Dubai generates over 22 million tons of waste every year. The government wants 75% of it diverted from landfills by 2030. This isn’t just an environmental goal,it’s created a real business opportunity in the recycling industry, particularly in metal scrap.
The numbers back it up. The UAE stainless steel scrap market will grow from $5.2 billion in 2025 to $9.1 billion by 2031. Dubai produces 200 tonnes of scrap metal daily with an 85% recycling rate. The material is there. The systems are there. What’s needed are business operations to collect, process, and sell it.
The UAE exported $113.3 million in stainless steel scrap in 2023, mostly to India, Thailand, Pakistan, and South Korea. These are real markets with consistent buyers and growing demand for metal scrap.
Starting a business in this sector is manageable AED 10,000 to AED 30,000, depending on your license and setup. You don’t need massive capital. You need to understand the market, get the right business licenses, and build relationships with suppliers and buyers.
Riz & Mona Consultancy helps entrepreneurs with metal scrap trading business setup and licensing in Dubai.
Benefits of Starting a Scrap Metal Recycling Business in Dubai
Types of Scrap Business Models
Import scrap metal from international markets and sell to UAE buyers.
Who buys from you:
- Construction companies needing recycled steel and aluminum
- Manufacturing facilities requiring raw materials
- Local processing plants and foundries
What you need:
- Import/export authorization
- Warehouse near Jebel Ali Port or other major ports
- Quality control system for inspecting materials
- Relationships with international suppliers (Europe, USA, China)
Buy scrap from UAE sources and export to international buyers.
Where the scrap comes from:
- Construction and demolition sites
- Manufacturing factory waste
- End-of-life vehicles and auto parts
- Oil & gas and petrochemical facilities
- Commercial electronics and appliances
Where it goes:
- India takes 77% of UAE stainless steel scrap exports
- China, Turkey, Thailand, and Pakistan buy the rest
- UAE exported $113.3 million in stainless steel scrap in 2023
What you need:
- Collection network across Dubai and surrounding emirates
- Export documentation (bill of lading, commercial invoice, certificate of origin)
- Freight forwarding relationships
- Understanding of quality standards for each importing country
Buy raw scrap, process it into higher-value material, then sell.
Processing services you can offer:
- Shredding and granulating
- Separating ferrous from non-ferrous metals
- Removing contamination
- Converting scrap into ingots
What you need:
- Processing equipment (shredders, metal separators, melting furnaces)
- Material handling equipment (forklifts, conveyor systems, weighing scales)
- Safety and environmental controls
- Quality testing systems
- Higher initial capital investment
Instead of handling all metals, you can focus on one type:
Aluminum: Uses 92% less energy to recycle. High demand from construction, aerospace, and automotive industries.
Copper: Premium pricing due to excellent conductivity. Used in electrical wiring, industrial components, and plumbing.
Steel and Stainless Steel: Construction projects drive massive demand. Various grades with different values.
Brass and Other Non-Ferrous Metals: Specialized markets in manufacturing, automotive, and electronics.
Specializing lets you develop deeper expertise, better supplier relationships, and command better prices. You become the go-to person for that specific metal type.
8 Steps to Start a Scrap Metal Recycling Business in Dubai, UAE
Choose Business Activity & License Type
Select from DED-approved activities:
- Scrap & Metal Waste Trading
- Metal Recycling Services
- Waste Management
- Import/Export of Scrap Materials
Pick your license:
- Commercial Trade License: For buying and selling (AED 10,000-28,000)
- Industrial License: For processing and recycling operations
- Professional License: For consulting services (if applicable)
Select Legal Structure
Limited Liability Company (LLC):
- Most popular for foreign investors
- 100% foreign ownership allowed
- 2-50 shareholders
- Liability limited to capital investment
Sole Establishment:
- Single owner
- Simple structure
- Limited business scope
Mainland vs. Free Zone:
- Mainland: Trade anywhere in UAE, eligible for government contracts
- Free Zone (JAFZA, DMCC): 100% ownership guaranteed, tax benefits, limited local market access
Reserve Your Company Name
Use DED portal or Invest in Dubai platform:
- Check name availability
- Must include legal structure suffix (LLC, etc.)
