Starting a scrap metal venture in Dubai can be a smart move. The city builds, renovates, imports, and exports at scale. That creates a steady flow of scrap metals—ferrous and non-ferrous—that smart operators can collect, sort, process, and trade locally and internationally. This guide walks you through how to launch and run the business the right way: structure, licenses, permits, yard setup, equipment, sourcing, pricing, staffing, compliance, and growth.
Why Dubai Is a Strong Market for Scrap Metal
Dubai’s economy moves fast. Construction, manufacturing, logistics, and consumer electronics all feed a large scrap stream. Ports and free zones make exports simple. Buyers across Asia, Africa, and Europe want a steady supply. That mix means real demand—and room for new players who operate cleanly and professionally.
Demand Drivers You Can Count On
Large projects, constant refurbishments, and a vibrant auto sector produce steel, copper, aluminum, brass, lead, and e-waste. Warehouses, hotels, malls, and residential towers upgrade regularly, releasing scrap in cycles. Even when one sector slows, others keep the flow going.
Who Buys Your Scrap?
Your buyers are local foundries, metal fabricators, cable manufacturers, traders, and global smelters. Many prefer regular lots with consistent quality and clear paperwork. If you can grade well and ship on time, you can build repeat orders quickly.
Choose a Business Model That Fits You
Before you register, decide how you will make money. Your model guides your license, yard, equipment, and cash flow needs.
Collection & Aggregation
You collect scrap from contractors, facilities, and small dealers. You sort, grade, and flip to bigger traders or mills. Lower capex, faster turnover, but thinner margins unless you buy well and move volume.
Trading & Brokering
You match sellers and buyers and earn a margin—minimal equipment. You need trust, quality control, airtight contracts, and logistics control. Perfect if you have relationships and can manage risk.
Processing & Light Recycling
You invest in a yard with cutting, baling, and shearing to upgrade material: better prices, but higher capex, stricter permits, and stronger HSE controls.
Export-Focused Operations
You source in the UAE and ship to overseas smelters. You need strong grading, export compliance, Dubai Customs codes, and reliable freight partners. Margins can be strong on steady lanes.
Mainland vs Free Zone: Which is Better to Start a Scrap Business in Dubai
This is your first big decision. Both paths work. Choose based on how and where you’ll operate.
Mainland Company (Dubai)
Good if you will collect from across the city, run trucks, and sign with government entities or big contractors. You’ll obtain a commercial trade license through Dubai’s Department of Economy & Tourism (DET), line up Dubai Municipality approvals for waste handling (where applicable), and meet HSE requirements at your yard. You can sell to any UAE customer.
Free Zone Company (JAFZA, DMCC, DAFZA & others)
Ideal for trading and exporting. Free zones offer fast setup, 100% foreign ownership, and built-in customs channels. Many allow warehousing and value-added processing (with permits). If you plan to export most of your material, a free zone can simplify customs and logistics.
Pros and Cons at a Glance
Mainland: broader local access, easier municipal tenders, direct B2B pickups; more city-level permits and inspections.
Free zone: frictionless exports, customs advantages, modern warehouses; onshore sales may need a distributor or extra steps depending on the free zone rules.
Scrap Metal Business Setup in Dubai: Activities, Licenses & Permits
Get your activity right. It drives the approvals you’ll need.
Pick the Correct Activity Names
You’ll choose one or more activities such as metal scrap trading, waste collection (non-hazardous), or material recovery. Picking the wrong activity delays approvals and insurance.
Environmental & Waste Approvals
If you collect or process scrap, expect conditions from Dubai Municipality (Waste Management), free zone environment departments (e.g., EHS-Trakhees in JAFZA), and possibly MOCCAE for specific streams. Processing (cutting, shearing, baling) will trigger more detailed HSE and environmental controls.
Transport Permits
If you run your own pickups, you may need waste transport permissions and compliant vehicles. Keep manifests for every movement. Many contractors will ask for proof of proper disposal or recovery.
Customs & HS Codes
Register with Dubai Customs if you import/export. Learn HS codes for your grades (e.g., Copper, Aluminum, Stainless, HMS, etc.): codes impact duties, inspections, and documentary rules.
Ownership Structure, Capital & Partnering
Choose a structure that fits your plan and banking threshold.
Common Structures
Single-owner, multi-shareholder LLC, or free zone entity. Keep the cap table simple early on. Add partners only if they add sourcing, buyers, or capital.
