The UAE’s manufacturing sector is now the third-largest contributor to national GDP (after oil & gas and trade). By the end of 2024, manufacturing totalled around AED 205 billion, equating to 11% of the GDP. It is poised for even stronger growth in the coming years as UAE authorities encourage advanced manufacturing technologies, including robotics and 3D printing. These efforts are balanced by strict environmental standards, supporting the nation’s Net Zero 2050 targets. The government’s focus on advanced technology, sustainability, and pro-industrial policies has made 2025 an opportune time to start a manufacturing business in the UAE.
This updated guide explains how to obtain a manufacturing (industrial) licence in the UAE, covering the four different licence types, costs, procedures, compliance requirements, and the latest government incentives.
Why Set Up a Manufacturing Company in the UAE?
Prime Global Connectivity
With a geographic crossroads linking Asia, Europe, and Africa, Dubai provides unmatched reach to major international markets. The city’s world-class ports and airports handle massive cargo volume daily, enabling swift import of raw materials and export of finished goods.
Pro-Business Government Support
The UAE’s pro-business stance fosters low registration costs, favourable regulations, and tax exemptions. Dubai’s strategic policies—like startup incubators and easy licensing—create a welcoming ecosystem for international investors, especially in the manufacturing sector.
Additional benefits include preferential rental agreements for industrial spaces, reduced rates on government-allocated land, and subsidies on utility costs like electricity and water. The government also offers sector-specific guidance, financial support for R&D, and reduced interest rates for financing innovative products.
Competitive Industrial Landscape
Dubai has long been the regional frontrunner for manufacturing, with a high GDP contribution and ambitious “Industrial Strategy 2030” goals. Products branded as “Made in UAE” carry strong global recognition for quality, giving local manufacturers a competitive edge.
Robust Infrastructure & Skilled Workforce
Advanced transportation and logistics networks reduce lead times and ensure efficient cross-border trade. Meanwhile, Dubai’s diverse talent pool of engineers, technicians, and labourers helps businesses quickly assemble and manage their operations without depending heavily on overseas recruitment.
Forward-Looking Industrial Framework
The UAE’s commitment to modernising its industrial sector is embodied in Federal Decree-Law No. 25 of 2022, introduced under the Ministry of Industry and Advanced Technology’s (MOIAT) Operation 300bn (the UAE’s industrial strategy). This decree-law unifies and streamlines industrial licensing, incentivises advanced manufacturing, and centralises oversight via MOIAT.
Companies adhering to enhanced environmental and safety standards enjoy federal recognition and benefits such as customs exemptions, preferential utility tariffs, and Emirates Development Bank financing. The legislation also standardises annual renewals and compliance audits, helping to maintain a future-focused, sustainable industrial ecosystem.
Ease of Setup
Entrepreneurs follow a straightforward process—select a product, register a trading name, submit documents to the Department of Economy and Tourism (DET), draft a Memorandum of Association, and obtain the necessary clearances. By meeting the decree-law’s standards, businesses can fast-track licensure and expansions, tapping into the UAE’s robust industrial incentives.
All these factors—top-tier infrastructure, skilled workforce, favourable legislation, and strategic connectivity—combine to make the UAE (and Dubai in particular) a leading hub for forward-thinking manufacturers.
[virtuzone_banner id=cost-calculator]
Types of Manufacturing Licences in the UAE
When selecting a manufacturing licence in the UAE, several key considerations include where you apply, the features of each licence type, and which type best fits your business objectives.
Be aware that some major industrial zones (such as Dubai Industrial City or KIZAD in Abu Dhabi) feature both mainland and free zone segments. If you choose a mainland industrial licence for your factory in these zones, you will need to obtain approval from the Department of Economy (DET) and the Ministry of Industry and Advanced Technology (MOIAT), then follow any extra zone requirements for environment, civil defence, or facilities.
See below the four licence options:
Industrial (Large-Scale) Manufacturing Licence
The industrial licence is tailored for large-scale operations that significantly impact resources or the environment, such as petrochemicals, steel production, or pharmaceuticals. Applications for this licence are primarily processed through:
- Department of Economic Development (DET) in your chosen emirate (e.g., Dubai Economy or Abu Dhabi Department of Economic Development).
- Ministry of Industry and Advanced Technology (MOIAT) for federal registration and an Industrial Production Certificate.