- No offensive, religious, or political references
- Fee: AED 350 (standard) or AED 2,000 (special/numerical names)
- Valid for 6 months
Get Initial Approval
Submit through DED online portal:
- Fee: AED 120 total
- Processing time: 10 minutes to few working days
- Valid for 120 days to complete licensing
Required documents:
- Passport copies and Emirates ID
- Valid UAE visa
- Business plan
- Ownership structure details
Lease Facility & Complete Ejari
Lease Requirements:
- Industrial zone location near ports
- Adequate warehouse/processing space
- Meets zoning and environmental standards
Ejari Registration:
- Mandatory for all commercial leases in Dubai
- Submit via Dubai REST app, Dubai Now app, or DLD website
- Fee: AED 206 plus VAT
- Processing: 1-2 working days
Prepare Required Documents
Corporate Documents:
- Memorandum of Association (MOA): Company structure and ownership details
- Articles of Association: Internal governance and management structure
- Shareholders Agreement: Rights and obligations of partners
- Power of Attorney: If using representatives or agents
Compliance Documents:
- Business Plan: Comprehensive operational strategy
- Environmental Assessment: If handling hazardous materials
- Safety Protocols: Workplace safety and emergency procedures
- Insurance Documentation: Liability and property coverage
Personal Documentation:
- Passport Copies: All shareholders and managers
- Emirates ID: Valid identification for UAE residents
- Visa Documentation: UAE residence visa for expatriates
- Photographs: Passport-size photos for applications
External Approvals:
- Environmental Permits: From Dubai Municipality if required
- Industry-Specific Approvals: Waste management permits
- Association Membership: Scrap Metal Association of Dubai
Obtain Trade License and Required Permits
Submit final application to DED with:
- All prepared legal documents
- External approvals
- License fees payment
Additional permits (covered in detail in Legal Requirements section):
- Environmental License
- Waste Management Permit
- Transportation Permits
- Import/Export Authorization
Set Up Operations
Equipment:
- Forklifts and material handling equipment
- Weighing scales and truck scales
- Metal sorting bins
- Safety and fire protection systems
- Processing machinery (if applicable)
Facility Setup:
- Segregated storage areas for different metals
- Safety systems installation
- Utility connections
Staffing:
- Hire laborers, drivers, administrator
- Process work permits and visas
- Conduct safety training
Launch:
- Build supplier network
- Establish buyer relationships
- Implement tracking and compliance systems
Start Your Scrap Metal Recycling Business in the UAE
Legal Requirements & Licensing for a Scrap Metal Recycling Business in Dubai, UAE
1. Trade License (AED 10,000 – 30,000)
Commercial trade license is required for buying and selling scrap metal, while an industrial license is mandatory for recycling and processing activities.
Issued by the Department of Economic Development (DED) based on business activity.
2. Environmental License
Mandatory for all businesses handling, processing, storing, or recycling scrap metal.
Issued through environmental authorities via DED — operation is not permitted without this license.
3. Waste Management Permit
Issued by Dubai Municipality for collection, sorting, processing, and disposal operations.
Must be renewed annually and requires mandatory facility inspections.
4. Transportation Permit
Required for transporting scrap metal within Dubai.
Vehicles must have Dubai Municipality–approved GPS tracking, and a separate permit is needed for cross-border transport.
5. Import/Export Authorization
Mandatory for international scrap trading.
Includes Dubai Municipality approval, Ministry of Economy certificates for steel scrap, and compliance with UAE and destination country standards.
Authorization Rules
Operations cannot import or export scrap without Dubai Municipality authorization.
Processing is only allowed at DM-approved facilities, applicable across mainland and free zones.
Record Keeping
Non-hazardous waste records must be maintained for 2 years, hazardous waste for 5 years.
All records are subject to Dubai Municipality audits.
Vehicle Tracking
GPS tracking is mandatory for all vehicles transporting scrap.
Specific approved routes may be required, and documentation must be maintained for every load transported.
Dubai Municipality Penalties
Fines up to AED 500,000 per violation, with double penalties for repeat offenders within one year.
