Beyond Abu Dhabi and Dubai: Investment Opportunities in the Other Emirates
The UAE has long been an attractive investment destination for entrepreneurs, business startups and established companies looking to expand operations internationally. With a modern, digitally advanced infrastructure, favourable tax incentives and a strategic location offering easy access to the international markets of Africa, Asia and the Middle East, it’s not hard to see its appeal.
Recent relaxation of long-term visa requirements and allowance of full foreign ownership of mainland business will ensure that this trend continues.
Traditionally, the emirates of Dubai and Abu Dhabi have stolen the limelight, with the other 5 emirates often being overlooked by foreign investors. However, the other emirates have unique advantages and are worthy of consideration when looking at setting up a business in the UAE.
This article examines the investment potential of the five smaller emirates: Sharjah, Ras Al Khaimah, Fujairah, Ajman and Umm Al Quwain, looking at the key industries and investment options in each.
Which Emirate to Choose
When selecting which emirate is the best for your new business, it’s important to evaluate the nature of your business, your target market and the key factors that will determine its success. Then you can objectively choose the jurisdiction which best aligns with these goals.
Doing Business in Sharjah
Sharjah is an industrial hub of the UAE, with 35% of the country’s manufacturing facilities located in the emirate. Unlike some of the other emirates, the contribution of hydrocarbons to its GDP is very low, representing only 4% of total GDP.
It is located just to the north of Dubai, and while much more conservative and traditional than its neighbour, it is no less ambitious. Between 2020 and 2021 the emirate recorded a 133% rise in Foreign Direct Investment (FDI)-related job creation and USD237 million in FDI-led capital expenditure.
Most of the business activities in the emirate have traditionally been centred around manufacturing industries such as the production of aluminium, building materials, textiles, paper and plastics. These industries have capitalised on Sharjah’s relatively cheaper setup and running costs when compared to other emirates. However, more recently there has been a drive to encourage diversification into other business sectors such as e-commerce, medical technology, education technology, cybersecurity, financial technology, and smart logistics, and these are predicted to show significant growth and offer high-yield investment opportunities in the coming years.
Sharjah Free Zones
Free zones have been critical to Sharjah’s success. Their flexible incentives such as the allowance of 100% foreign ownership, full repatriation of profits and tax exemptions for export-orientated activities have generated high levels of FDI. There are 6 free zones in the emirate, each attracting investment in a diverse range of activities.
The Hamriyah Free Zone (HFZ) and the Sharjah Airport International Free Zone (SAIF Zone) account for the majority of the industrial activity in the emirate. HFZ supports sectors such as oil and gas, industrial manufacturing and the maritime industry, while SAIF Zone, one of the Gulf’s oldest free zones, attracts businesses with a focus on trade or services.
Sharjah has several other free zones, each dedicated to different business sectors and each helping to further diversify the emirates offering to investors.
Doing Business in Ras Al Khaimah
Ras Al Khaimah, located at the northernmost part of the UAE, has a varied landscape consisting of sandy deserts, coastal strips, salt flats, mangroves and mountains. Its 64km of coastline boasts many luxury hotels which contribute to its developing tourism industry, and the abundance of natural resources found in the emirate such as high-quality deposits of limestone and clay, drive the emirate’s cement and ceramic industries.
Like Sharjah, it’s one of the more cost-effective business destinations in the UAE and attracts large numbers of manufacturing-based businesses that are looking to expand their global footprint and reach the emerging markets of Africa and the Middle East.
Ras Al Khaimah Free Zones
Ras Al Khaimah Free Trade Zone (RAKFTZ) is just an hour’s drive from Dubai and has investment from more than 12,000 companies, representing more than 50 business sectors.
It includes four unique free zone parks that each cater to different business sectors and investor requirements. Its business park, located in the central business district of the city, close to the RAK Exhibition Centre, Hilton Hotel and Beach Club, and Al Manar Shopping Mall, is dedicated to office-based companies and service providers.
Its industrial park is situated 15km north of the city and just 6km from Saqr Port, the largest bulk container port in the MENA region. It supports heavy construction industries and provides easy access to growing regional markets.
Its technology park, located in the South of Ras Al Khaimah, close to Dubai and the Ras Al Khaimah International Airport, is focused on light industries and automated manufacturing.
