Economic Update

Published 23 Feb 2017

Sharjah is actively increasing its profile abroad through trade shows and high-level diplomatic visits in a bid to bolster existing trade and investment partnerships and build new ones.

Overseas interests

In late January a trade delegation led by Saif Mohammad Al Midfa, CEO of Expo Centre Sharjah, visited the northern Italian industrial city of Bergamo to foster trade ties, meeting key stakeholders such as the Bergamo Chamber of Commerce and the Expo Centre Bergamo.

The UAE represents Italy’s largest export market in the MENA region, with bilateral trade reaching $7.4bn in 2015 and Italian imports accounting for $6.58bn of the total, according to Italy’s Ministry of Foreign Affairs. The UAE serves as both a final destination and regional re-export hub for Italian goods, predominantly in the jewellery and machinery segments.

The trade delegation was also part of broader efforts to diversify the emirate’s portfolio of investors through programmes such as “Invest in Sharjah”. Unveiled in September by the Sharjah Investment and Development Authority, or Shurooq, the programme aims to build stronger brand awareness for the emirate among foreign investors and streamline the investment process.

Ahead of the “Invest in Sharjah” launch, Shurooq opened its first permanent UK office in London in April 2016 to promote the emirate to prospective investors. The office also acts as a one-stop shop for European investors with business interests in Sharjah, as the emirate currently has more than 400 UK-based investors, according to Sheikha Bodour Bint Sultan al Qasimi, chairperson of Shurooq.

A month later, Roman Golovchenko, Belarus ambassador to the UAE, met with members of the Sharjah Executive Council, as well as business leaders in the emirate’s free zones and business circles, to discuss industrial cooperation, with potential opportunities in the field of petrochemicals.

A leading player

Further east, Sharjah has also been looking to strengthen ties with India, one of the emirate’s main sources of foreign investment. An estimated 7000 Indian companies operate out of Sharjah, more than 1500 of which do so from the Hamriyah Free Zone (HFZ), representing around 30% of the free zone’s total capital investment, according to Shurooq data.

To boost these numbers, Saud Salim Al Mazrouei, director of the HFZ, led a business delegation to India at the end of October that met with more than 150 businessmen and potential investors. In the same month, Shurooq participated in the second UAE-India Economic Forum held in Dubai.

A month later, the Sharjah FDI Forum underlined the emirate’s potential in attracting more foreign direct investment (FDI) from India. Speaking at the conference, Paras Shahdadpuri, chairman of India’s Nikai Group of Companies, said, “India’s FDI exports account for about $30bn a year, and Sharjah needs to establish strategies and mechanisms to be able to attract a good piece of that pie.” Indians have invested almost $50bn in UAE businesses in the past four years, with about $20bn of that channelled towards real estate assets, according to Shahdadpuri.

At the same event, panellists such as Sudesh Aggarwal, chairman of the India Trade and Exhibition Centre Middle East, emphasised the important role Sharjah plays in the development of smaller-scale businesses in the UAE.

“46% of the UAE’s small and medium-sized enterprises are based out of Sharjah due to their ports, robust infrastructural support, considerably lower establishment costs and minimal regulatory hassles,” he said.

High-level diplomatic visits have also helped to enhance relations between the UAE and India. For example, in late January Sheikh Mohamed bin Zayed Al Nahyan, crown prince of Abu Dhabi and deputy supreme commander of the UAE armed forces, met Indian Prime Minister Narendra Modi, with the two leaders setting the goal of increasing bilateral trade by 60% over the next five years, from around $50bn in 2016.

Policy drive

Sharjah’s recent attempts to raise its profile on the international stage could be buttressed by new UAE-wide investment incentives. These include potential changes to the investment law, for which a draft was finalised in September last year.

Currently, UAE nationals must own stakes of least 51% in any company established in the country, with those operating in free zones exempt from the restriction. However, if approved by the Cabinet, the law would allow for 100% foreign ownership of businesses in some, as yet unspecified, economic sectors.