- Additional zone-specific approvals in specialised industrial zones like Dubai Industrial City or KIZAD in Abu Dhabi.
Key Features
- Rigorous Environmental Impact Assessments (EIAs) and compliance with Health, Safety & Environment (HSE) standards.
- Substantial capital investment, typically at least AED 250,000 as mandated by MOIAT.
- Multiple clearances from Civil Defence, municipal authorities, and possibly the Ministry of Interior for hazardous materials.
Typical Fees
Dubai: ~AED 20,000–40,000 in government fees.
Abu Dhabi: ~AED 15,000–30,000, occasionally lower under new incentives.
Northern Emirates (Sharjah, Ajman, RAK, UAQ, Fujairah): ~AED 5,000–15,000.
Additional Costs
Dedicated Warehouse or Plot: For large-scale operations, lease costs may be significant (tens of thousands AED annually), depending on size and location.
Machinery & Utility Deposits: Varies greatly with the scale of production.
If you operate within a specialised mainland industrial area (e.g. Dubai Industrial City or KIZAD’s mainland segment), expect possible zone-specific fees on top of the DET licence.
This licence suits:
- Heavy industries or large-scale projects.
- Businesses with significant energy or water usage.
- Companies targeting government contracts or major public projects.
SME Manufacturing Licence
The SME manufacturing licence caters specifically to small-to-medium scale producers involved in activities like light assembly, food processing, and consumer goods manufacturing. Applications are handled by:
- The Department of Economy and Tourism (DET) in your emirate.
- MOIAT for accessing specific national incentives, though requirements are less rigorous compared to large-scale operations.
Many emirates—particularly Ajman, Umm Al Quwain, and Ras Al Khaimah—maintain SME-friendly industrial parks with attractive lease terms and dedicated support services, making it easier for smaller factories to launch.
Key Features
- Lower capital thresholds and faster approval timelines.
- Simplified environmental and health & safety approvals.
- Access to specialised government initiatives, funding opportunities, and reduced utility tariffs.
Typical Mainland Fees
Often on the lower end of mainland licensing costs, particularly in Ajman, Umm Al Quwain, or Ras Al Khaimah, where fees might start at AED 5,000–10,000.
Dubai or Abu Dhabi SME licences can be higher (~AED 10,000–20,000) but sometimes offset by emirate-level incentives.
Key SME Considerations
Smaller facility rental (could be ~AED 15k–30k for basic warehouse space in more affordable industrial zones).
Less intensive environmental approvals (if product risk is low).
Possible government-sponsored SME funding or reduced fees under local initiatives.
Some SME-friendly industrial parks offer all-inclusive packages that bundle licence fees, rent, and basic approvals at competitive rates. However, for those that don’t, keep in mind you still need to factor in security deposits, and any utility connections.
This licence suits:
- Start-ups and emerging manufacturers.
- Companies with limited production scales.
- Investors seeking cost-effective entry into manufacturing.
Free Zone Manufacturing Licence
Free zone manufacturing licences are issued by UAE free zone authorities such as Jebel Ali Free Zone (JAFZA), Dubai Multi Commodities Centre (DMCC), Sharjah Airport International Free Zone (SAIF), Ajman Free Zone, or RAK Economic Zone (RAKEZ). Key application considerations:
- Each free zone authority has specific regulations and incentives.
- MOIAT registration is required for federal-level incentives or customs duty exemptions.
Key Features
- 100% foreign ownership, with no local sponsor required.
- Zero corporate taxes (for businesses not trading directly on the mainland).
- Streamlined import/export procedures.
- Integrated ecosystems tailored to industry-specific needs.
Estimated Annual Fees
Ajman Free Zone: ~AED 13,500 for an industrial licence package.
Sharjah SAIF Zone: ~AED 14,000 for basic manufacturing licence.
DMCC (Dubai): ~AED 18,000, plus mandatory office or warehouse lease.
JAFZA (Dubai): ~AED 5,500–9,000 for the licence, but warehouse rent in Jebel Ali can be significantly higher.
Bundled Packages
Many free zones combine registration, visa quotas, and facility rent (e.g. small warehouse or office) into a single annual payment (~AED 20k–40k).
Notes
100% foreign ownership and simplified customs typically justify higher base fees compared to some mainland SME licences.
