Dubai is a pivotal hub for manufacturing, propelling the UAE to lead the region in industrial competitiveness. Substantial investments in technology, resilient supply chains, a last-mile logistics network, and world-renowned ports power the industrial ecosystem. This strategic infrastructure has positioned Dubai as a key player in the global manufacturing arena. 

Top manufacturing companies in Dubai, such as Unilever and M Glory Group, leverage advanced technologies and functional infrastructure to streamline operations and boost productivity. They also benefit from programs designed to enhance local production and in-country value (ICV), further solidifying Dubai’s role in the industrial sector. Driven by such initiatives, the manufacturing and industrial sector has seen consistent year-on-year growth. In the first nine months of 2023, it contributed 8.3% to Dubai’s GDP, amounting to US$7.46 billion (AED 27.4 billion). Further enhancements to modes of production and scaling of exports in the coming years can significantly contribute to doubling Dubai’s GDP in the next decade – a major goal of the D33 agenda. 

This blog is related to Manufacturing and licensing is a part our UAE Business Setup Guide: Mainland and Freezones Pillar blogpost

Additionally, the Dubai Industrial Strategy 2030 aims to make the city a preferred manufacturing platform for global businesses. This strategy focuses on six priority sub-sectors: aerospace; maritime; aluminium and fabricated metals; pharmaceuticals and medical equipment; food and beverages; and machinery and equipment. These sectors are integral to achieving Dubai’s vision of becoming a leading manufacturing hub globally. 

What is Manufacturing? 

Manufacturing refers to the production process where raw materials are transformed into final products ready for market distribution. This process can include activities such as assembling components, chemical or biological processing, and packaging. The UAE’s manufacturing sector is diverse. According to EmiratesNBD research the top industries are: 

• Pearls, Stones and Precious Metals 

• Base Metals 

• Plastic and rubber products 

• Food & Beverages 

• Parts and machinery 

• Chemical products 

• Wood pulp and paper products 

• Vehicles 

• Ceramic products and glass 

• Textiles 

 Along with those, the RAKEZ mentions industries such as: 

• Construction materials 

• Petroleum products 

• Packaging materials 

• Metal and metal components 

• Medical and healthcare equipment 

• Electronic equipment and appliances 

Manufacturing Company Set-Up Costs 

The cost of obtaining an industrial license in the UAE, including company registration, administrative fees, and immigration charges, is approximately AED 18,000. Additional costs vary depending on the size and location of the warehouse, power requirements, and storage needs. Employers should also account for visa applications, worker accommodations, and other logistics. Also, note that there is no longer a requirement to show proof of funds or deposit capital. 

Free Zone vs. Mainland: Benefits and Considerations 

When setting up a manufacturing business in the UAE, choosing between a free zone and a mainland setup is a critical decision that impacts your operations, costs, and overall business strategy. Below are the key benefits and considerations for each option: 

Free Zone Benefits 

• 100% Foreign Ownership: Free zones allow complete ownership by foreign investors, meaning you can maintain full control of your business. 

• Simplified Setup: The process of setting up a company in a free zone is generally quicker and more straightforward, with streamlined regulatory requirements. 

• Focused Industry Clusters: Many free zones are specialized, offering a business environment tailored to specific industries, such as manufacturing, logistics, or technology. 

Free Zone Considerations 

• Restricted Market Access: Free zone companies are restricted from directly trading within the UAE mainland without a local distributor. This limitation can impact your ability to reach local customers. 

• Geographical Constraints: Free zone companies must operate within the boundaries of the specific free zone where they are registered, which might limit expansion opportunities. 

• License Restrictions: Free zone licenses are often industry-specific, meaning your business activities might be limited to those specified in the license. 

Mainland Benefits

• Wider Market Access: Mainland companies can trade freely within the UAE and internationally without needing a local distributor, providing greater market access and flexibility. 

• No Geographical Restrictions: Mainland businesses can operate anywhere in the UAE, allowing for greater flexibility in choosing business locations. 

• Diverse Business Activities: Mainland licenses offer more flexibility in terms of the types of business activities you can undertake, allowing for diversification and expansion into new sectors. 

Mainland Considerations 

• Local Sponsorship Requirement: Mainland companies typically require a UAE national to hold a 51% ownership stake, unless you opt for specific business structures that allow for 100% foreign ownership under certain conditions. 

