Manufacturing Industry

In an increasingly globalized business climate, the universal expansion of manufacturing and trade has become imperious. The UAE is no exception to this rule and has already recognized the benefits of boosting its manufacturing sector. 

 

While the Emirate will remain dependent on the oil sector for many years to come, its level of dependency is gradually declining, and the share of oil in the GDP of the UAE will shrink progressively. 

Leading Emirates for Manufacturing Industry in UAE

Only storage and transport have seen a stronger growth rate than manufacturing in recent years, and expectations are that the sector will contribute 25 percent towards the UAE’s GDP by 2025.

Dubai

Apart from this, Dubai’s industrial growth is expected to reach US$ 16.1 billion and add 27,000 new specialized jobs by 2030. The government of Dubai has embarked on a concerted effort designed to promote, develop, and sustain a prolific manufacturing sector in Dubai. 

Under Dubai Industrial Strategy 2030, the government has identified 75 initiatives to renovate Dubai into an international hub for knowledge-based innovation and supportable industrial activities.

A dedicated free zone for the industrial and manufacturing sector is called the Dubai Industrial City

Why Are Manufacturing Companies in Dubai Best to Set Up?

Here are a few reasons to understand why Dubai is the go-to place for manufacturing business.

  1. Location and Connectivity – It has a strategic geographical location and is easily accessible through two international airports. It is the connecting hub between the markets of the East and the West, ideally located to bridge the crucial time zone gap between the markets to enable 24*7 connectivity.
  2. Talent Pool – Dubai is an incubator for exceptional home-grown talent and a magnet for the world’s most ambitious, forward-thinking, and sophisticated engineers, innovators, and technologists who desire a rewarding career-enhancing environment to thrive, prosper, and change the world.
  3. Foreign Direct Investment – Abundant and pro-investment policy decisions have gone a long way in setting Dubai on a path toward achieving inclusive and sustainable growth based on innovation and high productivity.
  4. Diverse Consumer Base - With its varied and mature consumer base, Dubai has a proven track record of being the launchpad to test and expand operations across the broader Middle East, Africa, and South Asia.
  5. Governmental Support - The Department of Economic Development has a pivotal role together with the Dubai Export Development Corporation and the Dubai Chamber of Commerce and Industry. 

Abu Dhabi

The Emirate has embarked on an aspiring growth and diversification program, Abu Dhabi Vision 2030, to boost nonoil sector growth. The manufacturing industry stands to benefit from the diversification away from oil. 

There is a wide range of prospects available to investors. The major manufacturing sectors of Abu Dhabi are-

  • Metals
  • Building materials and non-metallic mineral products
  • Petrochemicals and chemicals
  • Pharmaceuticals
  • Food, beverage, and consumer goods
  • Aerospace and defense equipment
  • Industrial equipment.

Apart from this, to support the development of the manufacturing sector, Abu Dhabi has successfully developed a range of industrial zones providing world-class infrastructure logistics facilities as well as convenient labor accommodations. 

Challenges and Risks for Manufacturing Companies in Abu Dhabi

Abu Dhabi is facing a few problems regarding the growth of the manufacturing sector in the Emirates. A few are mentioned below.

  1. Skilled Labor – Employment is frequently quoted as a critical problem for many manufacturers. The main issue is not getting qualified staff per se but getting qualified local staff. 
  2. Energy Prices – While the input costs, in general, might not be the main problem, selected costs for a few input items might not have challenged competitiveness. Increases in power prices can have severe ramifications for sectors, particularly those that are working with power as a critical input factor in the production process.

Future – What Lies Ahead for the Manufacturing Companies in UAE?

The manufacturing sector is on an upward trajectory when it comes to the UAE. To understand, here are a few examples of an initiative taken by the Government of Dubai, UAE, to grow this sector, besides the Dubai Industrial Strategy 2030.

UN’s 2030 Agenda

Sustainable Development Goals (SDGs), also known as Global Goals, are a set of 17 goals that aim to provide better living conditions for all. The SDG’s part of the Agenda includes Industry, Innovation, and Infrastructure. 

The main aim of this is to build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation.

Abu Dhabi Economic Vision 2030

Abu Dhabi's Economic Vision 2030 envisages the development of strategic sectors capable of attracting both local and foreign investment, notably in export-oriented industries, including manufacturing, telecommunications, transport, tourism, and energy. 

How to Get Included on the List of Manufacturing Companies in Dubai and UAE?

The steps to start a manufacturing business in the UAE are as follows-

Choose Your Business Activity

The first step is to choose an appropriate activity in terms of Manufacturing a product.

Appoint a Local Sponsor

After you select the right activity, you need to choose a reliable local sponsor in Dubai, UAE. This step is required in case a manufacturing company is started in the UAE mainland.

Decide on a Trading Name

Submit the necessary documents to the Department of Economic Development for getting name approval and initial approval, also called pre-approval. After getting the name and initial approval, an applicant needs to sign the Memorandum of Association with the notary public along with the local sponsor.

Select a Warehouse

You will need to opt for a proper warehouse to establish your manufacturing plant. At this step, you can get the tenancy contract and Ejari from the landlord of the warehouse.

Get the Industrial Clearance

After the process is completed and the approvals are obtained, you can submit the documents to the Environment Department for industrial clearance and get NOC from the civil defense.

Get the External Approvals

Get external approvals from the department. These are for selected manufacturing units, such as approval from food control if the manufacturing of food products, narcotics department for chemical production, or even from the Police if you plan to manufacture jewelry.

Make the Payment

Make a payment, and your industrial permit will be issued. After getting all approvals, you can submit all the papers to the Economic Department to get the industrial license.

Obtain Your License

The next step is to get an Industrial License. For this, you need to get approval from the Municipality of the particular Emirate.

Owing to the nonexistence of taxation in Dubai and other benefits mentioned above, an own factory makes sense to consider not just as an independent enterprise but also as the cost optimizer for the final product in the manufacturing chain and structuring of manufacturing processes between countries.

So, should you decide to incorporate your manufacturing business in Dubai, do contact us, and we’ll be glad to assist you in your dream business setup.