Free zones with advanced infrastructure (e.g., DMCC for precious metals, Dubai Industrial City free zone cluster, etc.) may have additional fees for specialist services or storage.
This licence suits:
- Export-oriented businesses.
- Foreign investors seeking ownership autonomy and operational simplicity.
- Businesses requiring quick market entry.
Specialised Industrial Licence
Specialised industrial licences are necessary for regulated sectors, such as pharmaceuticals, medical devices, sensitive food products, or chemicals. Applications must go through:
- The Department of Economy and Tourism (DET) in your emirate.
- Free zone authorities, if applicable, with separate NOCs from federal bodies.
- Additional clearances from specialised bodies such as the Ministry of Health and Prevention (MoHAP), Emirates Authority for Standardization and Metrology (ESMA), or local environmental departments.
Key Features
- High-level compliance standards (GMP for pharmaceuticals, HACCP for food).
- Extended licensing timelines due to detailed compliance checks and approvals.
- Emphasis on advanced R&D and international certification standards.
Costs & Additional Approvals
The cost of the Specialised Industrial Licence will depend on whether you choose to set up in a Free Zone or on the mainland. A mainland “Specialised” setup in Dubai or Abu Dhabi might range from AED 20k–40k for the basic licence, plus separate environment or health licensing fees (often an additional few thousand dirhams). Contrastly, a free zone “Specialised” licence often starts around AED 15k–25k, though chemical or pharmaceutical activities require more extensive site inspections, permitting, and advanced facility infrastructure.
Notes
The licensing timeline for a specialised licence is often longer due to thorough compliance checks.
If you need international certifications (ISO, GMP, etc.), factor in third-party auditing or consultancy costs on top of the licence fees.
This licence suits:
- Manufacturers of pharmaceuticals and medical technologies.
- Food and beverage producers handling sensitive categories.
- Companies handling hazardous materials or requiring international compliance certifications.
Need Help Choosing the Right Licence?
When looking at the four different licensing options, consider the following 6 factors:
1. The Scale and Nature of Your Operations
- Large-Scale vs. SME: If you expect a major environmental impact, massive power needs, or large capital investment, the Industrial (Large-Scale) Manufacturing Licence is appropriate. Smaller-scale businesses often benefit from SME Manufacturing Licences.
2. Your Market Focus
- Local (Mainland): If you plan significant onshore sales or want to bid for government projects, you’ll need a mainland licence.
- Export (Free Zone): If your target markets are abroad, a free zone licence can offer easier global trade, zero corporate tax, and streamlined customs processes.
3. Product Type and Regulation
- If you’re producing sensitive products (medicine, specialised chemicals), you’ll likely need a Specialised Industrial Licence, which involves extra approvals from bodies like MoHAP or ESMA.
4. Ownership Preferences
- 100% Foreign Ownership: Free zones naturally allow full ownership with no local agent (except for mainland distribution). Mainland licences also allow 100% foreign ownership for industrial activities under the updated laws, but you may still need a Local Service Agent for administrative tasks.
5. Cost and Speed of Setup
- SME or certain free zone packages: Lower fees and often faster setup.
- Large-Scale Industrial: More time and capital, but you gain direct access to the entire UAE market.
6. Long-Term Strategy
- If you foresee rapid scaling or the need to partner with government entities, the mainland route might be advantageous.
- If you remain primarily export-oriented, a free zone setup could be more cost-effective and administratively efficient.
Aligning your business characteristics and strategic objectives with these criteria ensures the most suitable manufacturing licence for long-term success in the UAE.
Mainland vs. Free Zone Comparison for Manufacturing Setup
| Aspect | Mainland Licence | Free Zone Licence |
|---|---|---|
| Ownership | 100% foreign ownership is allowed for industrial activities. A local service agent (LSA) may still be needed for government liaison. | Guaranteed 100% foreign ownership; no local partner or agent required within the free zone.
|
| Market Access | Full access to UAE mainland markets. Can bid for government contracts. | Primarily export or free zone-based operations. Selling into the UAE mainland requires a local distributor or an onshore branch.
|
| Licence Fees | Approx. AED 15k–40k per year (depending on emirate, scale, and approvals). | Licence fees often lower (e.g. AED 13k–18k), but mandatory facility leasing in the free zone adds to costs.
