INDUSTRIAL LICENSE
Dubai's extensive and advanced logistics and infrastructure play a pivotal role in fostering industrial expansion. With its strategic positioning as a trade nexus between the eastern and western regions, Dubai enjoys a distinct geographical advantage. For those engaged in industrial manufacturing and aiming to establish an industrial enterprise in Dubai or the UAE, securing an Industrial License is a fundamental requirement. Acquiring an industrial license in Dubai streamlines the operations of manufacturing and industrial ventures, enabling the creation of both partially processed and fully finished goods.
Activities falling under the purview of an industrial license in Dubai encompass essential processes such as production, categorization, assembly, packaging, and more. Notably, obtaining an industrial trade license in the UAE mandates the possession of a physical warehouse within the country. This license is typically issued by the Dubai Department of Economic Development (DED). As a business owner, it is incumbent upon you to seek authorization from the Dubai Municipality and other pertinent authorities to facilitate the issuance of this license.
The sophisticated and well-organized seaports and airports in Dubai effectively cater to the growing needs of the industrial sector. The industrial sector utilizes this logistics advantage in the best possible manner. The transport of raw materials, equipment spare-parts, machinery and exchange of goods and all other associated activities can be performed smoothly and in a cost-effective manner. In the last decade, the industrial sector of UAE witnessed a growth of 31% and it is predicted to achieve a marginal increase by 2027. Dubai witnessed a 6% growth in the industrial sector in the last decade and is a major contributor towards the GDP. Electricity, water and gas, quarrying, mining and manufacturing are the major industrial sectors of Dubai.
Production or manufacture of goods or commodities in an industrial environment or space requires a valid Industrial License. Production can be termed as the transformation of raw materials or natural resources from the crude state to the final or refined state. Here the raw materials are subjected to structural or appearance-oriented transformation and the end product could either be in the semi-manufactured or fully-manufactured state. The transformation must be carried out via manual or mechanical intervention. Production, accumulation, Industrial segregation, and final packaging of products – all come under Industrial activity and therefore necessitate a valid Industrial License. The license issuance is carried out by the Department of Economic Development or DED. The approvals and permissions from other external agencies and ministries may be required for license issuance when it comes to Industrial License in Dubai, UAE. The license is issued with validity in compliance with the terms and condition specified at the time of issuance. The investors who are planning to set up an industry in Dubai should possess a physical warehouse. And yes – it is a mandatory requirements
The entire manufacturing-related activities systematically performed in an area of land come under Industrial production. Some of the major activities that come under industrial production are listed below:
Manufacturing of textile
Paper Production
Petroleum products manufacturing
Metal casting
Food production
Manufacture of equipment and appliances
There are certain prerequisites that an investor needs to accomplish before applying for an Industrial License in Dubai. And they are listed below.
51% sponsor share – You should find a local sponsor for your company. The local sponsor holds 51% of the company share and the remaining 49% goes to the foreign investor.
Local license – A local industrial license is mandatory for industrial concerns. And the local license is issued from the area of operation.
Office and warehouse – A physical office space and a warehouse in Dubai is mandatory to obtain Industrial License. Having a virtual office in Dubai will not serve the purpose here.
Employees – A minimum of 10 employees or workers is mandatory.
Capital Investment – Minimum Dhs 250,000 must be set aside as the capital of your company. 5HP specification machines are mandatory.
Certain Ministries and external agencies are involved in the License issuance. Here are the documents needed to attain an Industrial License in Dubai. A detailed report – You should submit a detailed report of the factory or industry that comprises the plan, objectives behind factory setup, information about the equipment involved in the production, manufacturing cost, capital involved and source of finance. You may furnish the employee details too. Non-citizens are supposed to submit the residence and passport copy. Feasibility study
Partnership contract in case of partnership firms
National Media Council Approval
Approval from the Ministry of Health
Copy of the Balance Sheet
Approval from the Ministry of Environment and Water
The process involved in the issuance of Industrial License in Dubai is listed below.
Obtaining the Initial Approval from the concerned authorities is the very first procedure prior to setting up of industrial concern or factory in Dubai. Initial Approval is also applicable when it comes to altering the present factory specifications or settings.
After you get the Initial approval, you may get in touch with the DED and apply for the Industrial License.
The processing time of the license application is 3 months. DED makes the final decision within the prescribed time.
The applicant shall receive the Application Approval notification from DED after the decision has been made. And this may take another 15 days.
When it comes to factory construction, you need to get prior permission from the Municipality.
You need to get other approvals from agencies and Ministries like the Ministry of Health, Chamber of Commerce and Industry etc.
If all the aforementioned requirements and documents are through, the final approval shall be issued within two weeks.
Getting an Industrial License in Dubai can be a time-consuming and tiring task because of the overload of formalities. Frank & Frank Business Setup Services have assisted several establishments for acquiring Industrial License in Dubai. Please contact our business consultants, even if it is a general query regarding Industrial License. We’re pleased to help you.
The authorities in the UAE have extended some privileges to the firms with an industrial license. Envisaged to promote industries and attract more investments in the sector.
The privileges of having industrial license in Dubai are:
Terms for renting industrial space exclusively formulated to benefit the investor
The government will provide land at a subsidised rate or free of cost for establishing your industry
Discounted rates for electricity, water and other essential requirements
Guidance based on modus operandi of similar industries, to enhance your industry
Innovative products can get a loan at reduced rates
If your product is expected to strengthen the national economy, the government will support you financially during the course of R&D
The products with exceptional quality will be given priority by the UAE government during official procurement
The cost of obtaining an industrial license in Dubai, UAE and setting up industry will depend on whether your business is in the Mainland or Free Zone and other relevant factors. You may need additional approvals and registrations according to the type of industry you are establishing. The total cost may be approximately AED 25K. However, this may vary from time to time, with amendments in existing pricing rules.
Considering the initial set up charges and other costs, starting an industry in the Free Zone jurisdiction would be more budget-friendly.
The federal authorities have specified certain obligations for the industrial license holder in Dubai. You must abide by the same for the smooth functioning of your industry and for avoiding unwanted repercussions.
Once your project is approved, you must commence construction of the industrial space within six months of receipt of the approval
Submit all the requisite data to the Department of Economic Development (DED), Dubai, as directed
A letter to be submitted to the DED as and when you are ready to start the industrial activity. The DED will issue a certificate of authorization subsequently
Your industry must be included in the register of industries. Submit a letter to the concerned authority for the same.
In case of any alterations or amendments in the data pertaining to the factory, submit a letter, in the prescribed format, to the DED detailing the changes
You are unauthorized sell or lease the property that has been allocated by the government for establishing the industry
The data of employees enrolled in the company has to be prepared and a copy of the same must be submitted to the DED
All the products and materials imported after claiming exemption from customs duties shouldn’t be used unless specified during the import
Federal laws stipulate a minimum of 25% employment for local Emiratis
Strictly follow the rules, regulations and policies of the land
All the directives to maintain hygiene, health conditions and industrial safety must be pursued without fail
Any changes, including the appointment of a director, must be informed to the DED in writing. In that case, the shareholders along with the director will be responsible for all the activities, law enforcement, and maintaining stringent regulations for the industrial safety of the company
Reports have to be submitted to the authorities on a regular basis.
