In the free zone

Saif zone now services around 4150 companies from 91 countries.
[More Images]

Construction Week takes a closer look at Sharjah’s free zones: what are the benefits of operating in these areas and how do construction projects gain from their existence?

Could Sharjah be the best place from where  to conduct your business in the Middle East? If news from the Special Economic Zones (SEZ) Forum held in the Emirate in mid-May is any indication of times ahead, then the answer may be yes.

Incentives put in place by the government ensured that foreign trade rose to US $17.2 billion (AED63 billion) in 2008, according to reports from the Forum.

Story continues below

Advertisement

FEATURED COMMENT Please click here to comment on this article

In addition, Ali Salem Al Mahmoud, director general of the Economic Development Department in Sharjah reported that the industry sector contribution in the GDP increased from $1.5 billion in 2004 to $3.3 billion in 2007.

The cost of setting up a business in Sharjah is less than in other Emirates and the focus on industrialisation has turned it into a commercial centre with an annual growth rate of 12%. The Emirate currently accounts for more than 40% of all industrial activity in the UAE.

Among the major contributors to this success are the Emirate’s free zones, which provide the base for many of the foreign firms that wish to invest and operate in the region.

A concept introduced by the UAE government to enable foreign investment without ties to local firms, the free zones are playing a vital part in the growth of the economy.

The construction industry is benefiting from this in two ways: the ability to set up in the UAE without altering their global company status and operational methods; and secondly, the ease with which foreign firms can operate in the free zones has meant a wider choice of international standard services and products are readily available in the local market.

Two zones currently operate in Sharjah: Al Hamriya Free Zone and the Sharjah International Airport Free Zone (Saif).

Both of which have reported large growth over the past few years, with more expected. Reports from the SEZ Forum indicate a rise in industrial facilities within the zones from 180 in April 2001 to more than 2000 in mid-2008; investments rose from $500 million to $2 billion during the same period.

And opportunities are set to grow further as it was announced at the forum that in order to target further potential investors, Sharjah is planning to set up seven areas – including Construction World - within Saif and Al Hamriyah specifically for small and medium enterprises (SMEs).