Capital Planning
You need working capital to buy materials, pay for trucks, and hold inventory. Trading requires more cash for quick buys; brokering needs less. Processing adds capex—yard rent, machinery, power, and safety systems.
Bank Accounts & Payment Terms
Open a robust business account. Many sellers prefer immediate or same-day payments. Buyers often pay on delivery or within short terms, so bridge the gap. Consider escrow for new counterparties.
Step-by-Step Process to Start a Scrap Metal Business in Dubai
Here’s a simple, no-fluff checklist from idea to first load.
Step 1: Define Model & Activity
Decide your model (collect, trade, process, export). Choose the exact license activities that match what you’ll do from day one.
Step 2: Mainland or Free Zone
Pick your jurisdiction. If you will export and warehouse inside a zone, a free zone helps. If you will pick up across the city and sell locally, Mainland fits.
Step 3: Name & License Application
Reserve your trade name. Submit license application with activity list, shareholder details, and leased address (office and/or warehouse). Align the warehouse purpose with your activities.
Step 4: Environmental & HSE Plans
Prepare yard layout, spill control, firefighting plan, storage areas, and PPE policy. If you process, include machine specs and dust/noise control.
Step 5: Warehouse & Equipment
Sign a compliant warehouse/yard with power and access roads. Order weighbridge or platform scales, forklifts, magnets, shears, balers (if needed), bins, and safety gear.
Step 6: Customs & Logistics Setup
Register with Dubai Customs (and the free zone customs if applicable). Set up accounts with haulers, freight forwarders, and container yards. Test your documentation flow.
Step 7: Supplier & Buyer Lists
Lock in at least 5–10 suppliers (contractors, MEP firms, maintenance firms, small dealers). Confirm 2–3 reliable buyers per metal category to avoid single-buyer risk.
Step 8: SOPs & Paperwork
Create grading SOPs, inbound/outbound checklists, manifests, and sales contracts with clear incoterms—train staff on safety and documentation.
Step 9: Insurance & Compliance
Get basic liability cover and property insurance. If you run trucks or handle higher-risk materials, widen coverage.
Step 10: First Purchases & Trial Loads
Start small. Buy, grade, flip. Track every step. Improve your grading tables and pricing formulas with each lot.
Approvals, Timelines & Typical Costs
Every setup is different, but plan for several buckets of spend.
Government Fees & Approvals (Ranges)
Trade license, name reservation, initial approvals, establishment card, and immigration files vary by Mainland or free zone. Free zones bundle many items; the Mainland adds municipal and external approvals. Processing activities usually add environment/HSE reviews.
Facility & Equipment
Warehouse renting, yard fit-out, racking, bins, scales, forklifts, cutting tools, baler/shear (if used), fire systems, CCTV, and signage. Don’t forget power upgrades where needed.
Vehicles & Logistics
Own trucks or contract them. Owning gives control, but adds capex and permits. Contracting is flexible at the start.
Timelines
Simple trading in a free zone can be quick once documents and KYC are clean. Adding processing, large yards, and transport permissions adds weeks for inspections and safety sign-offs. Plan carefully and don’t pre-book shipments until you have the proper permits in hand.
Yard & Warehouse Requirements That Matter
Your yard is your engine. Design it to move material safely and fast.
Layout & Flow
Separate inbound, sorting, processing, storage, and outbound. Keep pedestrian and forklift paths clear. Install a platform scale near the inbound. Use bins and color codes for grades.
Safety & Environmental Controls
Place spill kits near oil-bearing scrap. Use concrete floors where you cut or shear: control dust and noise. Maintain clear firefighting access and tested extinguishers. Post PPE rules and enforce them.
Equipment You Actually Use
Start lean. Add machines when volume justifies them.
Must-Haves
Platform scale or weighbridge, pallet jacks, bins, heavy-duty magnets, labeling system, PPE (gloves, helmets, goggles, boots, hi-vis vests), and basic cutting tools.
Nice-to-Haves for Upgrading
Forklifts or skid steers, alligator shears for downsizing, cable strippers, drum lifters, and a small baler. These help you raise your selling price by improving density and purity.
Sourcing: How to Keep Scrap Coming
Strong supply wins this game. Build a mixed pipeline so one source never controls you.
Contractor & Facility Contracts
Offer scheduled pickups and clearance for contractors, MEP firms, facility managers, hotels, malls, and warehouses. Promise quick payment and clean sites. Word spreads.
