZCs should abide by the Implementing Rules and Regulations. For FZEs the Implementing Rules and Regulations are equivalent to its Memorandum and Articles of Association, whereas for FZCs the Implementing Rules and Regulations are equivalent to its Articles of Association.
The FZE/FZC should submit its audited financial statements to Hamriyah Free Zone Authority every year within 3 months from the end of the financial year.
If a foreign national is to be appointed as a Director or Manager, HFZA will require that such persons hold valid residence and work permits from the relevant authorities.
The offices of Director and Secretary may be held jointly by a single person.