• Higher Operating Costs: Mainland businesses often face higher setup and operating costs due to the need for local sponsorship, additional regulatory requirements, and potentially higher lease costs. 

For more details about the differences between mainland and freezones, see UAE Business Setup Guide: Mainland and Freezones. 

Popular Free Zones for Manufacturing in the UAE 

The UAE offers several free zones that are popular for setting up manufacturing companies due to their strategic locations, infrastructure, and incentives. The most popular free zones in the UAE to set up manufacturing companies are JAFZA, RAKEZ, DIC, Hamriyah Freezone, Fujairah Freezone, Ajman Freezone. 

To know more about the freezones in the UAE, see Free Zones in the UAE: Exploring the Business Oases. 

Step-by-Step Guide to Incorporating a Manufacturing Company in the UAE 

Incorporating a manufacturing company in the UAE involves a systematic approach that ensures compliance with local regulations and optimizes the potential for business success. Here’s a comprehensive guide to help you navigate the process: 

Prepare the Essential Documents 

• Business Plan: Develop a detailed business plan that outlines your manufacturing activities, target market, operational strategies, and financial forecasts. 

• Application Form: Complete a detailed application form specific to the jurisdiction (mainland or free zone) where you plan to establish your business. 

• Plant Layout Design: Create a comprehensive layout of your manufacturing facility, including space allocation for machinery, storage, and production lines. 

• Process Flow Chart: Develop a process flow chart that outlines the steps involved in your manufacturing operations, from raw material input to final product output. 

• Equipment and Machinery List: Compile a list of all equipment and machinery required for your manufacturing operations, including specifications and quantities. 

• Shareholders’ Documents: Prepare copies of passports and visa/entry stamps for all shareholders involved in the company. 

Learn more at Essential Documents for Company Incorporation in the UAE 

Choose the Business Activity 

• Determine Manufacturing Activities: Clearly define the specific manufacturing activities your company will undertake, such as assembling, processing, or packaging goods. Ensure that these activities are permissible under UAE regulations and align with the requirements for obtaining an industrial license. 

Understand more about Business Activities in the UAE. 

Select a Location 

• Mainland vs. Free Zone: Decide whether to establish your company on the mainland or in a free zone. Consider the benefits and limitations of each option, such as tax exemptions, customs duties, and the scope of business operations allowed. We discussed this earlier in this article. You may want to move up and check again or delve deep into the related article. 

Determine the Legal Structure and Ownership 

• Legal Structure: Choose the right legal structure for your company (e.g., Limited Liability Company (LLC), Free Zone Company). The structure you select will influence factors like liability, profit distribution, and regulatory requirements. 

• Ownership Requirements: If you opt for a mainland setup, determine whether a local sponsor or partner is required. For free zones, 100% foreign ownership is typically allowed, which may be a key consideration for international investors. To understand the business requirements, please see Why Would You Need an Emirati Partner? 

Obtain Initial Approvals 

• Submission of Documents: Submit your business plan, application form, and other required documents to the relevant authorities. For mainland companies, this may be the Department of Economic Development (DED), while for free zones, it will be the respective free zone authority. 

• Preliminary Approvals: Obtain initial approvals from these authorities, which may include environmental, health, and safety clearances depending on your manufacturing activities. 

Reserve a Trade Name 

• Trade Name Reservation: Choose a unique trade name that complies with UAE naming regulations and reserve it with the appropriate authority. The trade name should reflect the nature of your business and must not conflict with existing trademarks. 

Apply for an Industrial License 

• Document Submission: Prepare and submit all necessary documents, including your business plan, process flow chart, plant layout, and list of equipment, to the licensing authority. 

• Safety and Environmental Compliance: Depending on your location, you may need to submit additional documents demonstrating compliance with safety and environmental regulations, such as fire safety certificates and environmental impact assessments. 

Secure a Lease Agreement 

• Leasing a Facility: Lease a manufacturing facility that meets the operational requirements of your business and complies with the regulations of the chosen jurisdiction. The facility must be suitable for your manufacturing activities and provide adequate space for equipment, storage, and production. 

• Facility Compliance: Ensure that the facility meets the standards set by local authorities, such as those related to health, safety, and environmental protection. 

