Manufacturing license UAE

Here’s the honest take: both platforms work, but they solve different problems. Free zones give you 100% foreign ownership, streamlined setup, and customs and utility incentives inside specialized industrial clusters. Mainland gives you direct, unrestricted access to the UAE market, government tenders in some cases, and freedom to operate anywhere in the country.

Many manufacturing activities on the mainland now allow 100% foreign ownership, but there are still activity‑specific rules and occasional local‑partner nuances depending on the emirate and the exact product. Free zones often cap you to operating within the zone (and exporting), unless you use a locally licensed distributor to sell in the mainland. If your strategy is export‑heavy and you need bonded logistics, a free zone can be ideal. If you need to sell and service across the country under your own name, the mainland is often the better fit.

The headline cost to obtain an industrial license with company registration, admin, and immigration charges often lands around AED 18,000. Treat that as your paperwork baseline. The big swings come from real estate, power, and safety. Warehouse leases vary by emirate, zone, and power availability—think size, loading docks, and kVA. Fit‑out, racking, flooring, food‑grade finishes, or hazardous storage can dwarf your licensing fee.

Layer in worker visas, medicals, and Emirates IDs. If you provide staff accommodation (very common in heavy or shift‑based manufacturing), add that cost early. Expect insurance (property, liability, workers’ compensation), utility connection and load upgrade fees, calibration and certification of equipment, and regular inspection costs. Your time‑to‑ramp also has a cost: long‑lead machinery, customs clearance, and commissioning can stretch cash cycles, so build a runway, not a sprint.

Ras Al Khaimah Economic Zone (RAKEZ) is a favorite for practical reasons: industrial land, plug‑and‑play warehouses, and customs duty exemptions on importing machinery and, in many cases, spare parts, semi‑manufactured materials, and packaging. RAKEZ issues your license for one year and helps coordinate approvals with RAK EPDA, the municipality, and Civil Defence. After that, audits and renewals are predictable if your HSE house stays in order.

Inside RAK, the Al Ghail zone suits large, heavy industries with plots from 5,000 m² and on‑site labor accommodation. Al Hamra blends light and heavy manufacturing with warehouses from 150 m² to 10,000 m². Al Hulaila is close to Saqr Port, which is gold for bulk logistics. Beyond RAK, JAFZA in Dubai, Hamriyah in Sharjah, KEZAD in Abu Dhabi, and Ajman or Fujairah Free Zones also court manufacturers with power, plots, and port proximity. Each has its own tariff sheet and approval rhythm; choose based on your product, power, and port.

Most delays are not legal—they are technical. Civil Defence will scrutinize egress, sprinklers, gas lines, chemical storage, and alarms. If your process uses heat, pressure, or flammables, expect detailed testing and commissioning. Environmental approvals focus on air emissions, noise, effluent, and waste. If you paint, plate, blend chemicals, or generate steam, budget for scrubbers, interceptors, and permits.

HSE expectations are rising across the board. Free zones often require ISO‑style safety management. You may be asked to keep a register of machines, operator certifications, lock‑out/tag‑out procedures, and emergency drills. Good news: if you design these controls early, approvals are smooth, and insurers price you better. Bad news: retrofitting safety after you install machines is slow and expensive.

Manufacturing is people‑heavy. Many zones expect a baseline workforce—often 10 or more employees—once production starts, though headcount depends on your process. You will sponsor work visas, enroll in the Wage Protection System (WPS), and meet accommodation standards if you house staff. Training is not a checkbox; authorities may ask for forklift licenses, confined‑space training, and chemical handling certificates.

Keep an eye on Emiratisation rules if you are on the mainland. Targets and thresholds shift, and obligations can kick in as you scale. Plan your org chart with a blend of skilled roles that qualify under current rules and production roles that you can source locally or regionally. A clean payroll trail, on‑time WPS, and tidy HR files are the easiest “approvals” you will ever earn.

Selling inside the UAE or the wider GCC can trigger conformity requirements. Food and beverage plants will deal with local municipality food control and, for some categories, Emirates Quality Mark (EQM). Electricals and electronics face ECAS/GSO schemes. Cosmetics and detergents have mandatory registrations. Pharmaceuticals are in their own strict lane. Build testing and certification into your lead times and contracts so that your go‑to‑market is not held hostage by missing paperwork.

If you operate in a free zone and want to sell in the mainland, you will either use a local distributor or set up a mainland entity for on‑shore sales. Exports are straightforward once your products clear the relevant standards. Many free zones encourage export by offering bonded storage and simpler customs interfaces.

Corporate tax is 9% in the UAE, with a special regime for qualifying free zone persons. Manufacturing in a free zone can qualify for 0% on qualifying income if substance, activity, and other conditions are met. Mainland manufacturers follow the standard 9% regime above the threshold. VAT is 5% and registration becomes mandatory once you hit the turnover threshold; exporters often net out the position, but VAT compliance still matters.

Your calendar will include annual license renewals, lease renewals, audited financial statements (often mandatory), and recurring HSE and Civil Defence inspections. Keep your economic substance position in mind if your group also runs distribution or HQ activities out of the UAE. Clean books and documented substance are not optional anymore; they are the backbone of your incentives and your bank relationship.

Pick the site around three realities: power load, logistics, and workforce. If you need high kVA, start with zones that can deliver it today, not in “Phase 2.” If your raw materials are heavy or bulky, stay close to ports or arterial roads. If you run shifts, confirm staff transport and accommodation options. Then design the process to the space, not the other way around. A good plant layout that matches fire and environmental codes will save you months.

Do not underestimate utilities. Chilled water, compressed air, steam, and wastewater handling will shape both capex and approvals. Most zones will review your utility plan at the same time they review your layout. Present a professional pack and you will often get fast‑tracked.