metal scrap business in Dubai

How to Start a Metal scrap business in Dubai, UAE

Written by Mayra
Written by Mayra

Business Setup Advisor

Table of Contents

How to Start a Metal scrap business in Dubai, UAE

Dubai is emerging as a global industrial hub, and the scrap business in Dubai is no exception to this growth. With the city handling around 1.5 million tons of metal scrap annually, the metal scrap business in Dubai holds immense potential for both import and export opportunities. If you’re considering setting up a scrap metal business in Dubai, you’ve come to the right place. Here’s how you can get started.

Benefits of Establishing a Scrap Business in Dubai

There are numerous advantages to setting up a scrap metal business in Dubai:

1. Energy Savings

Recycling metal is significantly more energy-efficient than producing new metal. For instance, recycling aluminum saves up to 92% of energy compared to mining it.

2. Economic Opportunities

The scrap metal industry creates numerous jobs. Recycling metal can generate more employment than traditional waste disposal methods.

3. Environmental Protection

Recycling metal reduces greenhouse gas emissions, contributing to a cleaner environment, which is a major focus for Dubai’s sustainability initiatives.

Document Required for open Scrap Metal Business in Dubai

Required Documents for Starting Scrap Metal Trading Business in Dubai, UAE
  • Passport copies.
  • Tenancy contract.
  • License Application.
  • Governmental forms.
  • Attested LLC agreement.
  • Initial approval certificate.
  • EJARI registration certificate.
  • Name reservation certificate

Steps to Start a Scrap Metal Business in Dubai, UAE

Starting a scrap metal business in Dubai might seem challenging, but with the right guidance, it can be an incredibly lucrative venture. Below are the essential steps:

1. Conduct Market Research to Start a Scrap Business in Dubai

Before jumping into the scrap metal business in Dubai, conduct thorough market research. This step is critical as it helps you understand the competition, growth potential, and the profitability of the business. Analyzing the market data will provide insights into revenue predictions and profit margins, giving you a strong foundation to launch your business.

2. Choose a Company Name

Your business name is important for branding. Make sure it’s unique, easy to remember, and compliant with Dubai’s naming regulations. A unique and compliant name will help you stand out in the competitive scrap metal business in Dubai.

3. Select a Strategic Business Location

One of the major decisions you will make is choosing a location. You can set up your business either on the mainland or in one of Dubai’s free zones. Both have their pros and cons. A free zone provides 100% ownership of your company and is a quick way to start your business. However, a mainland setup allows you to tap into local markets. The choice depends on your business model and needs.

4. Obtain a Scrap License in Dubai

Acquiring a scrap license in Dubai is mandatory before you can commence business operations. Depending on the type of scrap you plan to deal with and your location (free zone or mainland), there will be specific requirements. Businesses in the free zone are typically restricted to trading with other free zone companies, while a mainland license opens up a broader market. Ensuring you meet all legal requirements will allow you to avoid complications down the line.

5. Start Your Business Operations

Once you’ve secured your scrap license in Dubai, you can start your operations. Key areas to focus on include hiring skilled staff, managing resources efficiently, and having a solid business plan. With the right management and strategy, your scrap business in Dubai can thrive in this growing industry.

Cost of Starting a Scrap Metal Business in Dubai

The scrap business cost in Dubai can range from AED 10,000 to AED 30,000, depending on factors such as the type of license you choose and your business’s operational scale. If you’re looking for a cost breakdown or personalized consultation, experts like Company Setup Consultants can assist you in estimating the total cost.

Details of Scrap Metal Trading License Cost in Dubai

Government ChargesFees AED
Initial Approval120*
Trade Name (in English)620*
Tasheel Preapproval350*
Tasheel Memorandum of Associate345*
Trade License fees11960*
Foreign Trade Fees2000*
Corporate PRO Services Fees6000*
Total Cost of Scrap Metal License21 395*

How Can We Help?

If you’re ready to dive into the scrap business in Dubai but unsure where to begin, we can help. Our experienced business consultants can guide you through every step, from market research to securing the required licenses.

Faq

1. What are the licensing requirements for a scrap metal business in Dubai?

To start a scrap metal business in Dubai, you need to obtain a business license from the Dubai Department of Economic Development (DED) or from one of the free zones. The type of license will depend on whether you are setting up on the mainland or in a free zone.

2. Can I have 100% ownership of my scrap metal business in Dubai?

Yes, if you set up your business in a free zone, you can have 100% ownership. If you opt for a mainland setup, a local partner may be required.

3. What types of scrap metal can I deal with in Dubai?

You can trade various types of scrap metals, including aluminum, copper, steel, iron, and more. However, the types of scrap you deal with must comply with Dubai’s environmental and regulatory standards.

4. What are the environmental regulations for a scrap metal business in Dubai?

Dubai has strict environmental regulations for handling scrap metal, including safe disposal practices and recycling requirements. You must comply with these to avoid penalties and to contribute to environmental sustainability.

5. What are the benefits of setting up a scrap metal business in a free zone versus the mainland?

Free zone benefits include 100% ownership, tax exemptions, and easier business setup. However, setting up on the mainland allows you to trade directly within Dubai and the UAE market without restrictions.

6. Is it necessary to have a yard or warehouse for my scrap metal business?

Yes, you’ll need a yard or warehouse to store the scrap metal and equipment. The location and size will depend on the scale of your business and the types of scrap metal you plan to handle.

7. What is the process of exporting scrap metal from Dubai?

To export scrap metal from Dubai, you’ll need an export license and ensure compliance with customs and export regulations. Free zone companies benefit from streamlined export processes and access to global markets.

8. How long does it take to set up a scrap metal business in Dubai?

Setting up a scrap metal business in Dubai typically takes a few weeks, depending on factors like license approval, securing a business location, and complying with regulatory requirements.

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