Complete the Registration Process 

• Final Registration: Finalize your company’s registration with the relevant authority. This step may involve additional approvals from entities like the Ministry of Industry and Advanced Technology (MoIAT), Civil Defence, and local municipalities. 

• Issuance of License: Once all requirements are met, the industrial license will be issued, allowing you to legally commence manufacturing operations in the UAE. 

Hire Staff and Obtain Visas 

• Staffing Requirements: Hire the necessary number of employees to operate your manufacturing facility. Ensure that your hiring practices comply with UAE labor laws and regulations. 

• Visa Processing: Apply for work visas for your employees through the appropriate immigration channels. This includes obtaining labor cards, residence visas, and health insurance for your staff. 

Set Up Utilities and Infrastructure 

• Utility Connections: Arrange for the connection of essential utilities, such as electricity, water, and telecommunications, to your manufacturing facility. This is crucial for maintaining efficient and uninterrupted operations. 

• Infrastructure Setup: Ensure that the infrastructure within your facility, including ventilation, waste management, and storage systems, is adequately set up to support your manufacturing processes. 

Commence Operations 

• Operational Readiness: Once all approvals are in place and your facility is fully equipped and staffed, you can begin your manufacturing activities. Ensure continuous compliance with UAE regulations to maintain your license and avoid any operational disruptions. 

Key Regulatory Authorities Involved in Manufacturing Company Setup 

Establishing a manufacturing company in the UAE involves navigating various regulatory requirements. Several key authorities play a crucial role in overseeing the process, ensuring compliance with local laws and standards: 

Department of Economic Development (DED)

• The DED is the primary authority responsible for issuing trade licenses for mainland companies. It also oversees the registration of businesses and ensures compliance with economic regulations. Each emirate in the UAE has its own DED, which governs business activities within its jurisdiction. 

Ministry of Industry and Advanced Technology (MoIAT)

• The MoIAT is responsible for formulating and implementing industrial policies in the UAE. It oversees the issuance of industrial licenses and ensures that manufacturing companies adhere to national standards for safety, quality, and environmental protection. 

Free Zone Authorities

• Each free zone in the UAE has its own governing authority, which regulates business activities within its jurisdiction. These authorities are responsible for issuing licenses, providing infrastructure, and ensuring compliance with free zone regulations. 

Environment Protection and Development Authority (EPDA)

• For companies in Ras Al Khaimah and other specific regions, the EPDA ensures that businesses comply with environmental regulations. It conducts environmental impact assessments and monitors adherence to sustainability standards. 

Department of Civil Defence

• The Civil Defence department is responsible for fire safety and emergency preparedness in manufacturing facilities. It conducts inspections, issues safety approvals, and ensures that businesses meet the required safety standards. 

Health, Safety, and Environment (HSE) Authorities

• Various emirates have specific HSE authorities that oversee occupational health and safety standards in the workplace. These authorities ensure that manufacturing companies provide a safe working environment for their employees. 

Emirates Authority for Standardization and Metrology (ESMA)

• ESMA sets national standards for products and manufacturing processes. It ensures that manufactured goods meet UAE quality standards and provides certifications that are essential for market access. 

Local Municipalities

• Local municipalities in each emirate are responsible for approving building permits, zoning regulations, and other aspects related to the physical setup of manufacturing facilities. They also play a role in waste management and environmental compliance. 

Ministry of Human Resources and Emiratisation (MOHRE)

• MOHRE oversees labor relations, employment regulations, and worker rights in the UAE. Manufacturing companies must comply with MOHRE’s guidelines regarding hiring practices, employee contracts, and workplace conditions. 

Telecommunications and Digital Government Regulatory Authority (TDRA)

• For manufacturing companies involved in the production of electronic equipment or technology, the TDRA regulates telecommunications and ensures compliance with digital standards. 

Essential Documentation and Compliance Requirements 

After understanding the key regulatory authorities involved in setting up a manufacturing company in the UAE, it is crucial to be aware of the essential documentation and compliance requirements that must be met to ensure a smooth and legally compliant operation. These requirements vary depending on the type of business, location (mainland or free zone), and the specific manufacturing activities involved. 

