Manufacturing and Industrial Investment in the UAE
The UAE manufacturing entry turns on the route — free zone, mainland, contract manufacturing or corridor — plus ICV, customs, the 9% tax and EDB financing.
The UAE is deliberately building an industrial base through Operation 300bn and Make it in the Emirates, with industrial financing, procurement localisation and offtake opportunities. For a foreign manufacturer the decision turns on the route in — and on the In-Country Value position.
The UAE has set out to roughly double the size of its industrial sector by 2031, and it is backing the ambition with real instruments: the Operation 300bn strategy and the Make it in the Emirates programme, run by the Ministry of Industry and Advanced Technology; the In-Country Value programme, which steers government and major-company procurement toward suppliers with high local content; concessional financing from the Emirates Development Bank; Make-it-in-the-Emirates offtake and procurement opportunities; and competitive industrial energy. For a foreign manufacturer the opportunity is genuine, but the structure turns on two questions before the incentives: which manufacturing route fits the business, and how to position for the ICV preference. This page sets out the model and the entry.
The right structure depends first on what kind of manufacturer you are: an exporter or regional supplier; a producer targeting the UAE domestic market; a supplier to government and major government-linked buyers, where In-Country Value shapes the award; a foreign brand using a UAE contract manufacturer; or a group also manufacturing in India. Each points to a different entry.
At a glance
- The UAE is building industry through Operation 300bn (industrial GDP target roughly doubling by 2031) and the Make it in the Emirates programme, run by the Ministry of Industry and Advanced Technology.
- The decision turns first on the route: a free zone (full foreign ownership, attractive customs treatment for imports and re-exports, and a potential 0% corporate-tax rate on qualifying income subject to the Qualifying Free Zone Person conditions; best for export and regional output) or the mainland (UAE-domestic sales, government and large-buyer procurement, and Gulf Cooperation Council (GCC) market access).
- Beyond the free-zone-or-mainland choice sit a free-zone-plus-mainland model, contract or toll manufacturing for a foreign brand, and the India-UAE corridor — the route follows the customer and the role of the UAE facility.
- The In-Country Value programme is a central lever: government bodies and national champions use the ICV score to direct procurement toward suppliers with higher local content. It is a procurement preference, not a guaranteed order.
- Emirates Development Bank financing and Make-it-in-the-Emirates offtake and procurement opportunities support priority industrial projects.
- Selling from a free zone into the UAE mainland triggers import duty and usually a mainland distributor — so a free-zone-plus-mainland structure is common.
- Priority sectors span chemicals, metals, electrical and electronics, food, pharmaceuticals, machinery, hydrogen, medical and space.
The UAE industrial strategy: Operation 300bn and Make it in the Emirates
The UAE's industrial push is government-led and well-instrumented. Operation 300bn, launched by the Ministry of Industry and Advanced Technology, aims to raise the industrial sector's contribution to GDP from around AED 133 billion to AED 300 billion by 2031, across roughly a dozen priority sectors. Its delivery brand, Make it in the Emirates, convenes investors and manufacturers and pairs them with offtake and procurement opportunities, financing and enablement. Behind it sit the In-Country Value programme, which scores suppliers on local manufacturing, investment and Emiratisation and channels procurement accordingly; the Emirates Development Bank, with a portfolio of around AED 30 billion earmarked for priority industrial sectors; and competitive industrial energy and serviced industrial land in the zones. MoIAT reports growing volumes of industrial agreements at the annual Make it in the Emirates forum — the 2026 edition, the fifth and largest to date, convened more than AED 171 billion in industrial agreements for local manufacturing, spanning new investment and financing commitments. These announcements should be refreshed at publication, as the annual figures move quickly, and the positions here are current to 2026. For a foreign manufacturer the point is that the UAE is using finance, procurement localisation and industrial-zone infrastructure to encourage manufacturers to localise production — and the structure decides how much of that is captured.
Which manufacturing route are you taking?
A UAE manufacturing entry is not one structure. The right route depends on the customer and the role of the UAE facility.
An export-led manufacturer may use a free-zone industrial company, importing inputs into the zone and exporting finished goods regionally or globally. A UAE-domestic or government-facing manufacturer may need a mainland industrial licence, stronger ICV positioning and direct access to public-sector or national-champion procurement. A mixed model may use a free-zone manufacturing entity with a mainland distributor, branch or sales company for UAE customers. A foreign brand that is not ready to build may start with contract manufacturing, toll manufacturing or private-label production through an existing UAE licensed manufacturer.
Each route has a different customs, tax, ICV, customer-contract and liability profile. The structure should be chosen from the product, customer, market and localisation plan — not from the free-zone licence alone.
- Free-zone export manufacturing — import inputs, export finished goods regionally or globally.
- Mainland domestic or GCC manufacturing — direct UAE sales, government and large-buyer supply, and GCC movement.
- Free zone plus a mainland distributor or branch — a mixed export-and-domestic model.
- Contract or toll manufacturing — a foreign brand producing through an existing licensed UAE manufacturer.
