Scrap Metal Business Dubai: 2024 Guide

Scrap metals are in limited supply, but demand continues to grow. The material is sourced globally, and Dubai’s central location makes it one of the top scrap markets in the world. As countries, industries, and companies shift towards a greener future, scrap metal businesses feed the scrap recycling industry for international markets – and the United Arab Emirates is shaping up to be a frontrunner in this burgeoning sector.

If you’ve ever considered opening your own company, starting a scrap business in Dubai is a great way to tap into growing demand.

So, let’s jump right in. We’re going to look at the following:

  • Scrap business in Dubai and the UAE – an overview
  • Types of scrap materials in Dubai
  • How to start a scrap business in Dubai – Step by step
  • Cost of starting a scrap business in Dubai
  • Opportunities for scrap businesses in Dubai
  • Business setup in Dubai with Trade License Zone

Scrap business in Dubai and the UAE – an overview

The current state of scrap in Dubai is promising for budding entrepreneurs. The scrap recycling industry grew by around 0.9% annually for many years, but since 2019 it has grown by an average of 5.4% per year. The market size has boomed in Dubai and across the UAE, with demand for scrap material in Dubai at an all-time high. The demand comes from sectors such as construction, automotive and shipbuilding.

There are different scrap businesses, from small operators to large corporates. A scrap company importing and exporting scrap metal is the most popular business activity in this area, with ferrous and recycled metals driving the market growth even harder. Dubai’s scrap recycling industries are robust and offer numerous opportunities for growth and expansion.

The COVID-19 pandemic affected the demand for scrap metal in Dubai – as it did on all international markets – but in Dubai there has been a strong rebound. Some market trading prices for scrap metal such as copper and tin have risen sharply, both for buying and selling. This has dampened the market but not hampered it in the long term.

The forecast for the scrap metal business market in Dubai is expected to reach new highs in 2023 and beyond as the world’s demand for scrap metal continues to increase. It is expected to continue to grow for the next decade at this relentless pace.

Types of scrap materials in Dubai

There are the different categories of scrap metal you can deal in:

  • Metal scrap – copper, aluminium and steel
  • Plastic scrap – PET, HDPE and LDPE
  • Electronic scrap – computers, mobile phones and other electronic devices

How to start a scrap business in Dubai – Step by step

When asking yourself how to start a scrap business in Dubai, it can be tricky – and lengthy – if you’re unfamiliar with the business setup regulations of the UAE. This step-by-step guide outlines the process to start a scrap metal business in Dubai.

Step 1: Partner with Trade License Zone

Starting a business like a scrap metal business can seem like an overwhelming process. That’s why partnering with Trade License Zone will help you with your scrap business setup and guide you in the necessary business-centric corporate policies, Dubai Municipality approvals, governmental trade regulations and trade license application process.

Step 2: Choose a company name

You will need to choose a name for your scrap trading operation. You can use your name as part of the company name, but you must use your name, not just your surname or initials. The UAE government has strict naming rules, including that no business names can contain offensive or profane language or any references to Allah or Islam.

You will need to submit your chosen name along with two alternatives, in order of preference, to the UAE’s Registry Office. Your scrap metal trading business name will be one of those if the first name isn’t available. To avoid unnecessary hassles, Trade License Zone’s highly experienced team can help you register the business name and notify you when you can proceed to the next step of the trade license and company registration process.

Step 3: Select your business activities and business setup jurisdiction

Every business in the UAE must have a trade license. There are many trade licenses, even ones specific to the UAE scrap industrial sector. You’ll also have to think carefully about selecting your business activities: they must align with your business model and plans.

There are over 2,000 to choose from, and if you fail you select a business activity that you perform later, you may be liable for penalties and more. The specialists at Trade License Zone can help navigate you through, enabling you to build a profitable scrap business.

The UAE offers two main types of business jurisdictions: Free Zone and Mainland companies. Free Zone setup companies are a popular choice as they allow 100% ownership, but extra steps are needed for trading within the domestic scrap market.

Trade License Zone helps thousands of entrepreneurs each year, and our experienced staff will help with this critical step.

Step 4: Essential requirements for your scrap metal trading license

You must apply for a scrap metal trading license to participate in the scrap metal industry, observing these essential requirements:

  • Join the Scrap Metal Deal Association in Dubai
  • Hold a business registration certificate
  • Hold a tax compliance certificate
  • Have a business permit
  • Submit copies of passports, ID cards, and passport photos of all company directors, shareholders and local sponsors

Step 5: Submitting scrap metal business license application

After completing all the above steps, you can submit your trade license application to the Dubai Department of Economic Development (DED) or through the Free Zone you’ve chosen. To ensure there are no delays, errors, or rejections, Trade License Zone’s consultants can help you with this vital step.

Step 6: Getting your trade license

When your trade license is approved, you can apply for your UAE Residency visa to live and work in Dubai. The trade license may entitle you to sponsor the visas of family and staff, depending on the conditions of the specific trade license. At this stage, you can open a corporate bank account for the business and begin scrap trading.

Cost of starting a scrap business in Dubai

The cost of starting a scrap metal business in Dubai ranges from AED 10,000 to AED 30,000. The cost varies due to several factors, such as scrap metal business license costs, location, scrap metal business activities, business setup and scrap metal company structure, and more.

For a free consultation, please contact the experienced team at Trade License Zone. The specialists will help you navigate the different scrap metal trading license types and costs and give you a breakdown of the steps required to get a scrap metal business license.

Opportunities for scrap businesses in Dubai

Recycling businesses are internationally important, and Dubai strives to be number one in this sector. Scrap businesses offer benefits in energy conservation, economic development opportunities, environmental benefits, and more.

Recycling and reuse of scrap materials

Recycled materials conserve energy, reduce greenhouse gas emissions, save natural resources, and prevent waste metal, scrap material, scrap metal, and scrap e-waste from landfill.

Export of scrap materials to other countries

The process of importing and exporting Dubai’s scrap metals contributes to the global circular economy in which export scrap is recycled into tradable and usable materials for new products. Scrap traders’ business operations are integral in reducing scrap metals and electronic waste.

The scrap metal industry structure as a whole reduces global energy consumption and pollution, and the process of transferring scrap metals into useable materials and products stimulates more business operations in other countries.

Diversification of scrap business operations

For a scrap recycler, there are numerous opportunities for business growth by diversifying the recycling metals, ways to collect scrap and purchase scrap, metal sorting, scrap metal collection in other markets, and more. From solid waste management and construction materials to e-waste, the international markets will pay top dollar.

Business setup in Dubai with Trade License Zone

Business setup in the UAE is straightforward with an expert partner such as Trade License Zone. When starting a scrap business in Dubai, we help you with all formalities required, including a scrap metal trading license, government approvals, business setup, company registrations, local sponsor dealings, and more.

The specialists at Trade License Zone can get started once you provide us with some basic documentation of your business and a little information about the nature of your business. Then, just sit back and let our team take care of the rest.

We’ll manage your business license application and business activities, communicate with all necessary authorities and formalities and report when you’re ready to open your scrap metal recycling company. It really is that simple.

Contact us to get a personalized quotation based on your business activity