Industrial Setup in the UAE
The UAE offers a growing and business-friendly environment for industrial setups, making it an attractive destination for investors and entrepreneurs looking to establish manufacturing and industrial businesses. With its strategic location, world-class infrastructure, and favorable policies, the UAE is well-positioned as a hub for industries ranging from manufacturing and production to logistics and distribution.
Why Choose the UAE for Industrial Setup?
In the UAE, there are three main types of companies you can form:
Strategic Location: The UAE is strategically located between Europe, Asia, and Africa, providing easy access to global markets. This makes it an ideal location for manufacturing and distributing goods internationally.
Advanced Infrastructure: The UAE boasts state-of-the-art infrastructure, including modern ports, airports, and logistics networks, making it easier to import raw materials and export finished goods.
Business-Friendly Environment: The UAE offers a pro-business government that supports industrial growth with policies such as tax exemptions, low import duties, and streamlined regulatory procedures.
Free Zones for Industry: Many free zones in the UAE are tailored to the industrial sector, offering benefits such as 100% foreign ownership, tax exemptions, and simplified regulations. This makes it easier and more cost-effective to set up industrial businesses.
Skilled Workforce: The UAE has a diverse and skilled workforce, with many specialized workers available in sectors such as engineering, construction, and manufacturing.
Access to Raw Materials: The UAE imports a wide range of raw materials and is home to several industrial hubs that are key suppliers of products like metals, plastics, and chemicals.
Steps for Setting Up an Industrial Business in the UAE
1. Choose the Right Location and Free Zone:
Step 1: Choose Your Business Type
If you wish to set up an industrial facility, free zones like Jebel Ali Free Zone (JAFZA), Dubai Industrial City, and RAK Free Trade Zone offer excellent infrastructure and benefits for manufacturing businesses. These zones offer custom-built warehouses, easy access to transportation networks, and tax incentives.
If you prefer a mainland setup, you will need to identify a suitable plot of land, warehouse, or factory space. Mainland setups provide more flexibility in terms of local market access.
2. Select the Business Activity and Type of License:
The UAE offers various licenses based on the type of industry. For industrial setups, you’ll likely need an industrial license, which is issued by the relevant Department of Economic Development (DED) or free zone authority. The license will depend on the specific type of manufacturing or industrial activity you plan to pursue.
Examples of industrial licenses include:
• Manufacturing License: For companies involved in producing goods.
• Production License: For companies focused on production and assembly.
3. Legal Structure:
You can establish an industrial company as a Limited Liability Company (LLC) on the mainland, which will require a local sponsor for foreign investors (unless you qualify for 100% ownership in certain sectors).
For free zone setups, you can establish 100% foreign-owned companies without the need for a local sponsor.
Branch offices of international companies are also an option if you want to expand an existing business into the UAE.
4. Obtain Approvals and Permits
Depending on your specific industrial activity, you may need approval from different authorities, such as the Ministry of Economy, Environmental Agencies, or Health and Safety regulators.
Certain industries like chemicals, pharmaceuticals, and heavy manufacturing may require additional environmental or safety permits to ensure compliance with local regulations.
5. Build Your Facility
In free zones, companies often have access to ready-built industrial facilities or warehouses. If you are in the mainland, you will need to either lease or purchase a plot of land to construct your facility.
The UAE provides advanced infrastructure with a variety of options ranging from industrial parks to specialized manufacturing zones.
6. Hire Employees and Obtain Visas
Once your industrial setup is in place, you will need to hire employees. The UAE offers a diverse labor market, and companies in industrial sectors can hire skilled workers in areas such as production, engineering, logistics, and management.
You will also need to apply for work visas for your employees and company owners.
7. Open a Business Bank Account
To operate smoothly, you’ll need to open a business bank account. The UAE has a wide range of banking services that cater to industrial and manufacturing businesses.
Key Industrial Free Zones in the UAE
The UAE has several free zones specifically designed to support industrial growth. Here are some of the most popular options for industrial setups:
Jebel Ali Free Zone (JAFZA): One of the largest and most established industrial free zones, JAFZA offers world-class infrastructure, proximity to Jebel Ali Port, and access to global markets. It supports a variety of industries, including manufacturing, logistics, and trading.
Dubai Industrial City (DIC): DIC is a large industrial hub in Dubai designed to support industries such as manufacturing, logistics, and construction. It offers custom-built warehouses, transportation links, and attractive tax incentives.
RAK Free Trade Zone: Located in Ras Al Khaimah, this free zone offers various options for industrial setups, including flexible land and warehouse leasing. It is ideal for industries like light manufacturing, assembly, and packaging.
Abu Dhabi Industrial Zone (KIZAD): This is a key industrial and logistics hub in Abu Dhabi, offering access to ports, airports, and highways. It is ideal for heavy industries, logistics, and manufacturing.
Sharjah Airport International Free Zone (SAIF Zone): Located in Sharjah, this free zone is known for its support of manufacturing and light industrial activities, including electronics, textiles, and packaging.
Benefits of an Industrial Setup in the UAE
Tax Exemptions: Many free zones offer tax exemptions, including no corporate tax for a specified period (usually 15-50 years), no income tax, and no customs duties on imports and exports.
100% Foreign Ownership: Free zone businesses allow 100% foreign ownership, meaning you can retain full control of your company without needing a local partner.
Modern Infrastructure: The UAE offers world-class infrastructure for manufacturing, including warehouses, distribution centers, and transport links to ports and airports.
Easy Access to Global Markets: With its strategic location and advanced logistics network, the UAE provides businesses with easy access to regional and international markets.
Supportive Business Environment: The UAE government offers various incentives, subsidies, and support services to encourage industrial growth, including access to skilled labor and specialized training programs.
Conclusion
The UAE is an excellent choice for setting up an industrial business due to its strategic location, modern infrastructure, business-friendly policies, and access to international markets. Whether you are looking to establish a small manufacturing unit or a large industrial facility, the UAE provides a variety of options and incentives to help you succeed. By choosing the right free zone or mainland location and navigating the steps to compliance, you can start and grow your industrial business in one of the world's most competitive markets.
