Business setup in UAE can be one of those dreams of you. Well, have you considered starting a manufacturing company? This is a promising business option in the UAE currently. The blog ‘How to start a manufacturing company in UAE’ helps you out with the role of manufacturing business in the UAE, the reasons why you select the UAE for manufacturing business setup and the steps to start one are discussed.
The Rise of Manufacturing Business in the UAE
The manufacturing sector in the UAE has been on a steep uphill graph and has been serving as the push into economic diversification. This industry contributed around 11% toward the GDP of the UAE in 2023, which indeed marked an upward trend. From UAE Vision 2021 to Dubai Industrial Strategy 2030, the nation is fast becoming a global hub within advanced manufacturing, particularly in the fields of aerospace, pharmaceuticals, and electronics. With the government heavily investing in innovation and sustainability, coupled with over 33,000 manufacturing companies operating across the UAE alone, this is an industry that is about to get even bigger.
If you consider setting up a manufacturing company in the UAE, this is the right time. Contact Damaar, the most renowned business setup consultants in Dubai, to receive guidance for an easy flow of processes.
Why the UAE is Ideal for Starting a Manufacturing Company?
Do you know that the UAE is the perfect location to start a manufacturing company? Yes, but why? The following are the reasons that make the UAE the ideal destination for businesses like manufacturing companies.
Strategic Location
The prime position of the UAE on the map places you bang in the center of many continents, offering you an ideal marketplace. Especially considering that, in particular, Dubai is only an 8-hour flight away from most parts of the globe, it’s super convenient for global trade.
World-class infrastructure
The UAE doesn’t mess around when it comes to infrastructure. For example, Jebel Ali is among the busiest ports in the world and is projected to handle more than 14.1 million TEUs in 2022. Whether by sea, land, or air, your products will move efficiently due to the advanced logistics network across the UAE. Besides, running your manufacturing business is quite easy here with everything pre-equipped in the modern industrial zones. It’s all about keeping things moving as well as keeping your operations at maximum efficiency.
Tax Benefits
When it comes to taxes, the UAE really knows how to make businesses happy. With 0% corporate and income tax for most industries, and very minimal VAT at 5%, you can keep more of your profits. This will provide you with more money in your pocket to reinvest and build your business.
Access to Skilled Labor
The UAE has skilled labor from every part of the world, so finding skilled workers is not a concern here. With the emphasis of the country on technology and innovation, there is much in the way of provision for training programs that will keep your workforce productive and ready for any challenge.
Government Incentives and Support
The government of UAE is highly supportive of the manufacturing industry. With initiatives like the ‘Make It in the Emirates,’ you get to enjoy perks such as access to low utility costs and better access to finance, among others. Economically, the federal government’s drive for diversification has translated into heavy spending in technology and innovation, thus providing a very conducive environment for businesses to thrive.
Steps to Start a Manufacturing Company in the UAE
When setting up a manufacturing company in the UAE, you must consider a few steps that are mandatory in this process.
Choose the Business Activity
When your mission starts, you have to decide well in advance what kind of product you are planning to manufacture. This will further guide you with most of your subsequent processes, including considerations regarding licensing and regulatory requirements. Ensure market demand for the same and that the selected area aligns with your expertise.
Local Sponsor
If you are setting up your manufacturing business on the UAE mainland, then you need a local sponsor. A UAE national can own 51% of shares in your company. Again, finding a reliable and experienced local sponsor will take care of the minute details of the local regulations and compliance with UAE laws.
Decide on a Trading Name
You would then have to decide on a trade name for the company. The trade name must reflect the type of manufacturing activity and should be in compliance with naming rules as per DED. After you have decided on your name, you have to prepare and submit the documents to the Department of Economic Development-Dubai (DED) for approval.
Memorandum of Association
After your trade name is approved, you must draw up and sign the Memorandum of Association. The Memorandum of Association is a legal document stating the structure of the company, shares, and other essential details about the company. You must sign the Memorandum of Association in front of a notary public in the presence of your local sponsor.
Choosing a Warehouse
It is very important to select the right type of warehouse. The warehouse you will choose will be the location for your manufacturing plant, so ensure that it suits your manufacturing requirements and also complies with the local requirements. Ensure you get a tenancy contract and Ejari certificate from the landlord of the warehouse to confirm your lease agreement.
Get Industrial Clearance
You can get your industrial clearance before starting the operation. You submit your documents to the Environment Department for clearance and apply to the civil defense for a No Objection Certificate, an assurance that your manufacturing activities are compliant with safety and environmental concerns.
Approvals from External Agencies
Approvals depend upon the nature of the product you are manufacturing. In case, your product is some kind of chemical production, you need to get clearance from Narcotics Department. For jewelry, you would have to get approval from the Police Department. Likewise, in the case of food product making, you will need clearance from the food control authorities.
Make the Payment
Once these permissions or sanctions are availed, you will be required to pay the prescribed fees. Here, the payment includes the industrial permit and other costs associated with the license. You will have to pay your dues on time so that you can avail your license most feasibly.
Get Your License
The final step is to apply for your industrial license. Present all the required documents to the Economic Department and get approval from the municipality of the relevant Emirate. A license that legally enables you to operate your manufacturing business in Dubai.
