Manufacturing is a very basic but important function in any economy. Without manufacturing, the other sectors cannot function as the necessarily finished goods will not be ready to use. In the recent past, there has been a significant increase in the manufacturing sector of all the countries, especially the United Arab Emirates and this has paved the way for other sectors to shine.
Setting up a business in the United Arab Emirates is a very lucrative and profitable option for entrepreneurs and businessmen all over the world. The size of the business does not matter, UAE can be suitable for each and every business. This has been possible as the government of UAE has been tirelessly working to establish the region as one of the booming manufacturing destinations of the world and attract as many businesses from all over the world as possible.
This guide will help you understand the different options that the manufacturing industry in UAE can provide to Entrepreneurs and Businessmen. However, before moving ahead with the possibilities, let’s have a look at the highlights of the UAE Industrial Sector.
Why should you Invest in Dubai Manufacturing Business?
The manufacturing sector in the UAE is on the rise as there are many changes in the markets that are suitable for this emerging sector. A few highlights of the manufacturing industry are:
- Expected growth of the UAE’s Industrial Sector-34%
- Abu Dhabi’s industrial sector to grow by-56%
- Dubai’s industrial sector to grow by-51%
- Expected jobs to be created-27,000
- Dubai’s Industrial Strategy to be implemented by 2030
Thus we can see that there are huge growth prospects for this sector and this is the reason many entrepreneurs and businessmen are eyeing to set up a business in the United Arab Emirates.
Let’s have a look at the top industries that you can focus on while starting a manufacturing business in Dubai.
Top Manufacturing Business to Invest in Dubai
UAE has turned out to be the land with various business opportunities. Some of the top manufacturing industries where the investors can focus and set up a business are as follows:
Food and Beverage Industry
One of the most profitable industries in the world is the Food and Beverage Industry. The UAE has been a thriving destination for the F&B industry and has provided multiple opportunities for new entrepreneurs and businessmen to enter the market. The year 2020 is going to be a remarkable one for the F&B industry as the region is expected to fetch more than 25 million visitors.
There had been a little decline in the Brick and Mortar shops in the recent past due to the Covid-19 pandemic but we have seen a significant rise, namely 255%, in the Online F&B sales in the year 2020. UAE also provides great opportunities to businesses as it will have an option to expand into the other neighbouring GCC countries such as Bahrain, Saudi Arabia, Oman, Kuwait, etc. Before entering into the Food and Beverage sector in UAE, a business needs to do its due diligence and then proceed.
The next big industry is the manufacturing segment of UAE where there are a lot of growth opportunities in the ceramic industry. There is the use of Ceramics in both residential as well as commercial properties and as a result, the demand for the ceramic industry is steadily increasing. It is anticipated that there will be an increase of almost 70% in this industry due to the ongoing Expo 2020 which was postponed due to the coronavirus pandemic. Ras-Al-Khaimah is one of the leading grounds when it comes to ceramic tiles which hold a global sales value of $1 Billion (3.67 Billion AED). The region also provides the flexibility to set up a manufacturing plant for the Ceramic industry.
In recent years we have seen a huge increase in the pharmaceutical industry. One of the major reasons was the pandemic. The pharma sector had to evolve and grow a lot in a limited time span. It is predicted that the Pharma Sector will have a CAGR of 8.5% in 2022.
When it comes to the pharmaceutical manufacturing business, there exists a significant scope in adhesive dressing, wadding and gauzes, gel preparations for surgery, first-aid box, vaccines, medicines, dental fittings etc. This will also include Veterinarians (animal doctors). You can know more about the pharmacy business in the UAE by reading our blog.
The demand for Generic medicine has been continuously rising, and the projection is stated below:
Demand (in Billion AED)
From the table, we can see that there has been a constant increase in the demand in the pharma sector, be it of doctors, medicines, vets or any other. This makes the pharmaceutical sector a very lucrative option for entrepreneurs and businessmen from all over the world.
The United Arab Emirates is one of the lucrative GCC destinations when it comes to the textile business. The textile business in the UAE is enclosed with multiple segments like Woven, Knitted Garments, Cloth Manufacturing etc. The industry holds second place after the oil industry in the region of the UAE. The textile market holds an active market when it comes to export business covering more than 52 countries combining the Asia, Middle-East, European and African markets. To know more about the textile sector in UAE you can read our blog.
Aluminium- When it comes to the metal industry in the UAE, the manufacturing of Aluminum and Steel are the most prominent that drives the sector. Aluminium is one of the most used metals, especially for household purposes. The Al Taweelah Alumina refinery is one of the first refineries in the region of the UAE, which has been constructed by investing approximately AED 3.3 Billion.
Steel- In the year 2020, the steel production in the UAE has been 2.7 million metric tonnes. This is greater than the world average steel production by .82 billion metric tonnes. This shows that there is a huge scope of growth in the steel industry in the UAE. The steel industry in the UAE has got a significant demand, which is projected to grow by 30% by the year 2021. The growth is expected to be tremendous as it would be backed by Dubai Expo 2020. The market value of prefabricated building and structural steel is expected to grow by USD 4 Billion by 2022.
Gold- Known as the land of Gold, the UAE is the ultimate destination when it comes to gold manufacturing. Dubai has around 29% market share in the global gold trade. Apart from the manufacturing segment, multiple options are available for you if you are dealing with gold. You can know more about the gold business in the UAE by clicking the link given.
Copper- Beyond aluminium, steel and gold, copper is the metal that is focused on producing multiple products like ornaments, copper cables etc.
Thus, it can be seen that proceeding ahead with the metal manufacturing business in the UAE can be a very viable option for entrepreneurs and businessmen alike.
