Dubai has got its own definite and undeniable advantages for various business directions including the very different manufacturing.
The target markets in this matter can also be very different. It can be goods intended exclusively for the local market as well as items intended for the regional market along with various goods for international markets.
The types of factories in Dubai or other Emirates can be very different. These factories and manufacturing plants can be opened as independent business (for example, set up of a totally new business with no connection to the existing business); as a setup of an existing industrial production chain or as an expansion of a general business strategy of the group.
In one of the countries, for example, the basic component is produced, whereupon the parts are delivered to the Emirates, which then are used for manufacturing of a final product within the premises of own factory/enterprise or as a intermediate part which is then sent further for final production phase.
There are other solutions possible as well, for example, the initial conversion of raw material or manufacturing of parts which are then exported to other country such as the countries of Eastern and Western Europe or any other countries. Own enterprise/manufacture in UAE can be of a double advantage from that perspective.
The first set of definite advantages of Dubai and other Emirates of UAE for manufacturing activity are the clear advantages according to the following parameters:
- Taxes – There are no taxes for factories working in the Free Trade Zones in UAE.
- Logistics – the Emirates is one of the powerful international hubs giving definitive advantages when working in this country.
- The cost of labor force – the main source of labor is from countries like India, Pakistan, Philippines and others whereby the trade union is prohibited in the Emirates by the government.
- Necessary infrastructure for business – land, ready industrial premises, offices etc.
- The cost of energy sources.
- Favorable geographical location.
- Presence in an actively developing region, which gives new opportunities for business.
Owing to the absence of taxation in Dubai and other advantages 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 production chain and structuring of manufacturing processes between countries.
Apart from the advantages in Dubai mentioned above, there is another important component, which is the development of manufacturing processes between countries so that apart from the advantage of taxation, an opportunity to optimize the customs duties can also be utilized. For instance, if the import of any raw material is subjected to a high level of customs duty in the country of destination, its initial conversion to an intermediate product can result another product classification and other customs duties; it then makes a total sense to consider United Arab Emirates from that perspective as well.
The import and export of raw material, intermediate products and final products by the companies and enterprises working in the Free Trade Zones are not subject to customs duties in Dubai, UAE.
In addition to the aforementioned, apart from the optimization of the industrial processes and expenses, it is possible to develop a manufacturing process so that the main profit will be attributed to the industrial unit located in the United Arab Emirates.
In this instance all profits, gained in the United Arab Emirates, can be acquired without any tax implications, due to the reason that the manufacturing /production located in the Free Trade Zones of UAE are fully exempt from all types of taxes in UAE.
There is one more important aspect worth to pay attention to. In addition to the Dubai’s advantages mentioned earlier, if a certain production percentage of the manufacturing chain is the conversion of materials in UAE, then the item may acquire the status “made in UAE”, which can positively affect further sales and the image of a product, which in turn means higher consumers’ confidence and sales prices.
Last but not least – the business ethics of Dubai is at the highest level giving an additional comfort and safety when doing business.
In conclusion, opening your own manufacture in the United Arab Emirates means significant opportunities for the expansion and optimization of your business. There are many options of what to form and what part of the production chain to transfer to Dubai, UAE.
If you require to make a professional evaluation of all opportunities and advantages for opening a factory/enterprise in Dubai or any other Emirate in UAE or if you require a full legal support when opening that this type of business in the United Arab Emirates – our company has got the knowledge and experience in this matter.
- Market research according to the parameters set.
- The selection of the most suitable types of company registration type and its location.
- Preparation of all necessary documents from the shareholders and drafting shareholders agreement.
- Preparation of companies business plans and the conversion of business plans to the standards accepted by the respective authorities in UAE.
- Preparation of the documents for obtaining construction/modification permits of industrial lines by different government authorities including the ones for protection of environment.
- Preparation of documents for obtaining of preliminary construction permits of manufactures and enterprises in Dubai and other Emirates.
- Obtainment of licenses for industrial companies (for manufacturing) and trading (for purchasing raw materials and sale of finished products).
- Preparation and signing of land lease agreements.
- Account opening in banks in UAE and abroad.
- Obtainment of visas in the Emirates for owners/management of a company.
- Obtainment of documents and permits for connections to utilities for factories e.g. electricity, water and other utilities.
- Obtainment of final permits for startup and running of a factory.
Our knowledge and real-world experience allows us to provide support in opening of any type of production facilities in Dubai, UAE with virtually any scope of services from our side ranging from companies’ registration to obtaining all permits and approvals for construction and operation of a plant / industrial facility.