Summary
To start a scrap business in Dubai, you need a trade licence with scrap or used metal trading activities, an approved yard or warehouse in an industrial area, and environmental and waste approvals if you collect, cut or process metal. Licence costs start around AED 12,500 to 25,000, but yard, equipment and export rules shape your real budget. This guide covers activities, costs, export bans, documents, mainland vs free zone and steps.
The scrap business in Dubai looks simple: buy metal low, sort it, sell it high. In practice, profit depends on three things most guides skip: the right activities on your licence, an approved yard, and knowing when export rules change. I have helped traders, recyclers and exporters with business setup in Dubai, and the ones who succeed treat scrap as a regulated industrial business, not a side trade.
Scrap Business in Dubai at a Glance
| Item | Detail |
|---|---|
| Licence | Trading licence with scrap or used metal activities, or an industrial licence for processing |
| Premises | Approved yard or warehouse in an industrial area |
| Extra approvals | Dubai Municipality waste and environmental rules, Civil Defence, and others by activity |
| Exports | Dubai Customs code, plus checks on temporary export bans |
| Ownership | 100% foreign ownership on mainland and in free zones |
| Licence cost | Around AED 12,500 to 25,000 |
| Typical first-year budget | Around AED 80,000 to 300,000+ |
Choose Your Scrap Business Model
| Model | What You Do | Typical Premises |
|---|---|---|
| Scrap trading (broker) | Buy and sell scrap without handling it locally | Office, sometimes a small yard |
| Scrap yard and collection | Collect, sort, weigh and sell scrap | Industrial yard |
| Metal recycling and processing | Cut, bale, shred or melt scrap | Industrial plot with an industrial licence |
| Import and export | Buy scrap in one market and ship it to another | Office plus port or free zone storage |
| Specialised scrap | Copper, aluminium, cans, cables, e-waste or vehicle scrap | Depends on material |
Consultant tip: Start with the model your capital can support. Many successful recyclers start as traders, build buyer contracts, then add a yard.
Scrap Licence Activities
Common activities include:
- Ferrous and non-ferrous metal scrap trading
- Used metal and scrap trading
- Aluminium and copper scrap trading
- Metal cans and scrap packaging trading
- Waste collection and transport (for collection services)
- Metal recycling and scrap processing (industrial)
If you process metal using machinery, you usually need an industrial licence rather than a pure trading licence. Collecting and moving waste or hazardous materials needs separate waste transport permits. Check current activity names on Invest in Dubai before applying.
Mainland or Free Zone for a Scrap Business?
Choose Dubai mainland if you: – Buy scrap from UAE contractors, factories and demolition sites – Run a scrap yard that collects from local suppliers – Sell to local mills and recyclers
Choose a free zone if you: – Mainly import and re-export scrap – Need port-side storage at Jebel Ali or another port zone – Want a lean trading office
Many traders also look at Sharjah and Ajman, where industrial yards are cheaper and large scrap markets already exist. Compare mainland company formation in Dubai, Sharjah mainland, Ajman mainland and RAKEZ for industrial space.
Dubai Scrap Market: Where Scrap Businesses Operate
Scrap yards and traders cluster in industrial areas such as Al Qusais, Ras Al Khor, Al Quoz and Jebel Ali, while Sharjah’s industrial areas host one of the region’s busiest scrap markets. Your yard must sit in a zone where scrap storage and processing are allowed, so confirm land use before you sign a lease.
Approvals and Compliance
- Trade licence from DET or your free zone
- Yard approval: land use, Ejari or free zone lease, and Civil Defence fire safety
- Dubai Municipality environmental and waste rules for storage, oil and chemical runoff, and waste disposal
- Waste transport permits if you collect scrap with your own trucks
- Hazardous materials rules for batteries, e-waste and contaminated scrap
- Supplier checks: keep proper invoices and ID for every seller to avoid buying stolen metal
Is selling copper legal in the UAE? Yes, through a licensed trader with proper documentation. Copper cable theft is a known risk, so licensed buyers must record where every load came from.
UAE Scrap Export Rules You Must Watch
This is the part many new exporters miss. The UAE regularly restricts scrap exports to protect local steel and metal industries:
- Ferrous scrap exports have been suspended repeatedly under Ministry of Economy directives since 2020
- Recent ministerial decisions imposed temporary four-month export bans on certain iron, aluminium and copper scrap, with exemptions only through official approval
- Copper scrap has also been subject to an export fee
What this means for you – Check the current status with the Ministry of Economy and your customs broker before signing export contracts – Build local buyers, such as UAE mills and recyclers, into your plan – Consider value-added processing that changes the product, such as ingots, which may fall outside scrap restrictions
For logistics, see our cargo business and logistics business guides.
