The Process and Advantages of Obtaining an Industrial License in Dubai (UAE)

The United Arab Emirates is rapidly expanding in business and manufacturing. However, it is essential to acquire a business license in order to start a new business here. The three main business license types in UAE are – Commercial License, Industrial License and Professional License. Here in this blog, we will be covering how to obtain an Industrial License in Dubai?

Who is Eligible for the Industrial License?

Dubai’s industrial license is given to investors and businesses that use raw materials or natural resources to manufacture finished goods. It can be done manually or mechanically, and raw materials or semi-manufactured materials are used for the process. Production, segregation, accumulation, and packaging are other industrial license activities most common for an industrial license.

The Dubai Department of Economic Development (DED) is authorised to issue industrial licenses generally. However, investors will need to obtain approval from the Dubai Municipality and other ministries and authorities to function legally.

Business Sectors Where Industrial License is a Must

Investors in the manufacturing industry must obtain an Industrial License to operate smoothly. The sectors that fall under this category are:-

• Bread manufacturing and food industries
• Equipment and engine manufacturing
• Manufacture of petroleum products
• Paper manufacturing
• Textile manufacturing
• The casting of metals industries

Requirements to Apply for an Industrial License

The below mentioned factors are essential to be satisfied before applying for an Industrial License:

• Local Sponsor – You must have a local service agent or sponsor (UAE national) who will own 51% of the total share. The remaining 49% of the company will stay with foreign investors or holders of an industrial license.
• Office Space – A physical office and a warehouse in Dubai are necessary to obtain an industrial license in Dubai. Virtual offices are not acceptable.
• Local License – A local industrial license in the jurisdiction you want to do business.
• Capital – The capital of your company must be at least Dh 250,000

Approvals Necessary after Acquiring the Industrial License

Approval and permits from the below listed departments are necessary to obtain an Industrial Licence:

• The Economy and Commerce Ministry
• The Dubai Municipality Planning Department (DM)
• Special approval from Dubai Civil Defence in some cases
• The Dubai Electricity and Water Authority (DEWA) for electricity, water and other utilities
• The Dubai Health Ministry (if setting up a pharmaceutical manufacturing company)
• Permits from the Ministry of Climate Change and Environmental
• The UAE Ministry of Interior

Necessary Documents Needed The Industrial License

Below listed are necessary documents that you must keep handy before you apply for the license:

• A report covering the factory’s plans, the reason and purpose of opening the factory, production tools data, production cost and capital, and information on financial support or funding for the factory.
• Employee information and any other relevant information can also be included in the report.
• Copy of passport and residence for non-citizens,
• Summary of the registration of the citizen
• Project feasibility study
• Partnership Contract (if a partnership firm)
• Copy of the trade license
• Copy of Balance Sheet
• National Media Council Approval
• Ministry of Health Approval
• Ministry of Environment and Water Approval
• Ministry of Interior Approval

The Process to Apply for an Industrial License

Here is the simple process to apply for Industrial License in Dubai:-

• You must get initial approval from the Dubai authorities before opening a factory or making any changes to the existing factory.
• Once you get approval from them, you can apply for the industrial license to the Department of Economic Development. The DED will consider your application and decide within three months of receiving it.
• If your application is approved, the DED will notify you within 15 days of the decision.
• Other than this, you must also get consent from Municipality to construct the factory.
• Other authorities who must approve your license includes the Chamber of Commerce and Industry, industrial register, Ministry of Health etc.
• You must submit the documents mentioned above as required by the concerned authorities.
• The approval or disapproval is done within a week or two.

Cost to Obtain the Industrial License

Cost depends on location, legal structure, jurisdiction, activities added to the license and many more. Therefore, it is better to contact a business setup consultant in Dubai to get a better idea about the cost of an industrial license in Dubai. A business setup or company formation consultant can be of great help even in obtaining your industrial license. They can take all your worries away and make the process easier and smoother for you.

Advantages of Holding Industrial License

The companies that have obtained an industrial license in the United Arab Emirates are granted some rights by the authorities with an aim to encourage industries to invest in the country.

The following are some of the benefits of holding an industrial license in Dubai:-

• Terms for renting industrial space that is mainly designed to support investors.
• The government will provide land at a reduced rate to establish a manufacturing unit.
• Electricity, water, and other essentials are available at reduced rates.
• Guidance to improve business.
• Innovative products can get easy loans with lower interest rates.
• The government also provides funds and financial support for the R&D phase if your product is expected to support the national economy.
• The UAE government gives goods of exceptional quality priority during official procurement.

Industrial License Holder Obligations

Here are some obligations that companies have to meet to apply for an industrial license in Dubai:

• The federal government has announced some duties for the holder of an industrial license in Dubai. You must adhere to the same for the smooth functioning of your business. If you have received approval for your project, you will have to start building the factory or manufacturing/production unit within six months of approval.
• Submit all necessary documents to Dubai’s Department of Economic Development (DED).
• When you are ready to start your operation, you will have to send a letter to the DED requesting authorisation. After that, the DED will provide an authorisation certificate.
• The Registry of Industries must include your business. Send a letter to the concerned authority for this.
• If you make improvements/amendments in the factory records, send a letter to the DED in a defined format describing them.
• Sell or lease out of the property that the government has allocated for the industry development purpose is prohibited.
• Prepare a proper database of enrolled workers in the industry and send a copy to the DED.
• Do not use goods and materials imported after requesting customer duty exemption unless stated during the import process.
• Adhere to the land’s laws, legislation, and policies as per the letter.
• All instructions on maintaining hygiene, fitness, and industrial safety must be followed as per the letter.
• Arrangements for the appointment of a director must be informed to DED in writing.
• In any situation, the owners, along with the director, are responsible for the company’s operations, law enforcement and the upkeep of strict industrial safety regulations.
• Submit reports to the authorities regularly.