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Industrial Manufacturing License
For every industrial activity, an Industrial Manufacturing License is needed. The rule of thumb is that an activity is likely to be industrial if it involves the use of specialized plant equipment. Some of the examples of industrial activity in the United Arab Emirates are as follows
- Raw materials processing
- Petroleum and metal extraction
- Fabric production & Textiles manufacturing
- The casting of metals such as iron & steel
- Appliances and machinery manufacturing
- Manufacturing of paper products
- Metal casing, containers & boxes manufacturing
- Structural steel, steel workshop and tool manufacturing
- Coating, insulations, seals & protection materials manufacturing
- Waste collection and treatment
- Manufacturing of wood, wood products and Furniture
- Adhesive & paper slitting
- Glass industries & chinaware manufacturing
- Agricultural equipment & accessories manufacturing
- Lenses cutting & glass repairing
- Manufacture of gold and precious stones cutting
- Light aircraft manufacturing & maintenance
- Meat processing
- Manufacture of batteries
- Plastic industries manufacturing home appliances
- Air conditioning units assembly
- Advertising & decorative models manufacturing
- Production of petroleum products
- Manufacture of motor vehicles, motorcycles & its spare parts
- Processing like filling, segregating and packaging of products
The Industrial Manufacturing License is granted by the Department of Economic Development in the emirate where you set up your plant. For example, if you were setting up a factory in Sharjah, the relevant authority would be the Sharjah Economic Development Department or SEDD. The rules are different for each emirate. For instance, you need both a commercial space for your operations as well as a warehouse for storage in Dubai. A virtual office cannot be used to obtain an Industrial Manufacturing License.
The company for which the Industrial Manufacturing License is applied must have a Local Sponsor who owns 51% of the shares. The Local Sponsor must be an Emirati (this is the term used to refer to those who are citizens of the United Arab Emirates) who has attained the age of 21 or a company incorporated in the United Arab Emirates that of fully owned by Emiratis. So the company formation documents must be drawn up accordingly at the time of incorporation.
A good business setup consultant can put you in touch with the right Local Sponsor, who will agree to a hands-off approach when it comes to the running of the company. He/She can sign over a Power of Attorney document entrusting the affairs of the company to you. This way, you will be in total control over your company. The Local Sponsor does not take home 51% of the profits from the company, but he/she needs to be paid a Local Sponsor Fee in return for his/her services towards your company. The Local Sponsor legally represents your company before all Government agencies.
Before applying for an Industrial Manufacturing License, all the necessary approvals must be proposed to be carried out, these might be from the Ministry of Health and Prevention, the Ministry of Environment and Water, and/or the Ministry of the Interior. Your business setup consultant should be able to advise you better on which permissions are mandatory, depending on your operations.