Business Plan 

• A comprehensive business plan outlining the nature of the manufacturing activities, target markets, operational strategies, and financial projections. This document is often required by both free zone authorities and the Department of Economic Development (DED) for the initial approval process. 

Detailed Application Form 

• A completed application form specific to the chosen jurisdiction (mainland or free zone), detailing the business activities, ownership structure, and other relevant information. This form is submitted to the respective licensing authority for review. 

List of Trade Names

• Before proceeding with the company registration, you must reserve a unique trade name that complies with the UAE’s naming conventions. This name must be approved by the relevant authorities (e.g., DED or free zone authority). 

Memorandum of Association (MOA)

• The MOA outlines the company’s structure, ownership details, and business activities. It is a legally binding document that must be submitted during the company registration process. 

Power of Attorney

• If the company’s shareholders or directors are not present in the UAE, a power of attorney may be required to authorize a representative to act on their behalf in the setup process. 

Lease Agreement 

• A valid lease agreement for the manufacturing facility or warehouse, which is a prerequisite for obtaining an industrial license. The facility must meet the requirements of the relevant authorities and be located within the jurisdiction of the license being applied for. 

Plant Layout and Process Flow Chart 

• A detailed layout of the manufacturing plant and a process flow chart illustrating the production process. These documents are essential for obtaining environmental and safety approvals from relevant authorities, such as the EPDA and HSE authorities. 

List of Equipment and Machinery 

• An inventory of all equipment and machinery to be used in the manufacturing process. This list is required for customs clearance, as well as for obtaining the necessary approvals from the regulatory authorities. 

Environmental Impact Assessment (EIA) 

• Depending on the nature of the manufacturing activities, an Environmental Impact Assessment may be required. This assessment evaluates the potential environmental effects of the proposed operations and must be approved by the relevant environmental authority (e.g., EPDA). 

Health and Safety Compliance Certificates

• Certificates confirming that the manufacturing facility complies with all health, safety, and environmental regulations. These certificates are typically issued after inspections by the Civil Defence, HSE authorities, and other relevant bodies. 

Passport Copies and Visa Documentation

• Copies of the passport, visa, and entry stamp of the company’s shareholders, directors, and key employees. These documents are necessary for company registration and visa processing. 

Technical Support Service (TSS) Approval

• For specific industries, particularly those involving hazardous materials or complex manufacturing processes, TSS approval may be required. This ensures that the facility is equipped to handle the specific technical requirements of the manufacturing process. 

Emirates Authority for Standardization and Metrology (ESMA) Certification

• Certification from ESMA may be required to ensure that the products being manufactured meet national quality and safety standards. This is especially important for goods that will be sold within the UAE or exported to other countries. 

Financial Audits and Reports 

• After your company is established and becomes operational, annual financial audits and reports are required to maintain compliance with the UAE’s financial regulations. These documents ensure transparency and adherence to the country’s financial laws. 

Industrial Zones, Warehousing Facilities, Logistics Hubs, and Key Regions 

The UAE’s industrial landscape is marked by strategically developed industrial zones, warehousing facilities, and logistics hubs that are crucial for the success of manufacturing companies. These zones offer businesses an environment that is conducive to growth, innovation, and efficiency. Key regions across the UAE, including Dubai, Abu Dhabi, and Ras Al Khaimah, play a pivotal role in the country’s industrial development. 

Industrial Zones

Industrial zones in the UAE are designed to provide comprehensive support to manufacturing companies. They offer ready-made infrastructure, regulatory ease, and access to essential utilities, which significantly reduce the setup time and costs for businesses. Notable manufacturing industrial zones include:

• Jebel Ali Free Zone (JAFZA) in Dubai: One of the largest free zones in the world, JAFZA offers state-of-the-art facilities and is strategically located near Jebel Ali Port, providing easy access to global markets. 

• KIZAD (Khalifa Industrial Zone Abu Dhabi): Located near Khalifa Port, KIZAD is a key industrial zone that offers extensive land plots, warehousing options, and access to the Emirates’ major transportation networks. 

• RAKEZ (Ras Al Khaimah Economic Zone): Known for its cost-effective solutions, RAKEZ provides manufacturing companies with access to a wide range of facilities, including warehouses, land plots, and office spaces. 