- Government or large-buyer supplier — where the In-Country Value score shapes the award.
Free zone or mainland?
The structure question turns on the market. A free-zone manufacturing company gives 100% foreign ownership, a potential 0% corporate-tax rate on qualifying income (subject to the Qualifying Free Zone Person conditions), full profit repatriation, and attractive customs treatment for imports and re-exports — best where the output is exported or sold regionally. Selling into the UAE mainland from a free zone generally triggers import duty and local customs and VAT treatment, and usually a mainland distributor or branch.
A mainland company — now able to be 100% foreign-owned for most industrial activities, subject to the specific licensed activity and any strategic-impact restrictions — sells directly across the UAE, can bid for government and large local-buyer contracts, and can move UAE-manufactured goods duty-free across the GCC. That GCC treatment is not automatic: it requires a valid certificate of origin and satisfaction of the applicable GCC national-product conditions — which include both a minimum GCC value-added threshold and a minimum level of GCC-national ownership of the producing facility — checked product by product, not simply an industrial licence. A wholly foreign-owned plant may not by itself meet the ownership condition, so the GCC position should be confirmed for the specific product and structure. The mainland entity sits within the corporate-tax system, and its import-duty treatment should be checked by input, activity and any industrial exemption or customs relief available.
A common answer is a free-zone manufacturing entity paired with a mainland branch or distributor, taking the zone's tax and customs position and the mainland's market access. The right structure depends on where the customers are — export, regional, UAE-domestic or government.
In-Country Value: procurement preference, not automatic demand
The In-Country Value programme is not a subsidy and not a guaranteed purchase order. It is a procurement preference mechanism. Government entities and major national companies use the ICV score to evaluate suppliers and channel more procurement into the UAE economy. For manufacturers selling to the public sector, national oil-company supply chains or large local buyers, a strong ICV position can materially improve competitiveness in tenders and long-term supply opportunities. It should therefore be designed into the localisation plan from the beginning, rather than treated as a certificate obtained after the factory is built.
The ICV certificate is entity- and licence-specific and is based on the certified company's audited financial statements, with its validity tied to the date of those statements — so the evidence and timing matter, and the ICV position is built into the structure rather than bolted on afterwards.
Financing, procurement opportunities and the priority sectors
Two further supports complete the picture. The Emirates Development Bank provides concessional, long-tenor financing to priority industrial sectors, lowering the cost of capital for qualifying projects, and the Make-it-in-the-Emirates programme pairs manufacturers with offtake and purchasing opportunities for locally-made products. The priority sectors the strategy targets span chemicals and petrochemicals, metals, electrical equipment and electronics, food and beverage, pharmaceuticals and medical products, rubber and plastics, machinery, hydrogen and space-linked manufacturing — a wide field in which a foreign manufacturer can find a fit. The combination of competitive finance, ICV-driven procurement preference and the free-zone tax and customs position is what makes the UAE industrial case, and the structuring task is to align all three with the specific product and market.
How a foreign company enters
The vehicle is a free-zone manufacturing company, a mainland company, both in combination, or — for a brand testing the market — a contract-manufacturing arrangement, depending on the customer. The industrial zones — KEZAD beside Khalifa Port, Dubai Industrial City, JAFZA, the Abu Dhabi industrial cities — are the usual homes, chosen for logistics, competitive power, serviced land and the relevant incentives. The entry then layers on the ICV positioning, the EDB financing application where relevant, the Make-it-in-the-Emirates offtake or procurement opportunity, and — where GCC duty-free movement is the goal — the industrial licence together with the certificate-of-origin and GCC origin requirements. Above the operating entity, groups often place a holding vehicle in ADGM or DIFC. Substance, the qualifying-free-zone-income conditions, and the customs and transfer-pricing position on inputs and intercompany flows are the recurring structural points. The structure follows the customer and the product.
Legal workstreams for a UAE manufacturing entry
A UAE manufacturing entry brings several workstreams together. The legal work usually covers:
- choosing the route — free zone, mainland, a combined structure or contract manufacturing — and the industrial zone, based on the target market;
- the free-zone licence, ownership, qualifying-income and customs position, or the mainland industrial licence and the applicable GCC origin and value-added requirements for duty-free GCC movement;
- the In-Country Value positioning and certification, designed into the localisation plan;
- the Emirates Development Bank financing and the Make-it-in-the-Emirates offtake or procurement opportunity, where relevant;
- the customs and transfer-pricing position on imported inputs and intercompany flows;
- for a contract or toll arrangement, the manufacturing, material-ownership, quality, IP and liability terms;
- the ADGM or DIFC holding structure, and substance for the qualifying-income position;
- land, lease, construction, equipment and supply-chain contracts; and
- the corridor structure where the group also manufactures in India.
