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Starting a scrap metal and recycling company in Dubai offers investors both an environmental contribution and a profitable business model. Depending on the nature of the activity, the required license generally falls under the "Scrap Metal Trading License," "Recycling Activity License," or "Industrial License" category.
Setup costs vary based on the chosen jurisdiction (free zone or mainland), visa quota, and facility needs. You can find current indicative cost ranges and the tax framework in the tables below. Warehouse and facility rental costs vary by location.
Thanks to its strategic location, world-class port and logistics infrastructure, and investor-friendly regulations, Dubai is one of the most attractive hubs in the Middle East for scrap metal trading and recycling. Its bridging position between Asia, Europe and Africa, the availability of 100% foreign ownership, and free zone incentives make it a strong foundation for entrepreneurs entering the sector. In this guide, we cover the steps to legally establish a scrap metal and recycling company in Dubai, the license types, cost ranges, and the current tax framework.
The scrap metal and recycling sector in Dubai holds strategic importance for the region, both economically and environmentally. Rising global recycling awareness, the United Arab Emirates' circular economy vision, and the city's advanced export infrastructure are driving rapid market growth. Maritime shipping through Jebel Ali Port allows ferrous and non-ferrous metals to be collected and returned to the economy at large volumes.
Recycling scrap metal consumes far less energy than primary mining, reduces greenhouse gas emissions, and helps conserve natural resources. Economically, recycled metals provide a low-cost and sustainable raw material for the manufacturing industry, making scrap trading a profitable business model.
The license required for scrap metal and recycling activity in Dubai depends on the nature of the business and its location. Trade-focused activities require a "Scrap Metal Trading License," while processing and recovery require a "Recycling Activity License" or "Industrial License." For mainland setups, the competent authority is the Dubai Department of Economy and Tourism (DET/DED); in free zones it is the relevant free zone authority. Environmental processing facilities may also need additional approvals from local municipality and environmental authorities.
With its unique geographic location and advanced logistics, Dubai acts as a trade bridge connecting suppliers and buyers worldwide. Access to busy maritime and road routes accelerates import and export operations, while dedicated storage areas and processing facilities ensure an uninterrupted supply chain. Free zone tax incentives and 100% foreign ownership make investment in scrap trading even more attractive. Together, these factors position Dubai as one of the leading global hubs of the sector in terms of both financial return and environmental sustainability.
The city's circular economy goals have made recycling one of its priority investment areas. Growing environmental awareness raises demand for sustainable solutions at both corporate and individual levels, widening market-entry opportunities for new entrepreneurs.
Setup costs vary based on the chosen jurisdiction (free zone or mainland), license type, visa quota, and warehouse/facility needs. The table below summarizes indicative ranges commonly seen in the market as of July 2026. For exact figures, refer to the current tariffs of the relevant free zone authority or the DET.
| Cost Item | Indicative Range (AED) | Notes |
|---|---|---|
| Free Zone Trade License | 12,500 – 30,000 | Varies by visa quota and package |
| Mainland License | 15,000 – 50,000 | Depends on DET approvals and activity |
| Industrial / Recycling License | Variable | Requires facility and environmental approvals |
| Warehouse / Facility Rental | Location-based | Collection, sorting and processing area |
| Visa & Residency Procedures | Per headcount | Investor and staff visas |
Reading market needs correctly, selecting the right activity license, and managing profit margins all require knowing which scrap types are traded most.
| Scrap Type | Examples | Use Areas |
|---|---|---|
| Ferrous Metals | Iron, steel, cast iron | Construction, automotive, heavy industry |
| Non-Ferrous Metals | Aluminum, copper, brass, lead | Electrical, automotive, aviation |
| Electronic Waste (E-Waste) | Motherboards, phones, computers | Precious metal recovery |
| Plastics & Polymers | PET, HDPE, PVC | Packaging, construction, consumer goods |
| Construction/Demolition Waste | Scrap metal, concrete, wood | Infrastructure and rebuilding |
| Precious Metals | Gold, silver, platinum | Electronic circuits, jewelry |
Corporate tax in the United Arab Emirates is governed by Federal Decree-Law No. 47 of 2022. Qualifying Free Zone Persons (QFZP) that operate in a free zone and meet all regulatory conditions may benefit from a 0% corporate tax incentive on their qualifying income. The table below summarizes the current official rates.
| Item | Rate / Threshold | Note |
|---|---|---|
| Corporate Tax | 0% (up to AED 375,000) / 9% (above) | Federal Decree-Law No. 47/2022 |
| VAT | 5% standard rate | Mandatory registration: AED 375,000/year |
| Voluntary VAT Registration | AED 187,500 | Voluntary threshold |
| Small Business Relief | Revenue ≤ AED 3,000,000 | Subject to election for the period |
In scrap metal operations, license selection is decisive for both legal compliance and operational flexibility. A trade license may suffice for buy-and-sell businesses, while companies performing cutting, sorting, melting or recovery need an industrial or recycling license and related environmental approvals. The wrong license type can lead to activity restrictions and extra costs later. Therefore, clarifying the intended scope of activity at the start of the business plan and selecting the appropriate license is essential.
To stand out in this increasingly competitive market, conducting thorough market analysis, building a reliable supplier network, and planning an appropriately scaled facility in the right location are critical success factors. Focusing on high-value segments such as non-ferrous metals and electronic waste can improve profit margins. Timely tax registrations and regular accounting processes support both legal compliance and sustainable growth.
If you would like professional support with setup, licensing, tax registration and bank account processes, you can reach us via our contact page or quickly request a quote.
Notice: The rates, thresholds and cost (amount) information on this page have been prepared for July 2026 and are indicative only. Tax rates, license fees and regulations may change over time. For the most current amounts and rates, please review the websites of the relevant official institutions (e.g., the Federal Tax Authority and the Dubai Department of Economy and Tourism).
Depending on the activity, a Scrap Metal Trading License, Recycling Activity License, or Industrial License is obtained. A trade license may suffice for buy-and-sell, while processing and recovery require an industrial/recycling license and environmental approvals.
Costs depend on free zone vs mainland choice, visa quota, and facility needs. Free zone licenses are typically AED 12,500–30,000 and mainland licenses AED 15,000–50,000 as indicative figures. Refer to official sources for exact amounts.
Qualifying Free Zone Persons (QFZP) meeting all regulatory conditions may benefit from a 0% corporate tax incentive on qualifying income. The general rate is 0% up to AED 375,000 and 9% above.
The standard VAT rate in the UAE is 5%. VAT registration is mandatory for businesses whose annual taxable supplies and imports exceed AED 375,000; voluntary registration is possible above AED 187,500.
Yes. 100% foreign ownership is possible in free zones, and many mainland activities also allow foreign ownership. Details vary by activity type and jurisdiction.
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