|
| Taxation | Subject to UAE corporate tax (9% on net profits above AED 375k), with potential industrial exemptions for raw materials. | Typically 0% corporate tax in free zones (under certain conditions). Raw materials and machinery can be imported duty-free.
|
| Location Flexibility | Can locate anywhere in authorised industrial zones on the mainland. | Must be located within the chosen free zone, with lease agreements tied to that zone.
|
| Government Incentives | Access to local and federal industrial incentives (e.g. cheaper utilities, government financing schemes). | Free zones offer simplified registration, zero import/export duties within the zone, and logistical support.
|
| Minimum Capital & Employees | For MOIAT recognition (Industrial Production Certificate) and customs exemptions, a minimum of AED 250k is generally expected for manufacturing setups. Some emirates historically require ~10 employees for large industrial projects, but enforcement varies by licence and region. | Many free zones allow lower capital thresholds for SME or “light industrial” licences, though AED 250k is crucial for full federal incentives.
|
| Construction Timeline | Certain mainland industrial licences (especially in Dubai or Abu Dhabi) may require starting facility construction within 6 months of approval to avoid dormant licences. Enforcement and grace periods can vary by emirate and project scale. | Most free zones do not impose a strict 6-month construction rule. |
How to Get a Manufacturing Licence in the UAE
1. Define Your Business Activity
Start by specifying exactly what you plan to produce, whether that’s automotive parts, personal care items, food products, or advanced materials. This choice determines which authorities or ministries you may need approvals from. For example:
- Ministry of Health and Prevention (MoHAP) for cosmetics, medical devices, or pharmaceuticals.
- Environmental agencies such as for chemicals or processes with higher environmental impact.
2. Choose Mainland or Freezone
- Free Zone Manufacturing Licence: Consider if a free zone’s benefits align with your business needs (free zones offer tax exemptions, 100% foreign ownership, and no import or export duties).
- Industrial, SME, and Specialised Licences: Decide if operating on the mainland is more suitable for your manufacturing activity (mainland companies can trade directly with the UAE market and undertake government contracts).
3. Reserve Trade Name & Determine Legal Structure
- Reserve a unique name with the Department of Economy (DET) or the free zone authority.
- For mainland companies, you can form an LLC (100% foreign-owned) or a branch of a foreign company. In free zones, you may choose a Free Zone Establishment or Free Zone LLC, depending on the number of shareholders.
4. Seek Initial Approval & Secure Facility Lease
Initial Approval: Apply for initial approval by submitting your business plan, passport copies of shareholders, and the application form. This step is necessary for both mainland (DET) and free zone areas (relevant free zone authority).
Facility Lease: All manufacturing licences mandate a physical site (warehouse, factory, or plot) in an approved industrial zone. Provide a tenancy/lease contract as evidence. For a mainland setup, lease facilities within designated industrial or commercial areas. With free zone setup, the free zone authority will most likely facilitate your lease arrangements.
5. Obtain Additional (External) Approvals
Depending on your manufacturing activity, you may need further clearances:
Health and Safety:
For products impacting health (e.g., food, beverages, pharmaceuticals, cosmetics), secure approvals from the Ministry of Health and Prevention (MoHAP).
Environmental Approval:
Manufacturing processes with potential environmental impacts (such as chemicals and waste management) require approval from the Ministry of Environment and Water. High-impact industries may need an Environmental Impact Assessment (EIA).
Civil Defence:
- Approval of fire safety plans and adherence to local building codes and emergency protocols set by the Dubai Civil Defence.
Utilities:
- Coordinate with utility providers (like DEWA in Dubai) to ensure adequate provision of electricity and water.
Specialised Bodies:
- Handling hazardous materials could require additional permits from the Ministry of Interior or local police departments.
6. Apply for the Manufacturing Licence
Once you have the initial approval, a valid trade name and legal structure, a facility lease, and any required external NOCs, you can proceed to the final licence application:
- For an Industrial Manufacturing Licence, SME Manufacturing Licence or Specialised Manufacturing Licence: Submit all documents to the DET, pay the licence issuance fees, and await the official manufacturing licence.
- For a Free Zone Manufacturing Licence: Provide the same documentation to the free zone authority, who will issue the free zone manufacturing licence.