• Sharjah International Airport Free Zone (SAIF Zone): SAIF Zone stands out as a key industrial zone due to its strategic location adjacent to Sharjah International Airport. This free zone is a preferred choice for companies looking to benefit from efficient air cargo services. SAIF Zone is home to a wide range of industries, including light manufacturing, electronics, and aviation-related services. The zone offers modern infrastructure, ready-to-use warehouses, and streamlined business setup processes, making it an attractive option for manufacturing firms. 

Warehousing Facilities

Warehousing is a critical component of the manufacturing supply chain, and the UAE offers a range of warehousing facilities designed to meet the specific needs of manufacturing companies. These facilities are equipped with modern infrastructure, including temperature-controlled environments, high-tech security systems, and efficient inventory management systems.

• Dubai Industrial City (DIC): Offers extensive warehousing options tailored for manufacturers, including specialized storage for perishable goods, chemicals, and other sensitive materials. 

• Ajman Free Zone: Known for its competitive pricing and strategic location, Ajman Free Zone provides flexible warehousing solutions for small and medium-sized enterprises. 

Logistics Hubs

The UAE’s logistics hubs are integral to the smooth functioning of manufacturing operations. They facilitate the seamless movement of goods within the country and beyond, ensuring that manufacturers can meet both local and international demand efficiently.

• Dubai Logistics City (DLC): Part of the larger Dubai South development, DLC is a key logistics hub that integrates air, sea, and land transport, making it ideal for manufacturers with global supply chains. 

• Hamriyah Free Zone: Located in Sharjah, Hamriyah Free Zone offers direct access to Sharjah’s deep-water seaports and the Sharjah International Airport, making it a vital logistics hub for manufacturers. 

Key Regions

Several regions within the UAE are recognized for their significant contribution to the industrial sector. These regions not only offer logistical advantages but also serve as centers for innovation and industrial growth.

• Dubai: With its advanced infrastructure, strategic location, and supportive regulatory environment, Dubai continues to be a leading region for manufacturing and industrial activities. Its industrial zones and logistics hubs are some of the most sought after in the Middle East. 

• Abu Dhabi: The capital of the UAE, Abu Dhabi, has made significant investments in industrial zones such as KIZAD and the Industrial City of Abu Dhabi (ICAD). These zones are pivotal in attracting global manufacturers, particularly in the aerospace, automotive, and heavy industries. 

• Ras Al Khaimah: Known for its cost-effective industrial solutions, Ras Al Khaimah offers a conducive environment for manufacturing companies, particularly SMEs, looking to establish a foothold in the UAE. 

These industrial zones, warehousing facilities, and logistics hubs, spread across key regions, collectively enhance the UAE’s position as a global manufacturing and logistics powerhouse. They provide manufacturers with the infrastructure, connectivity, and support necessary to thrive in a competitive global market. 

Availability of Utilities, Transport Links, and Labor Supply 

The success of manufacturing operations in the UAE is significantly influenced by the availability of essential utilities, robust transport links, and a skilled labor supply. These factors ensure that manufacturing companies can operate efficiently, minimize costs, and scale their businesses in a competitive global environment. 

Availability of Utilities

The UAE’s commitment to industrial growth is evident in its well-developed utility infrastructure, which ensures the uninterrupted supply of essential services such as electricity, water, and gas. Manufacturing companies benefit from:

• Reliable Electricity Supply: The UAE’s power grid is modern and reliable, providing manufacturers with consistent and high-quality electricity. Major industrial zones are equipped with dedicated power stations to meet the high energy demands of large-scale manufacturing operations. 

• Water Supply and Management: Industrial zones are equipped with advanced water supply systems, including desalination plants and waste-water treatment facilities. This ensures that manufacturing companies have access to the large quantities of water often required for industrial processes. 

• Gas Supply: For industries that require natural gas, such as petrochemicals and heavy manufacturing, the UAE offers a reliable supply of gas, with key industrial zones having direct access to gas pipelines. 

Robust Transport Links

Efficient transport links are crucial for the seamless movement of raw materials and finished goods. The UAE’s transport infrastructure is world-class, offering manufacturers access to:

• Air Transport: The UAE is home to several major international airports, including Dubai International Airport and Abu Dhabi International Airport, which offer extensive cargo handling facilities. Dubai World Central (DWC), also known as Al Maktoum International Airport, is designed to handle large-scale cargo operations, making it ideal for manufacturers with global supply chains. 