The India-UAE corridor
Manufacturers frequently weigh the UAE and India together, as independent decisions. The UAE offers a free-zone base with a potential 0% rate on qualifying income, GCC and regional market access, ICV-driven procurement preference and concessional finance; India offers vast domestic demand, deep manufacturing scale and sector incentive schemes. A group can place regional, export and GCC-facing manufacturing or finishing in the UAE and scale or domestic-market manufacturing in India, structuring the holding and the cross-border flows so each market plays to its strength. The India manufacturing entry is covered on its own pages; where a group runs both, the corridor structure is designed together.
Where this goes wrong
- Choosing free zone or mainland before identifying the route and where the customers are — export, regional, UAE-domestic or government.
- Selling into the UAE mainland from a free zone without planning the import duty, VAT and the mainland-distributor requirement.
- Underweighting the In-Country Value position, which shapes government and anchor-company procurement.
- Treating the EDB financing and Make-it-in-the-Emirates offtake as automatic rather than structured and applied for.
- Assuming GCC duty-free movement is automatic, rather than checking the certificate-of-origin, value-added and GCC-ownership conditions product by product — a wholly foreign-owned plant may not by itself qualify.
- Treating the free-zone 0% as automatic for a large group, when a multinational with EUR 750 million-plus revenue now faces the 15% Domestic Minimum Top-up Tax on its UAE profits.
- Leaving the qualifying-income substance, customs and transfer-pricing position until after the plant is committed.
How ATB Corporate helps
ATB advises foreign manufacturers entering the UAE, starting from the customer and the route — free zone, mainland, a combination, or contract manufacturing — and the In-Country Value position that shapes procurement. We work the free-zone or mainland industrial licence, the ICV positioning and certification, the Emirates Development Bank financing and Make-it-in-the-Emirates offtake or procurement opportunity, the customs and transfer-pricing position, the ADGM or DIFC holding structure, and the land, construction and supply-chain contracts. For groups also manufacturing in India, the structure is designed across the India-UAE corridor. The opportunity is not the strategy headline; it is aligning the structure, the ICV position, the financing and the customs treatment with the product and the market.
Manufacturing & Industrial Investment — Answered
Operation 300bn is the UAE's national industrial strategy, run by the Ministry of Industry and Advanced Technology, aiming to roughly double the industrial sector's contribution to GDP by 2031. Make it in the Emirates is its delivery programme, pairing manufacturers with offtake and procurement opportunities, financing and enablement. Together with the In-Country Value programme and Emirates Development Bank financing, they form the UAE's industrial-investment toolkit.
Free zone for export and re-export; mainland to sell into the UAE market or bid for government work — the route and the customer decide. A free zone gives 100% ownership, attractive customs treatment for imports and re-exports, and a 0% corporate-tax rate available only to a Qualifying Free Zone Person on qualifying income (other income is taxed at 9%) — best for export and regional output. The mainland gives direct UAE-domestic and government-contract access and the potential for GCC duty-free movement where the certificate-of-origin and value-added conditions are met, within the corporate-tax system. A common structure is a free-zone manufacturing entity paired with a mainland distributor or branch.
Yes, but sales into the UAE mainland generally trigger import duty and local customs and VAT treatment, and may require a mainland distributor, branch or sales structure.
Yes. A foreign company may start with contract manufacturing, toll manufacturing, private-label production or a supply arrangement with an existing licensed UAE manufacturer before committing to a full plant.
The ICV programme scores suppliers on local manufacturing, investment and Emiratisation, and government bodies and major buyers direct procurement toward higher-scoring suppliers. It is a procurement preference, not a guaranteed order, so a strong ICV position is worth real, recurring opportunity and should be designed into the structure and localisation plan rather than treated as a compliance step.
No. But it becomes commercially important where the manufacturer sells to government entities, national oil-company supply chains or major local buyers that use ICV scoring in procurement.
No. The 0% rate applies only to qualifying income of a Qualifying Free Zone Person that meets the UAE corporate-tax conditions, including substance, transfer-pricing and audited-financial-statement requirements; non-qualifying income is taxed at 9%. Separately, a free-zone manufacturer that belongs to a multinational group with consolidated revenue of EUR 750 million or more is within the UAE's Domestic Minimum Top-up Tax from January 2025, which lifts the effective rate on its UAE profits to 15% whatever the free-zone position — so the 0% headline holds only for qualifying persons outside that large-group scope.
UAE-manufactured goods can move duty-free across the GCC, but not automatically. The manufacturer must satisfy the applicable certificate-of-origin and GCC national-product requirements — which include both a minimum GCC value-added threshold and a minimum level of GCC-national ownership of the producing facility — checked product by product. A wholly foreign-owned plant may not by itself qualify, so the position should be confirmed.
Yes. Free zones have always allowed full foreign ownership, and mainland companies can now be 100% foreign-owned for most industrial activities without a local partner, subject to the specific licensed activity. A limited set of strategic-impact activities may still require local participation, and the position should be confirmed for the specific activity.
A UAE manufacturing entry turns first on the route, free zone, mainland or corridor, with the customer deciding it; ICV is a procurement preference, not guaranteed offtake, and free-zone 0% holds only on qualifying income.
Licensing, approvals and any tax treatment are decided by the authorities on the facts. Talk to our team when you are ready.
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