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Start a Scrap or Metal Trading Business in the UAE – [2023 Guide]

As one of the world’s top destinations for international trade and commerce, the United Arab Emirates’ construction, infrastructure, and industrial sectors are rapidly growing. This leads to an increased demand for metals and scraps in the Emirate.

The UAE is even among the top ten largest ferrous scrap importers in the world, making it one of the most profitable business opportunities in the MENA region.

If you want to take advantage of the UAE’s scrap and metal industry and start a business, then this article may be of help. Below, we will discuss the following topics: 

  • What is scrap or metal trading?
  • Why start a scrap or metal trading business in the UAE?
  • Benefits of starting a scrap or metal trading business in the UAE
  • Steps in starting a scrap or metal trading business in the UAE
  • Cost of starting scrap or metal trading business in the UAE
  • How Creative Zone can help?

What is scrap or metal trading?

In the UAE, scrap and metal trading involves buying and selling ferrous and non-ferrous metals, such as copper, aluminum, steel, and scrap metal, which can be used for manufacturing, recycling, and other purposes. The trade is typically facilitated by metal traders, who serve as intermediaries between buyers and sellers.

Why start a scrap or metal trading business in the UAE?

Home to several large metal trading companies and ports, the UAE boasts some of the world’s highest scrap and metal prices, making it a lucrative business. Additionally, the Emirate’s status as a global hub for international trade and commerce ensures that scrap and metal trading is a sound investment for both local and foreign entrepreneurs.

Benefits of starting a scrap or metal trading business in the UAE

Starting a scrap or metal trading business in the UAE not only gives you access to local and international markets but also offers the following advantages:

Low-risk investment: The durability of scrap metal makes the industry immune to market fluctuations, thus making it an appealing option for startups.

High Demand: Scrap and metal have a high resale value in the UAE, which is a positive sign of the market’s profitability.

Diverse Resources: The UAE is well-known for its abundant mineral resources, including copper, aluminum, and steel. These resources are easily accessible and tradable.

International Markets: The UAE has strong trade links with countries in the West and Europe, allowing businesses to source scrap metals and other materials from around the world.

Low Taxes: Doing business in Abu Dhabi gives your access to a favorable tax environment, making it easier to generate profits and reinvest in the business.

Steps in starting a scrap or metal trading business in the UAE

The steps in starting a scrap or metal trading business in the UAE typically involves a few steps. With the help of our business experts from Creative Zone, we will guide you throughout the following process:

Step 1: Research the market

Before anything else, you must first research what type of scrap and metal has a high demand in the UAE. This will help you define the type of business activity your company will offer.

Your services might range from being a service provider or supplier to a recycling company to importing and exporting scrap for trading.

Step 2: Register your business

After conducting your research, you can now start the process of registering your business. First, you must obtain a trade license and necessary permits from the Department of Economic Development (DED). Your trade license will be issued after the successful registration of your business.

Step 3: Choose a business structure

Once you have obtained the trade license, you need to decide on the type of business structure best suited for your company. The most common structures that are permitted in the UAE are:

  • Sole proprietorship.
  • Limited liability company (LLC).
  • A branch of a foreign company.
  • Public joint stock company.

Our business experts from Creative zone can assist you with this to ensure you choose the most appropriate legal structure for your business.

Step 4: Look for reliable suppliers

Once you select a location, you must find reliable suppliers and customers. Establishing good relationships with your suppliers is important as this will ensure a steady supply of raw materials and a steady demand for your products.

Step 5: Set up a warehouse

After deciding on the business structure, you need to lease or purchase a warehouse facility for storing and processing scrap and metal. The best locations are those that are close to your suppliers and potential customers.

Step 6. Invest in Equipment

Depending on the type of scrap or metal you are trading, you may need to invest in equipment such as cutting machines, weighing machines, and other tools.

Step 7: Get an insurance

Getting insurance is highly recommended when operating a scrap or metal trading business. Having insurance can protect your business against potential risks and losses. Some types of insurance that a scrap or metal trading business might consider include liability insurance, property insurance, and workers’ compensation insurance.

It is advisable to consult with business consultancy firms, like Creative Zone, to determine the best coverage for your business’s specific needs.

Cost of starting a scrap or metal trading business in the UAE

The cost of starting a scrap or metal trading business in the UAE will depend on the size and scope of your business. Generally, the start-up costs include registering the business, obtaining the necessary permits, and leasing or purchasing an office space. This may range from AED 10,000- AED 30,000.

However, this doesn’t include costs for hiring staff, advertising, marketing, and other related expenses.

To get a cost estimate for your business, you may contact one of our company formation specialists to help you. Once we know more details, we will provide you with a breakdown of the expenses you need upon setting up your business.

How Creative Zone can help?

Starting a scrap or metal trading business is relatively easy especially when you have guidance from a reliable company formation specialist like Creative Zone. Our team of experts will assist you, from registering your business, to choosing the most suitable location for your company. Get in touch on 800-LICENCE (5423673) to speak with one of our business professionals today.

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