7. Register with MOIAT (Industrial Production Certificate)
After your local licence is issued (mainland or free zone), register with the Ministry of Industry & Advanced Technology (MOIAT) to obtain the Industrial Production Certificate:
- This federal step is mandatory for recognition as an official industrial entity, and it is required for customs exemptions on raw materials, machinery, and equipment.
- You must submit the new licence, provide proof of sufficient capital (≥ AED 250,000) and a basic overview of your production operations. MOIAT may conduct site inspections.
8. Final Site Inspections
Before you begin operations, authorities will often perform final on-site checks to ensure:
- Fire Safety Compliance: Civil Defence equipment and evacuation routes are in place.
- Environmental Measures: Any required filtration or waste-management systems are installed correctly.
- Zone/Free Zone Standards: If in a free zone, their EHS (Environment, Health & Safety) department may do an inspection.
9. Commence Operations
At this stage:
- Obtain Visas and Permits: You can now apply for find your employees and organise employment visas if necessary.
- Import Machinery/Raw Materials: If you qualify for customs exemptions through MOIAT, you can bring in capital equipment and raw materials at a reduced cost.
- Begin Production: Final checks will now be completed. Your manufacturing facility is cleared to operate within the scope of activities outlined in your licence.
Ongoing Obligations
- Annual Licence Renewal: Renew your DET or free zone licence yearly.
- MOIAT Renewal: Update the Industrial Production Certificate as required (commonly every year or two).
- Health & Safety: Maintain current Civil Defence and environmental approvals.
- Corporate Tax and VAT: Depending on your setup (mainland vs. free zone) and profit levels, comply with UAE tax laws.
Adhering to these steps—while noting any specific approvals for your chosen licence type—will ensure a smooth path toward setting up a legally compliant and successful manufacturing business in the UAE.
Reach Out to Virtuzone to Launch Your Manufacturing Business
The UAE’s manufacturing industry offers extensive growth opportunities bolstered by strong infrastructure, strategic incentives, and a conducive business environment. By carefully choosing the appropriate licence type and diligently following the outlined steps, you can smoothly establish and expand your manufacturing operations within the dynamic UAE market.
At Virtuzone, we specialise in mainland and free zone business setup. Contact us today for a free consultation, and we’ll help you determine the ideal licensing and business model tailored to your manufacturing goals.
FAQ’s
Can I Transfer My Manufacturing Licence Between Free Zones or to the Mainland?
Generally, transferring licences between free zones or to the mainland isn’t permitted directly. You’d need to deregister your existing licence and apply for a new licence. This involves fresh approvals, fees, and processes.
Can I Sell in the UAE Market if I Set up in a Free Zone?
You can, but you typically need a local distributor or a mainland-registered subsidiary to handle sales in the UAE market. Goods entering the mainland from a free zone incur customs duty (usually 5%).
What Documents Are Typically Required for a Manufacturing Licence in the UAE?
Trade name reservation and initial approval.
Passport copies and photos of shareholders/managers.
Notarised Memorandum of Association (for LLC).
Physical lease agreement (warehouse or factory).
Environmental, Civil Defence, and, if applicable, specialised ministry approvals.
Completed application forms (DET or free zone authority).
For MOIAT (federal licence): local industrial licence copy, proof of capital (≥AED 250k), and at least 10 employees.
How Long Does it Take to Set Up a Manufacturing Business in the UAE?
A streamlined setup can take 3–4 weeks for simpler SME factories with minimal environmental impact and a pre-fitted warehouse. Complex projects (e.g., heavy industry requiring lengthy environmental studies) can take 3–6 months or more, particularly if construction permits are involved.
Are There New Incentives for Manufacturing Licences in the UAE in 2025?
Yes. Many emirates introduced fee reductions, utility discounts, and financing packages specifically for manufacturing. Abu Dhabi, for example, has stepped up industrial financing through EDB, and some free zones are offering 50% licence-fee waivers for advanced tech or R&D projects. Check current government announcements or official free zone websites for the latest offers.
Which Industries Require an Industrial Manufacturing Licence in the UAE?
Some industries that require an industrial licence include:
- Bread manufacturing.
- Textile manufacturing.
- Metal casting.
- Equipment and engine manufacturing.
- Petroleum product manufacturing.
- Paper manufacturing.
