Manufacturing in Dubai, UAE: Unlocking Global Opportunities

Dubai, the dazzling gem of the United Arab Emirates, is more than just a worldwide financial centre; it also stands as an emerging manufacturing hotspot. Boasting cutting-edge infrastructure, pro-business policies, and a strategic position. Dubai presents unmatched opportunities for companies aiming to grow in this vibrant industry. Let’s explore why Dubai and its surrounding Emirates could be the prime choice for your manufacturing endeavours.

Why Choose Manufacturing in UAE?

1. Optimal Location and Connectivity

Dubai connects the East and West with its prime location, featuring the Jebel Ali Port, one of the world’s largest, and two international airports for seamless logistics. This infrastructure connects businesses to over 150 ports, enhancing supply chain efficiency. The Cargo Mega Terminal at Dubai Airport is one of the largest cargo hubs in the region and handled over 1.8 million tonnes of cargo in 2023. Moreover, the upcoming Al Maktoum Airport in Dubai is expected to be the world’s largest airport and 5 times the size of the current Dubai airport.

2. Incentives from the government and policies that favor businesses

Dubai’s free zones offer benefits such as 100% foreign ownership, ZERO corporate taxes for 50 years, ZERO personal income tax, and customs duty exemptions. They also simplify the business setup process for quicker operational launches.

3. Economic Development and Variety

Manufacturing in UAE currently accounts for only 11% of the UAE’s GDP with an output of about USD 26 billion in 2023. The UAE’s new economic diversification strategy focuses significantly on developing the domestic manufacturing in IAE. Initiatives like Operation 300bn aim to boost the manufacturing output to reach to USD 81.7 billion by 2031, over three times its current output.

What’s Powering the Boom?

The UAE’s rise as a regional powerhouse is no accident. With a GDP of USD 509 billion in 2023, it’s the third-largest economy in the Middle East, trailing only Saudi Arabia and Israel. The UAE’s manufacturing sector isn’t growing in isolation strategic policies and innovative approaches are fueling it:

• Abu Dhabi Industrial Strategy: Focused on advanced manufacturing.
• Greenfield Investments: With investments worth USD 6.4 billion directed into manufacturing in 2023, investors are betting big on the UAE.

The figures are self-explanatory.

The UAE’s economic transformation is remarkable. Once reliant on oil, the country now leads the way in non-oil economic diversification, with 72.4% of its GDP in H1 2023 driven by non-oil sectors.

Key Sectors: Manufacturing in Dubai, UAE Ecosystem

Dubai caters to a diverse range of manufacturing industries, offering immense growth potential in the following sectors:

1. Metals

The UAE’s metal industry thrives, with a steel production capacity of 7.72 million tons. Driven by strong construction demand, plans aim to boost this capacity to 15 million tons by 2030.

2. Chemicals and Petrochemicals

This sector comprises 22% of the UAE’s manufacturing and utilizes abundant raw materials and strong export markets. Investment opportunities exist in polymers and specialty chemicals.

3. Pharmaceuticals

The pharmaceutical industry will reach a market size of USD 4.7 billion by 2025, supporting Dubai’s manufacturing goals. The UAE hosts 23 plants producing 2,500 local medicines, cementing its position as a regional hub. UAE is also home to one of the world’s largest pharmaceutical company, Julphar.

4. Food and Beverages

Dubai’s food and beverage sector is set to earn USD 44 billion by 2026, with over 2,000 businesses contributing to processed food and beverage manufacturing opportunities.

The Role of Free Zones in Manufacturing in Dubai, UAE Success

Free zones are critical to Dubai’s manufacturing ecosystem, offering numerous benefits to businesses. Here’s a snapshot of some key free zones:

It’s the free zones—special economic areas designed to provide businesses with unparalleled benefits:

• 100% foreign ownership
• Zero corporate and personal income tax
• World-class infrastructure and connectivity
• Proximity to global trade routes

AquaChemie, a leading GCC chemical firm, invested USD 100 million in JAFZA for corporate offices and specialty chemical manufacturing, including a USD 50 million petrochemical terminal launched in 2023 with 34,000 cubic meters of storage. This expansion aims to grow revenue from USD 150 to USD 400 million.

Himalaya Wellness Company LLC is investing $54.4 million in a Dubai pharmaceutical factory. The first phase will produce 3 billion tablets, 15 million syrup bottles, and 3 million ointments annually, targeting global demand, especially in the Middle East, until 2030.

In 2015, Nestlé invested USD 145 million in a 175,000-square-meter factory in Dubai for regional markets. The Nestlé UAE hub exports nearly 100,000 metric tons annually to over 30 countries, primarily in the Middle East and North Africa, highlighting the strategic benefits of manufacturing in the UAE’s favorable location and infrastructure.

Hamriyah Free Zone attracted the Meraki Group, which built a 30,000-ton steel plant, showcasing the UAE’s ability to combine strategic location with business efficiency.

How to Establish a Manufacturing Business in the UAE

1. Understanding the market and conducting feasibility analysis- Assess market demand, competition, expenses, and regulatory obligations to maintain business viability.
2. Select Your Location— Choose between theMainland (for flexibility) or Free Zones (for 100% ownership and tax advantages). 
3. Company Incorporation – Obtain an industrial license, trade permits, and necessary environmental approvals from the relevant authorities.
4. Factory Establishment – Lease industrial land, adhere to zoning regulations and obtain safety clearances. 
5. Regulatory Approvals – Seek approvals from the Ministry of Industry, Civil Defense, and the Municipality. 
6. Workforce and Visas: Register and apply for investor or employee visas and comply with Emiratisation laws. 
7. Customs and Imports – Manage duty exemptions, complete registration with relevant authorities, and secure the necessary product certifications.
8. Financial Considerations and Taxes– Budget for setup costs, operational expenses, customs duties, regulatory fees, and research government incentives for industries.

How can Stratrich help you set up a manufacturing business in the UAE?

Stratrich is your trusted partner in establishing a successful manufacturing business in Dubai. With extensive expertise in the UAE’s industrial landscape, we offer:

1.  Market Research and Feasibility Studies
2. Incorporation Support
3. Location Advisory
4. Regulatory Advisory
5. Tax Advisory
6. Corporate Services

At Stratrich Consulting, we have streamlined the business setup process in Dubai, UAE to ensure it is straightforward and hassle-free. By leveraging our expertise, you can navigate away from complications and concentrate on your business goals.

Conclusion

Dubai’s manufacturing sector offers a unique blend of opportunity, innovation, and growth. Its strategic location, robust infrastructure, government incentives, and thriving free zones make it the perfect destination for global businesses looking to scale operations. As the UAE continues diversifying its economy and investing in industrial growth, it is time to tap into Dubai’s potential.

Are you ready to unlock the doors to global manufacturing opportunities in Dubai? Let us guide you through the journey and help turn your vision into a thriving reality.