• Sea Transport: With some of the world’s busiest and most advanced ports, such as Jebel Ali Port and Khalifa Port, the UAE is a hub for maritime trade. These ports are equipped with state-of-the-art facilities that enable the efficient handling of large volumes of goods, ensuring quick turnaround times for manufacturers. 

• Land Transport: The UAE’s road network is extensive and well-maintained, facilitating the easy movement of goods within the country and to neighbouring GCC states. Additionally, the Etihad Rail project, which is set to link key industrial zones across the UAE, will further enhance land transport connectivity. 

Skilled Labor Supply

A key component of the UAE’s industrial strategy is ensuring the availability of a skilled and diverse labor force that can meet the needs of various manufacturing sectors. The country offers:

• Access to a Global Workforce: The UAE’s labor market is diverse, attracting skilled workers from around the world. This international workforce brings a range of expertise, particularly in specialized manufacturing sectors such as aerospace, pharmaceuticals, and technology. 

• Vocational Training and Education: The UAE government, in partnership with private institutions, has invested heavily in vocational training programs designed to equip workers with the skills needed for modern manufacturing. Initiatives like the Abu Dhabi Vocational Education and Training Institute (ADVETI) and partnerships with international universities ensure a steady supply of trained professionals. 

• Labor Laws and Regulations: The UAE’s labor laws are designed to protect workers’ rights while ensuring that businesses can operate efficiently. The Ministry of Human Resources and Emiratisation (MOHRE) oversees labor relations, ensuring compliance with employment regulations and facilitating the recruitment process for manufacturing companies. 

The combination of reliable utilities, world-class transport links, and a skilled labor supply makes the UAE an attractive destination for manufacturing companies. These factors not only support efficient operations but also provide a solid foundation for future growth and expansion in the global market. 

Establishing a manufacturing company in the UAE offers a gateway to one of the most dynamic and strategically positioned industrial hubs in the world. Dubai stands out as a leader in industrial competitiveness, driven by its robust infrastructure, advanced technologies, and strategic initiatives like the Dubai Industrial Strategy 2030. The city’s commitment to enhancing local production and fostering innovation has made it a preferred destination for global manufacturers. 

The manufacturing sector in the UAE is diverse, encompassing industries ranging from precious metals to pharmaceuticals, and the regulatory environment is designed to support businesses across these sectors. The choice between setting up in a free zone or the mainland is a critical decision that impacts market access, ownership structure, and operational flexibility. Free zones offer the advantage of 100% foreign ownership and simplified setup procedures, while mainland companies benefit from wider market access and fewer geographical constraints. 

A key factor in the success of manufacturing ventures in the UAE is the strategic selection of industrial zones, warehousing facilities, and logistics hubs. Industrial zones like Sharjah International Airport FreeZone and Dubai Industrial City are tailored to meet the specific needs of manufacturing companies, offering state-of-the-art facilities, streamlined logistics, and proximity to major transport links. These zones are equipped with advanced utilities, including reliable power and water supply, and are strategically located near ports, airports, and highways, ensuring seamless connectivity to local and international markets. 

Moreover, the availability of skilled labor and efficient transport links further enhances the operational efficiency of manufacturing companies in the UAE. The country’s emphasis on developing a robust labor market, coupled with its investment in world-class transport infrastructure, ensures that businesses have access to the resources they need to thrive. 

Navigating the incorporation process involves a series of well-defined steps, including the preparation of essential documents, selection of a business activity, determination of legal structure, and obtaining the necessary licenses and approvals. Compliance with regulations set by key authorities such as the Department of Economic Development (DED), Ministry of Industry and Advanced Technology (MoIAT), and Emirates Authority for Standardization and Metrology (ESMA) is crucial to ensure smooth operations. 

By adhering to these guidelines and leveraging the UAE’s strategic advantages, businesses can position themselves for success in the competitive global manufacturing landscape. Whether aiming to serve local markets or expand internationally, the UAE offers unparalleled opportunities for growth and innovation in the manufacturing sector, supported by a network of industrial zones, efficient logistics hubs, and access to essential utilities and skilled labor.