To start an industrial project in the UAE or to effect any changes to an on-going project, the owner or proprietor must obtain a license from the Ministery of Finance and Industry. All industrial projects are governed by Act Number 1 of 1979 and subsequent Ministerial orders. In principle, a license for an industrial project is granted to a UAE national. However, licenses may be granted to applicants of other nationalities under circumstances to be considered by the Minister of Finance and Industry, provided that the chairman of the project and his deputy are UAE nationals and that the company implementing the project is incorporated pursuant to the laws applicable in the UAE, ie, the Commercial Companies Act. If the applicant is a natural person who is a party to a project with a company incorporated as above mentioned, the Minister may determine the size or proportion of investment to be contributed by such person, provided his contribution is not less than 51 per cent.
 
An application to establish an industrial unit or project must be made to the Ministry of Finance and Industry, addressed to the Advisory Industrial Committee, in the form designated by the Ministry. Such an application must include:

• Name of the applicant and the trade name of the project;

• Legal form of the project, whether it is a limited liability company or otherwise, capital, and distribution of shares;

• Total cost of the project, necessary equipment, and number of laborers required;

• Annual production when the project comes into full operation;

• Production cost;

• Expected income per month;

• Markets where the products are expected to be sold; and

• Privileges and exemptions required to be granted.

The application must be accompanied by the following documents:

• Feasibility study;

• Approval of the local authority, ie, the Department of Economic Development in the respective Emirate;

• Map of the site allocated to the project;

• Memorandum and articles of association of the company, if the applicant is a company incorporated in the UAE, and a copy of its trade license or a copy of passport of the proprietor, if the applicant is an individual; and

• Letter from a bank operating in the UAE, evidencing the financial ability of the project’s owner.

The applicant must begin establishing the project within six months from the date of approval by the Ministry; otherwise, it will be canceled unless there are justified reasons for the delay.

Incentives

Certain privileges and exemptions may be granted to an industrial project, including:

• Allocation of building site for the project either free or on lease basis;

• Rental of necessary industrial buildings for the project in the industrial areas established by the government;

• Supply of electricity and water with normal charges;

• Exemption from custom import duties on import of machinery, equipment, spare parts, and raw materials necessary for running the project;

• Exemption of locally made products from export duties and taxes; and

• Exemption from tax on profit, capital, and income.

National products have priority in government purchases if they are competitive with similar foreign products in quality and price.