Sharjah envisages a “huge opportunity” in building free zones for the finance and environment sectors, acording to a senior official, as the emirate embarks on a major push for foreign investment.
There are currently six free zones either operational or in the pipeline in Sharjah – and Marwan Al Sarkal, the chief executive of the Sharjah Investment and Development Authority (Shurooq), sees the potential for more.
Free zones allow foreign companies to operate 100 per cent owned businesses, sidestepping onshore rules that oblige most international businesses to find a local partner.
“One of the sectors is the financial sector. This is a huge opportunity for a new free zone to be established,” said Mr Al Sarkal. “However Sharjah government have not yet decided if it’s going to go to that level.”
Existing free zones serving the financial sector in the wider UAE include the Abu Dhabi Global Market on Al Maryah Island and the Dubai International Financial Centre (DIFC).
“We need to study Dubai and Abu Dhabi,” said Mr Al Sarkal. “Dubai has been very successful in attracting international banks to it. And I believe maybe Sharjah can have an opportunity.” Discussions over the formation of a Sharjah financial free zone remain at a “high level” and have not resulted in a specific study, Mr Al Sarkal added.
There is also “huge potential” for Sharjah to build a free zone covering the environmental sector – for businesses in, for example, recycling and waste-to-energy technology – Mr Al Sarkal said. Sharjah is already home to Bee’ah, a public-private partnership specialising in recycling, waste management and the environment.
“Bee’ah has a magnificent facility in Sharjah. If more companies around the world knew about it, they might want to be part of that future project,” said Mr Al Sarkal.
But he added that Sharjah would not be developing free zones for the sake of it. “How is the future looking towards creating more free zones? I think there is always a market for it, if you differentiate yourself,” he said.
Sharjah’s main operational free zones are the Hamriyah Free Zone and Sharjah Airport International Free Zone, known as Saif Zone. Sharjah Healthcare City was formed in 2012, while plans are also under way for Sharjah Publishing City and Sharjah Media City Free Zone.
The AUS Research, Technology and Innovation (RTI) Park is the sixth free zone currently in development on a large plot of land near the American University of Sharjah.
Hussain Al Mahmoudi, the chief executive of AUS Enterprises, which is managing the project, confirmed to The National that the project would have free-zone status.
The research and development park will aim to attract both local and international businesses, with phase one of the development expected to be operational in 2018, Mr Al Mahmoudi said.
“At the moment we are working on phase one, and in phase one we are targeting around 200 companies,” he said. “[It will] hopefully transform the whole city into a knowledge economy.”
Mr Al Mahmoudi said the first phase of the project was being “financed by the government”, but declined to specify the budget. It will include infrastructure, offices, science laboratories and residential areas, he said.
Sharjah is embarking on a massive drive for foreign investment. Shurooq last Friday held a Sharjah Day in London, geared towards British companies looking to set up in the emirate, and has opened an office in the UK capital designed to boost international investment. It plans to launch a global campaign in September entitled “Invest in Sharjah”.
Lee Jennings, chief executive of the UK-based Jennings International Business Development Associates, which helps companies to become established in the UAE, said the decision on whether to set up in a free zone or onshore depends on the business in question.
“It’s horses for courses,” said Mr Jennings, who previously worked at the British Embassy in Dubai, most recently in a trade role for the Welsh government.
“There are some companies that really prefer to operate in the free zones, with 100 per cent foreign ownership. There are other times where it’s really beneficial to have a strategic local partner that can open doors for you, that can create other business connections as well. Our role is to advise our clients on the best way forward based on what their requirements are.”1
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