The aviation sector is the next focused segment that can be a lucrative option for businessmen. The UAE has been continuously taking steps to expand the aviation sector. The prime goal is to become the global hub when it comes to the manufacturing of Aero Engine components. The aerospace sector has been one of the six Dubai Industrial Focused sectors, holding a current contribution of 2.3%. The initiatives include:
- Emirates Offset Program
- Strategic Tenant Ownership
- Land Lease Subsidization
- Dubai Industrial Aerospace Cluster
- Equity Participation in Aerospace MNC
- 3D Printing Proliferation Strategy
- Global MRO Championing
- JV Facilitation
- Aerospace University Programs
- Aerospace Scholarship Programs
- Financing Aerospace SME Expansion
- Aerospace Training Institutions
- Aerospace Internship Programs
- Facilitating Aerospace Exports
- Dubai Aerospace Industrial Exhibition
- Dubai Aerospace Association
There is also an increasing demand for aerospace engineers both in the UAE as well as outside the country due to the global expansion of the aviation sector.
The construction business is one of the significant contributors when it comes to the ground of the UAE. When it comes to the manufacturing of building materials, cement, ceramics, pipes, rebar, roof blocks and glass are the top priorities. The UAE is a significant producer of Glass, and Ras-Al-Khaimah is one of the preferred grounds as the units set up there holds the capacity to produce 700 tons of glass per day.
The future of the UAE holds enormous potential when it comes to the real estate business. As a result, the demand for construction equipment would have a huge market. If you are dealing with the construction equipment business or is planning to expand the same, then Dubai is the ultimate ground for you.
The United Arab Emirates is the second-largest plastic producer in the GCC region after Saudi Arabia. According to the report submitted by Business Monitor International, the UAE has got over 260 plastic manufacturing plants. By the end of 2022, the GCC plastic industry is expected to hold a value of 34.5 million tons. Thus, we can see that the region of UAE has got ground for a plastics manufacturing business.
Benefits of Starting a Business in the UAE
We have seen the growth prospects of the various industries in the UAE. Now let’s look at the benefits of Starting a business in the country. There are multiple benefits of incorporating a business in the ground of the UAE. Some of them are mentioned below:
Tax is another major component that every business investor is worried about. Taxes have the potential to make or break a business. The Government of the UAE has exempted the personal tax, which helps them to become burden-free. Although, recently, the government has implemented the VAT concept, fixed at 5%, which gets implied to the business entities. Know more about VAT in the UAE by clicking on the link.
Easy Availability of Business License
In UAE it is required by every business entity needs to hold a specific business license in order to carry out the business activities. While dealing with the manufacturing business, it is important to obtain an industrial license. This license will act as a legal permit that will allow the business professionals to carry out the business activities legally. There are different licenses for different business activities and it is the duty of the management to understand which license is required by the business.
Availability of Different Locations
To ease the business incorporation the management can choose different locations like Mainland, Free Zone and Offshore to set up their business. Each of these locations stands unique and holds numerous advantages. It is recommended to understand the pros and cons of each one before finalizing the location for one’s business.
Complete Repatriation of Capital Invested and Profits Earned
One of the major concerns that pop into the mind of business investors is regarding the liquidation or repatriation of the investment made. To make the process simple, the Government of the UAE allows complete flexibility to repatriate the capital invested by the investor along with the profits made during the business cycle.
The ongoing Dubai Expo 2021 is expected to be a game-changer that would have a drastic impact on the business industries. Over a period of six months, the event is projected to fetch in more than 25 million visitors, which would end up giving birth to multiple business collaborations. The Dubai expo had to be inaugurated in the year 2020 but due to the Coronavirus Pandemic, the Expo had to be post-pones. Our other blog will also let you know more about the opportunities that the Expo holds for its visitors and business investors.
To start a manufacturing business on the ground of Dubai, an industrial license needs to be obtained, which is possible only by availing the permission from the Government Authorities. The license can only grab if the documentation process gets cleared in an error-free way. Now, to proceed ahead alone turns out to be a complicated and tedious process. The feasible way is to proceed ahead with the consultation of a business expert, who is well-versed with the business incorporation process in Dubai.
Benefits of Hiring Consultants in UAE
Taking the assistance of Professionals can do wonders for your business. Some of the benefits that you will be availed by taking the help of professional experts are:
- Outsourcing the incorporation will lead to less burden
- Effective utilization of available time and resources
- Tasks are handled professionally and error-free
- Tasks will be completed on-time
- Professional experts stand as a guide
How Can Commitbiz Help?
With the intent of providing the best and simplified incorporation process, Commitbiz has served numerous clients across the UAE, helping them to initiate their business roots. Since inception, we have been guiding multiple business owners to transform their business ideas into reality. Our experts hold industry experience and are well-versed with the legal rules and proceedings regarding business incorporation.
The Experts take the initiative to understand the business requirements and provide practical and tailored business setup solutions. To proceed ahead with your manufacturing business, do have a word with our advisors. Contact us today-we’d be glad to assist.
Why is the UAE the ideal place to start a manufacturing company?
The UAE is ideal for starting a manufacturing company because of its outstanding connectivity, foreign direct investment, and broad consumer base.
How many textile manufacturing industries are there in UAE?
There were around 170 textile manufacturing industries were there in UAE.
What is the predicted growth rate of the UAE pharmaceutical industry?
The pharmaceutical industry in the UAE is predicted to expand by 27% between 2021 and 2025.
What are the top manufacturing companies in UAE?
The top manufacturing companies in UAE are,
- General Electric
- Alghanim Industries
- Ecolab (ECL)
- Saudi Chevron Phillips Company
- Al Ghurair Group
- Eaton Corporation - Cooper Industries
What is the predicted growth rate of the UAE ceramic industry?
The GCC ceramic tiles market in the UAE is predicted to grow at a 7.6 per cent CAGR from 2020 to 2028.