The Ultimate Guide on Setting up an Industry in Dubai

Industrialism is one of the most profitable businesses out there.  The Industrial sector in Dubai is growing at a rapid pace and with the establishment of free zones, there are many investors looking to set up industries in Dubai. The vast array of opportunities clubbed with the fact that the Government encourages these industries makes it ideal to start a business now. Dubai provides licenses for those wishing to invest in Dubai and also gives a variety of tax benefits.

The Industrial license is provided to enterprises that convert raw materials or natural material or resources into finished products. The conversion can be using manual techniques or using mechanical techniques. Semi-manufactured products can also be used for conversion. Various Activities that come under the industrial license include manufacturing, production, packaging, segregation etc.  The Department of Economic Development Dubai is the authority in charge of issuing these licenses. However, there are certain pre-requisites that are required i.e permissions from the Dubai Municipality and other ministries and authorities as well.

SCOPE OF INDUSTRIAL SECTOR IN DUBAI

There are few businesses that fall into the Industrial sector, they are

  • Textile Manufacturing
  • Metal Casting Industries
  • Automobile Manufacturing
  • Paper Mills
  • Food Manufacturing (Biscuit Manufacturing)

The market in Dubai has immense potential. Free zones also provide 100 per cent ownership and additional expenses for sponsorship can be avoided.  There is good connectivity and the establishment of ports airports and roads provides safe transport of all goods to other parts of the UAE and the GCC countries.

Pre-requisites For an Industrial License in Dubai

The requirements that have to be satisfied before applying for an industrial license are as follows.

  • In Mainland ‘Sponsorship’ is a must. The Company or Factory must have a local sponsor who holds at least 51 per cent of the shares. This requirement cannot be waived off. Only the remaining 49 per cent is available to the foreign investor or license holder.
  • Physical Holding Space – Dubai doesn’t allow for virtual offices, therefore a valid physical office is a must when it comes to applying for an industrial license.
  • Local License- The local area where the manufacturing or operations requires a local license from the same area.
  • Minimum Capital – an Industrial license requires a minimum paid up capital of  250,000 AED( Around 68000 USD$)
  • The application also mandates a minimum of 10 workers.
  • A minimum of 5 Horsepower Machines is required in the factory.

Documentation

Documents are an integral part of applying for an industrial license. The following documents are a must

  1. A detailed report of the Factory including plans, purpose, kinds of tool used, cost of production, paid-up capital as well as sources of funding. Employee data and other relevant information as mandated have to be submitted.
  1. Copy of passports of all representatives as well as residence permits.
  1. A summary of the registration of the sponsor or citizen is required.
  1. If the factory is in partnership with someone, then the partnership agreement.
  1. Copy of the balance sheet
  1. A trade license copy
  1. Approvals  from the National Media Council, Ministry of Health, Ministry of Environment and Water Approval and Ministry of Interior Approval

Procedure

The procedure for applying for an industrial license is as follows

  • Initial approval is required for any factory opening or any substantial change. This approval can be obtained from the concerned authorities. ( Local Authorities)
  •  After the said approval has been obtained, then an application for an industrial license can be submitted to the Department of Economic Development. The DED will then process the application and accept or reject it as the case may be. This will take around 3 months.
  • Within 15 days of accepting it, the DED will notify the applicant
  • Permission from the municipality is also a must in order to construct a factory
  • Further final approvals from several other authorities Chamber of Commerce and Industry, Ministry of Health etc.
  • These said authorities have to be provided with the required documents.
  • This approval usually takes 7-14 days.

While looking at the construction and engineering sector, there has been continuous growth in the last few years. Dubai with such an immense number of high rise buildings makes it an ideal location to start construction based industrialism. According to Oxford Economics, the industrial sector in Dubai is projected to grow by another 34 per cent within the next 8 years.

For someone not familiar with the procedures involved in starting an industry in dubai Setting it up might seem like a tedious task. However, our team at Business Setup Worldwide are experts when it comes to setting up of industries and we have already established ourselves as the forerunners in this field. Feel free to contact us  and we’d be more than happy to help