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Dubai’s manufacturing sector ranking third in GDP contribution, plays a key role in boosting the
emirate’s economy. The UAE sees more of its economic growth coming from manufacturing as
the country focuses more on new ideas and variety.
To set up a manufacturing business, you need to get a manufacturing license in Dubai first.
This license lets you make products in the city. If you’re a foreign investor or a local business
owner looking to start and run a company in Dubai, you should know the costs and steps to get a
manufacturing license.
Key Takeaways
- A manufacturing license is required for legal production in Dubai, ensuring regulatory compliance and access to government support.
- Four license types: Industrial, SME, Free Zone, and Specialized, each catering to different business scales and regulatory needs.
- Costs range from AED 15,000 to AED 50,000, with additional expenses for premises, equipment, and employee visas.
What Is an Industrial Manufacturing License in Dubai?
A Manufacturing license for industry in Dubai or any other place in the United Arab Emirates
gets approval when the business activity has an industrial nature, like making or refining
petrochemicals. If you’re not sure if a business activity is industrial here’s a simple way to tell:
it’s industrial if it needs special factory equipment. Here are some examples of industrial
activities:
- Making or mixing chemicals in large amounts
- Baking bread for selling
- Shaping metals
- Producing paper and things made from paper
- Making and putting together machines, equipment, or engines
- Putting food in packages, including filling bottles with fizzy drinks
Why Do You Need a Manufacturing License?
In the UAE, businesses that produce goods must have a manufacturing license. This includes
companies involved in food processing electronic assembly, and machinery production, among
others.
The license acts as a legal permit for running manufacturing facilities and ensures companies
follow the country’s rules. Getting a manufacturing license offers several advantages, including:
1. Legal Compliance
It makes sure your business runs within the UAE’s legal framework and follows all relevant
regulations.
2. Market Access
It gives you the right to make and sell your products in the UAE, a market with high consumer
demand and room for growth.
3. Government Support
It creates chances for various government perks and aid programs, like tax breaks financial help,
and access to industrial spaces and equipment.
4.Investment Opportunities
It boosts your trustworthiness and draws in possible investors making business growth and
expansion easier.
Types of Manufacturing Licenses Available in Dubai
1. Industrial Manufacturing License
This license is key for companies doing big manufacturing jobs that have a big effect on the
environment or need lots of resources, like energy and water. Businesses in petrochemicals,
metals, drugs, and building materials often need an industrial manufacturing license. The process
to apply includes looking at the impact on the environment, safety steps, and following industry
rules.
2. Small and Medium Enterprise (SME) Manufacturing License
The SME manufacturing license targets smaller manufacturing operations. It suits businesses
with limited production capacity and less impact on the environment. This covers makers of
consumer goods light machinery, and parts. Getting an SME manufacturing license is usually
easier than an industrial one. It focuses on meeting local safety rules and standards.
3. Free Zone Manufacturing License
Free zones in Dubai give out special manufacturing licenses to companies that work in these
areas. These licenses come with perks like no taxes complete foreign ownership, and simple
business operations. Each free zone has its own set of rules, and companies need to follow what
the free zone authority says.
4. Specialized Manufacturing License
Some industries need special manufacturing permits because of what they make or how they
make it. Companies that produce food and drinks have to follow strict health and safety rules.
Drugmakers must stick to global medical standards. To get these special approvals, businesses
have to pass a tough inspection by the right authorities. The Ministry of Health and Prevention
looks at applications to make medicine. The Abu Dhabi Agriculture and Food Safety Authority
checks requests to produce food.
How to Get a Manufacturing License in Dubai
Trade licenses are required for enterprises to legally operate in the UAE. If you want to convert
parts or raw materials into finished goods, you must obtain a manufacturing trade license;
however, additional license choices are available. To obtain a manufacturing trade license in
Dubai, follow these six steps.
Step #1: Choosing Your Legal Structure
Pick a legal structure that fits your business objectives. Options include Limited Liability
Company (LLC), Public Joint Stock Company (PJSC), and more.
Step #2: Choose a company name
Picking a name for your UAE manufacturing company means you need to play by the rules. No
swearing or rude words allowed, and keep your hands off other people’s names or big-shot
brands. Make sure to slap a legal tag on it, like FZE or LLC, and run it past the Registry Office
to make it all official.
Step #3: Define your business activity
Companies need to outline their activities to obtain a trade license. The license permits specific
operations limited to those stated. If you’re looking to set up shop in Dubai, you’ll need to select
your business activities from an extensive catalog of over 2,000 options available on the DED
website. However, it’s crucial to adhere to the listed activities. Engaging in operations not
covered by your license can result in financial penalties.
Step #4: Select your business jurisdiction
Your chosen business activities determine your manufacturing business’ kind of setup and trade
license. Dubai has two main business jurisdiction types: Free Zone and Mainland. Each has
specific benefits, regulations, and operating guidelines.
Free Zone companies are the most popular and cost-effective of the two. Foreign people can own
their businesses all by themselves with this choice. But if a “Free Zone” business wants to do its
thing inside the UAE without any hiccups, it’s gotta tackle a few more chores, like setting up a
branch or teaming up with a seller. With over 40 “Free Zones” up for grabs, every single one has
got its eye on different kinds of hustles and bustling commerce stuff.
A Mainland company setup allows you to trade within the UAE market without extra steps.
However, a local sponsor (an Emirati national) must hold 51% of the company’s shares.
Selecting the correct business setup for your manufacturing business can seem complicated.
Step #5: Get local municipality approval
Heading into Dubai to set up or manage a factory? Well, you need to get the thumbs up from the
local municipality crew first. Now, this means you should hand over a hefty file detailing your
plant’s design, the money talk, what gear you’re rolling with, and other bits and pieces. But if
you’re kicking it in a Free Zone, this requirement does not apply.
For mainland companies, they need some extra handshakes. You’ll have to get clearances from
the Dubai Chamber of Commerce and Industry, the Ministry of Health, and the Ministry of
Environment and Water.
Step #6: Apply for your trade license
To get a manufacturing trade license, your business needs to rent or own a physical place. You
need at least AED 250,000 to start and no fewer than 10 workers.
After getting all your business registration and setup papers sorted, you’ve gotta hand them over
to the officials in the UAE for your manufacturing trade license application. (Also read: how to
secure industrial license)
How Much Does a Manufacturing License Cost in UAE?
Getting a manufacturing license in Dubai can set you back somewhere between AED 15,000 and
AED 35,000, and it might even hit 50,000 at times. However, the actual cash you shell out will
vary, thanks to a bunch of things like your emirate location, the type of products you’re pumping
out, and the size and intricacy of your operation.
You should think about extra expenses on top of the license fee too.
- Procedural costs
- Cost of leasing a warehouse or industrial premises
- Cost of obtaining approvals from other authorities
- Cost of equipment and machinery
- Cost of visas for employees
Remember, these figures are pretty much guesses, and what you’ll pay could be more or less
based on what’s up with your situation. You should talk to a UAE reliable business setup advisor
like Emifast.
Why Choose Emifast for Your Industrial Manufacturing License?
Need to lock down an Industrial Manufacturing License? Look no further than Emifast! Our
squad of company formation experts has loads of years under its belt assisting companies in both
mainland and free zone setups. They get how the whole thing works. They’ll walk you through
the whole paper shuffle and make sure you snag all the right sign-offs, so the ride to getting your
license is like sliding on ice.