Foreign Direct Investment (FDI) serves as the lifeblood for the growth of numerous economies, playing a pivotal role in propelling the development of diverse sectors in the Middle East, particularly those extending beyond the confines of the oil industry.
Sharjah in particular is rapidly establishing itself as a burgeoning hub for FDI, a testament to its strategic appeal in the eyes of global investors. Mohamed Al Musharrkh, CEO of the Sharjah FDI Office, known as Invest in Sharjah, underscores this transformation.
Sectors to attract foreign direct investment
In the culture and tourism sector, the UAE’s third-largest emirate aims to leverage the projected $795 billion global market by 2027, as well as the estimated $1.7 billion global market for its mobility and logistics sector.
Simultaneously, in health and wellbeing, substantial FDI is expected as the UAE’s pharmaceutical sector is anticipated to reach $4.7 billion by 2024. The emirate’s commitment to innovation and sustainability is evident in its leadership in Green Technology. According to Al Musharrkh, “Sharjah’s potential in Greentech investments is one of the highest in the region, with major projects like the Waste-to-Energy plant by Bee’ah and the largest solar energy station by SNOC (Sharjah National Oil Corporation).”
In terms of human capital and innovation, Sharjah takes pride in its “talent-rich ecosystem of world-class universities and leading innovation centers.” With the UAE education sector’s expected 5 percent expansion until 2024, this specific sector is poised for further growth.
Furthermore, Sharjah hosts over 35 percent of the country’s manufacturing industries, positioning itself to benefit from the $559 million growth projection for the UAE’s manufacturing sector. Additionally, the emirate could substantially contribute to the UAE’s agricultural market, which is projected to be valued at $1.1 billion by 2024. Sharjah offers significant investment opportunities, particularly in vertical urban farming, aquaculture, and plant genomics.
The Sharjah advantage
A stable investment and political environment are key advantages that Sharjah offers to foreign investors. It distinguishes itself from other areas in the UAE with a range of attractive incentives, including tax breaks, customs exemptions, and access to government funding. These incentives complement its strategic location and business-friendly environment.
Sharjah boasts a streamlined investment process, supported by entities like the Sharjah Investors Services Center (SAEED). Established by Invest in Sharjah in 2019, SAEED is a pioneering business solution provider in the country.
“SAEED offers a wide range of world-class investor-centric services, from company registration and licensing to visa processing, banking, leasing and access to Sharjah’s six dedicated free zones,” Al Musharrkh said.
Since its launch, SAEED has served over 3,500 customers, including more than 1,200 investors. In 2023 alone, SAEED has issued 44 new business licenses and 35 trade names.
On sustainability and green investments
Sharjah acknowledges the significance of integrating sustainability into its initiatives, demonstrating its commitment to the Sustainable Development Goals (SDGs) through a focus on GreenTech and Agri-Food Technology. In recent years, the emirate has successfully attracted green investments and promoted sustainability, highlighted by the SNOC’s unveiling of a 60-megawatt peak solar power project to advance decarbonization goals.
The Sharjah Sustainable City is rapidly developing as “the first fully integrated Net Zero Energy community that treats 100 percent of its wastewater for landscape irrigation.”
In addition, Sharjah launched the Sharjah Waste to Energy plant, marking the region’s inaugural commercial project of its kind. This initiative aligns with the emirate’s objective to minimize greenhouse gas emissions and address the impacts of climate change.
Furthermore, BEEAH’s innovative project, the Commercial and Industrial (C&I) waste recycling facility, stands as another regional first. Equipped with robotics and artificial intelligence (AI), it autonomously identifies, detects, and segregates various types of waste, aiming to achieve 100 percent landfill waste diversion this year.
The role of innovation and technology
Technology is another rapidly rising sector, projected to increase by 12 to 15 percent by 2025. This sector plays a crucial role in driving job creation and attracting foreign direct investment, positioning Sharjah as a competitive and innovative hub.
Leveraging this momentum, the emirate has actively promoted the technology sector through significant investments in research, education and infrastructure. One notable initiative is the establishment of an independent Free Zone Authority achieved by merging existing research and development institutions: the Sharjah Research Technology and Innovation Park and Sharjah Oasis for Technology and Innovation.
This newly formed powerhouse, as highlighted by Al Musharrkh, “will offer comprehensive support for tech companies, including funding, mentorship and training.” Its impact is poised to unlock Sharjah’s potential while solidifying the country’s stature as a global hub for business and entrepreneurship.
Successful FDI projects
In 2023, Sharjah has witnessed various transformative projects fueled by foreign direct investment. In the first quarter, Nikkiso Clean Energy and Industrial Gases unveiled a facility expansion with a total investment of $24.65 million. In the subsequent quarter, Lenovo entered into a partnership with Al Hathboor Bikal.ai, involving a $68.4 million investment. This collaboration aims to offer cutting-edge high-performance cloud computing systems to public and private sector customers.
Meanwhile, PureGlass established its inaugural regional production headquarters in Sharjah’s Sajaa Industrial Area in the third quarter of 2023, attracting an investment exceeding $13 million. In the final quarter, Amazon UAE joined forces with Hamriyah Free Zone Authority to establish a new logistics center, enhancing delivery services for customers in the northern emirates.
The way forward
According to Al Musharrkh, “Sharjah’s long-term economic vision is ambitious, yet achievable, and foreign investment plays a pivotal role in making this vision a reality.” His office will continue to support the emirate in achieving a diversified economy centered on sustainability, knowledge, and innovation.
“Foreign investment plays a key role in Sharjah’s economic vision. Foreign investors can provide the capital, expertise, and technology that Sharjah needs to develop its new sectors and diversify its economy. Foreign investors can also help to create jobs and boost the local economy,” Al Musharrkh says.