How to Import or Export Scrap from Dubai
- Get your Dubai Customs code through Dubai Trade
- Confirm the HS code and whether any export ban or permit applies
- Prepare commercial invoice, packing list, weight certificate and inspection certificate
- Arrange pre-shipment inspection if the buyer’s country requires it, as India often does
- Load containers at your yard or a port-side facility and ship
Hazardous waste and certain scrap types need extra permits from the Ministry of Climate Change and Environment.
How to Start a Scrap Metal Business in Dubai: Step-by-Step
- Choose your model: trading, yard, processing or export.
- Pick your jurisdiction: Dubai mainland, a free zone or another emirate.
- Select activities and reserve a trade name.
- Get initial approval.
- Lease an approved yard, warehouse or office and register the Ejari.
- Get the trade or industrial licence.
- Obtain Civil Defence, environmental and waste approvals for your yard.
- Register with Dubai Customs if you import or export.
- Hire staff and process visas through our PRO services.
- Open a bank account and build supplier and buyer contracts.
Documents Required
- Passport copies and photos of shareholders and manager
- Emirates ID and visa copies for UAE residents
- Trade name reservation and initial approval
- MOA for LLCs
- Yard or warehouse lease and Ejari
- Site plan and land use confirmation
- Civil Defence and environmental approvals
- NOC from current employer, if a shareholder is employed in the UAE
Scrap Metal Business Setup Cost in Dubai
| Cost Item | Indicative Amount (AED) |
|---|---|
| Trade licence | 12,500 to 25,000 |
| Industrial licence (processing) | Higher, depending on activity |
| Yard or warehouse rent | 40,000 to 250,000+ a year |
| Weighbridge or scales | 10,000 to 80,000 |
| Cutting tools, balers and shredders | 20,000 to 500,000+ |
| Trucks or forklift | 50,000 to 200,000 (or lease) |
| Visas | 4,000 to 6,000 per person |
| Environmental and Civil Defence approvals | Depends on site |
How much does it cost to start a scrap metal business? A trading company with an office can start from around AED 30,000 to 60,000. A working scrap yard with equipment and trucks usually needs AED 150,000 to 300,000 or more. Use our business setup cost calculator for the licence side.
Is a Scrap Business Profitable?
It can be. Margins come from:
- Buying well from factories, contractors and demolition sites
- Sorting and grading carefully, because clean copper and aluminium sell at a premium
- Processing, such as baling or cutting, which adds value
- Selling to the right buyer at the right time, as prices follow global metal markets
The main risks are price swings, export restrictions, contaminated loads and unverified suppliers. Traders who keep two or three buyer channels open handle these best.
Popular Scrap Niches
- Copper and cable scrap: the highest value per tonne, but needs strict supplier checks
- Aluminium and scrap metal cans: steady supply from households, hotels and recycling drives
- Steel and iron from construction and demolition: large volumes for local mills
- Vehicle and machinery scrap: good mixed value, but oils and batteries need safe handling
- E-waste: contains copper and precious metals but needs hazardous waste approvals
- Plastic scrap trading: a separate activity that many metal traders add later
Focusing on one or two niches helps you build expertise, buyer trust and better grading.
Metal Recycling and Fabrication in the UAE
Recycling also creates related businesses: fabricating balers, conveyors and shredders, or providing industrial scrap metal recycling services to factories. These usually need an industrial or technical licence. A general trading licence suits companies that also trade machinery and spare parts.
Tax and Compliance
- Register for VAT once supplies pass AED 375,000. Exports are generally zero-rated with proper evidence
- Register for corporate tax and keep weight tickets, invoices and supplier IDs with our accounting services
- Keep your UBO records up to date
Scrap Business in Dubai FAQs
How do I start a scrap business in Dubai?
Choose your model, get a trade licence with scrap activities, lease an approved yard or office, obtain environmental and Civil Defence approvals and register with Dubai Customs if you export.
How much does a scrap licence cost in Dubai?
Around AED 12,500 to 25,000 for the licence. A full yard setup can cost AED 150,000 to 300,000 or more.
Can I export scrap metal from the UAE?
Sometimes. The UAE periodically bans exports of certain ferrous, aluminium and copper scrap. Check the current rules before signing contracts.
Do I need an industrial licence for scrap?
Only if you process scrap with machinery. Pure trading uses a trading licence.
Can I run a scrap business from a free zone?
Yes, for import and re-export. Local collection and yards usually suit the mainland.
Is the scrap business profitable in Dubai?
Yes, for traders who buy well, grade carefully and keep several buyer channels.
Is selling copper scrap legal?
Yes, through a licensed trader that documents every supplier and load.
Start Your Scrap Business With DIAC
DIAC chooses the right activities and jurisdiction, secures approvals for your yard, registers you with customs and supports your corporate bank account opening. Book a free consultation for an exact quote.
About the Author
Official sources
Check current fees, rules and forms with the issuing authority before you apply. Each link opens the authority’s own website.