RAKFTZ also has an academic park with a variety of educational programmes offering undergraduate and graduate courses.
Doing Business in Fujairah
Businesses are attracted to Fujairah largely because of its strategic location. It is the only one of the UAE’s seven emirates located on the Gulf of Oman. This is logistically advantageous since it allows ships transiting to and from it to avoid the heavily congested Strait of Hormuz, which the other six emirates bordering the Arabian Gulf must rely on.
This is one of the key factors behind the success of the Port of Fujairah, as well as the port’s deep waters which allow access to ultra-large crude carrier size ships. The port has used this advantage to become the world’s second largest bunkering destination for cargo ships to refuel and restock on supplies. It has also attracted some of the largest fuel trading and supply companies in the world to establish themselves in the emirate.
As a vital shipping route, it opens up many opportunities for businesses looking to trade in the wider GCC region and beyond.
Fujairah Free Zones
Fujairah Free Zone (FFZ), since it began operating in 1991, has provided a business base to more than 2,000 companies in sectors such as textile manufacturing, gold trading, IT, plastics, cosmetics, and other trading and professional services. It’s low set up costs and proximity to the Port of Fujairah have made it popular with export orientated manufacturing companies.
Creative City is a media free zone dedicated to business activities such as media, events, consulting, education, communication and marketing, music and entertainment, and design and technology. Its inexpensive licensing fees and absence of the requirement for any share capital deposit, make it a good lower cost alternative to other media hubs in the region such as Dubai’s Media City and Abu Dhabi’s twofour54.
Doing Business in Ajman
As one of the smallest emirates in the UAE, Ajman is often overlooked. However, it offers several key benefits to prospective investors. Lower rentals, living and business expenses allow profits to be maximised and overheads to be kept to a minimum. It also offers an affordable alternative to Dubai and Sharjah while still offering easy accessibility to each.
Manufacturing is the main contributor to its GDP, with retail trade, repairing services and real estate also contributing to a lesser extent.
Ajman Free Zones
Established in 1988, Ajman Free Zone, alongside Ajman Port is a major contributor to the emirates economy and has helped drive industrial development.
It offers several types of business licences such as a commercial licence for importation, exportation and distribution activities, an industrial licence for import of raw materials and manufacturing activities, and a services licence to allow for the practice of consultancy services.
The free zone currently has more than 12,000 companies operating from it, exporting to over 65 countries.
Doing Business in Umm Al Quwain
Located between Ras Al Khaimah and Ajman, Umm Al Quwain is the smallest emirate, both in terms of population and the size of its economy, as such it has a much quieter feel than the other emirates. No significant finds of oil have ever been made and instead the emirate relies on revenue from other industries such as tourism, trading and manufacturing.
Fishing is the main contributor to the emirate’s economy, and it exports seafood throughout Europe and the Middle East. Other key sectors are real estate, trading and manufacturing. Tourism is also being heavily promoted and through its recently launched ‘blue economy’ strategy, the emirate hopes to capitalise on its unique and diverse landscape to attract more visitors.
Umm Al Quwain Free Zone
Umm Al Quwain Free Zone (UAQ FTZ) is ideally located just 45 minutes from Dubai International Airport and close to the UAE’s main seaports. It is ideal for small startups and sole traders who can benefit from its relatively lower setup costs, yet accessible location.
It offers the following business licences:
- · Commercial Licence – For import, export and distribution activities
- · General Trading Licence – A wide range of activities permitted allowing trading in many different commodities
- · Consultancy Licence – To provide professional and consultancy services
- · Freelance Permit – For individual sole traders
- · Industrial Licence – For businesses engaged in importation of raw materials, manufacturing and exporting of product
- · Service Licence – For businesses such as logistics, courier services, insurance services, tour services, car rental etc.
How Can PRO Partner Group Help?
PRO Partner group has extensive knowledge of business practices across the GCC. We have close connections with key government departments and Freezone Authorities in the UAE and understand how each emirate differs and what each has to offer. We can advise you on the right emirate for your business and can guide you through the incorporation process.
If you need assistance with setting up your company in any of the UAE’s seven emirates or any other related onshore, freezone or offshore company setup, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman, Qatar or Saudi Arabia, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at firstname.lastname@example.org or complete the contact form below and we will be delighted to assist you.