Additional consequences include:
-
Suspension of operations for up to 3 months
-
Facility closure
-
Utility disconnection
Federal-Level Penalties
Companies: Up to AED 1,000,000
Individuals: Up to AED 30,000
Illegal waste abandonment: AED 3,000
Negligence by organizers: AED 5,000–50,000
Businesses must also secure:
- Dubai Chamber of Commerce registration
- Health & safety permits
- Fire protection systems and emergency plans
- Full PPE (Personal Protective Equipment) for workers
- Scrap Metal Association membership (required in some cases)
Both mainland and free zone companies must comply with Law No. 18 of 2024 and obtain the same environmental and waste permits.
Free Zone Options (JAFZA, DMCC)
-
100% foreign ownership
-
Tax advantages
-
Full compliance with environmental regulations still mandatory
Mainland Setup
Direct UAE market access
May require local sponsor depending on activities
Same environmental and waste management compliance as free zones
Startup Cost Comparison for Scrap Businesses in Dubai
Below is a quick comparison of startup costs for small, medium, and large-scale scrap businesses.
| Category | Small Scale | Medium Scale | Large Scale |
|---|---|---|---|
| Setup & Licensing | AED 15,000–30,000 | AED 25,000–40,000 | AED 40,000–60,000 |
| Facility (Year 1) | AED 15,000–50,000 | AED 50,000–200,000 | AED 400,000–1,000,000 |
| Equipment | AED 20,000–50,000 | AED 50,000–150,000 | AED 200,000–500,000+ |
| Working Capital | AED 20,000–50,000 | AED 50,000–100,000 | AED 100,000–200,000+ |
| Transportation | AED 10,000–30,000 | AED 30,000–80,000 | AED 80,000–150,000+ |
| Total Estimated Cost | AED 80,000–210,000 | AED 205,000–570,000 | AED 820,000–1,910,000+ |
Additional Investment Details for Scrap Business in Dubai
Below is a combined overview of business model costs, key equipment expenses, and recurring operational costs.
| Category | Cost Range / Details |
|---|---|
| Import/Export Trading Setup | AED 80,000–150,000 |
| Local Collection & Export Setup | AED 150,000–300,000 |
| Full Processing Facility Setup | AED 300,000–500,000+ |
| Weighing Scales | AED 5,000–15,000 (platform), AED 30,000–100,000 (truck scale) |
| Forklifts | AED 15,000–50,000 |
| Shredders | AED 3,570–7,760 (basic), USD 12,800+ (industrial) |
| Sorting Bins & Safety Gear | AED 8,000–25,000 |
| Monthly Operating Costs | AED 8,600–29,000 (utilities, staff, vehicles, maintenance) |
FAQS (Frequently Asked Questions)
What Insurance Coverage Do I Need for My Scrap Metal Business?
Essential coverage includes liability insurance, property insurance, workers’ compensation (mandatory), fire and safety insurance, equipment insurance, and environmental liability. Budget AED 10,000-25,000 annually and ensure coverage meets Dubai Municipality safety requirements.
What Are My VAT and Tax Obligations for Scrap Metal Trading?
5% VAT applies to most transactions; registration mandatory if turnover exceeds AED 375,000. New export taxes (2024): AED 400/tonne for ferrous and copper scrap, AED 100/tonne for aluminum. Exports to most destinations are zero-rated for VAT.
What Payment Terms Are Standard in the Scrap Metal Industry?
Net 30-90 days for established B2B relationships; 60% advance payment common for new suppliers/exporters. Letter of Credit preferred for international transactions; cash on delivery for smaller local deals.
What Staff Visa and Work Permit Requirements Apply?
Standard work visa (2-year) requires medical clearance, employment contract, and Ministry of Labor approval. Budget AED 5,000-8,000 per employee for visa processing. Free zones allow 1 foreign worker per 12.5 sqm office space.
How Do I Ensure Environmental Compliance and Handle Audits?
Maintain detailed waste tracking records, conduct quarterly self-audits, keep all permits current, and train staff regularly. Dubai Municipality conducts regular inspections checking documentation, safety protocols, equipment compliance, and licensing status.
What Inventory Management Systems Are Recommended for Scrap Metal Operations?
Use cloud-based systems with real-time tracking, barcode/RFID integration, and Dubai Municipality compliance reporting. Local providers include Fintegra Solutions, Axolon ERP, and RLS Technologies. Budget AED 10,000-50,000 depending on scale.