Small Dealers & Walk-ins
Treat small dealers well. Pay fairly, weigh transparently, and pay on time. They’ll bring steady volume.
Auctions & Decommissioning
Bid for decommissioning jobs (elevators, chillers, panels). These need site safety and cutting plans, but can be very profitable.
Grading & Quality Control
Better grading = better prices. Learn the standards used by buyers.
Use Clear Grade Names
Follow common trade language (e.g., ISRI categories) to avoid disputes. Keep printed cheat sheets in the yard.
Testing & Contamination
Use magnets, spark tests, and handheld analyzers if needed for high-value alloys. Remove contaminants (plastic, rubber, oil) to upgrade lots.
Pricing, Hedging & How to Quote
Scrap prices track global metal prices and local demand.
Link to Market Benchmarks
Use published references and buyer sheets. Align your quotes to LME trends for copper, aluminum, nickel (stainless), and steel. Don’t chase every tick—focus on average levels over a week unless you trade daily.
Protect Your Margin
Quote with tolerances on weight, moisture, and impurities. Add a buffer for sorting and shrinkage. For larger lots, consider fixed vs formula pricing to reduce risk.
Logistics That Don’t Break
Freight, timing, and documents decide your profit on export.
Local Moves
Use tarps or containers to avoid losses and mix-ups. Time your pickups when suppliers finish shifts. Keep spare bins ready.
Export Moves
Book containers early. Keep your HS codes, invoices, packing lists, certificates of origin, and any environment-related papers clean and consistent. Delays eat margins fast.
Team & Roles You Need
You don’t need a big team to start, but each role must be clear.
Core Roles
Operations lead (yard), buyer/grader, sales/trader, documentation/admin, and a driver or logistics coordinator. Train everyone on safety and how to stop work if something looks unsafe.
Training & Culture
Pay on time. Reward quality and safe behavior. Keep short stand-ups to plan loads and review incidents.
Compliance, Records & Audits
Scrap is regulated because it can harm the environment if poorly handled. Clean records protect you.
Keep These Records
Supplier KYC, manifests, inbound weights, photos of lots, grading notes, outbound weights, contracts, invoices, and transport papers. Store digitally and back them up.
Routine Checks
Audit your PPE use, fire equipment, spill control, and machine guards every month. Fix gaps quickly and record the fixes.
Numbers That Make Sense (Simple Unit Economics)
Margins are thin if you guess. Measure everything.
Basic Formula
Gross margin = selling price per ton – (purchase price per ton + transport + processing + losses).
Aim for repeatable margins, not one-off wins. Track by grade and supplier to spot leaks.
Cash Flow
You pay suppliers fast; buyers may take days. Keep a cash buffer. Consider invoice financing only when you have steady, clean paperwork and repeat buyers.
Marketing That Actually Works
This industry still respects relationships, but smart digital presence helps.
Build Trust Online
A simple website, a clear list of accepted materials, yard photos, licenses, and contact info. Keep Google Business Profile updated with hours and location. Post short updates when you add equipment or accept new grades.
Outreach That Wins Contracts
Visit industrial areas. Knock on the facility manager’s doors. Bring a one-page flyer with your services, bins, response time, and payment terms. Follow up politely and consistently.
Risk Management You’ll Be Glad You Did
Plan for what can go wrong—and reduce the odds.
Material & Payment Risk
Verify supplier identity. Don’t prepay new suppliers. For new overseas buyers, use deposits, letters of credit, or escrow.
Safety & Environment
A single accident can stop operations. Train, supervise, and enforce PPE. Keep your yard tidy. Store oils and batteries in the proper containers away from drains.
Price Volatility
Don’t hold speculative inventory unless you can afford to. Move material weekly at the start. If you hedge, know the rules and costs.
Common Mistakes to Avoid
Learn from others so you don’t pay the tuition fee.
Vague Activity Selection
Pick precise activities that match what you’ll do now, not “someday.” Changing later can delay operations.
Under-estimating Yard Needs
Tight yards get messy and unsafe. Leave space for growth and proper traffic flow.
Skipping Documentation
Handshake deals end in disputes. Use simple, clear contracts and manifests for every load.
Overpaying for Scrap
Do not buy on emotion. If in doubt, grade down and price for the lower grade—or walk away.
Growth Roadmap for Year 1–3
Think in stages. Nail quality first, then scale.
Year 1: Discipline & Data
Build a supplier base, set strict grading, and move inventory fast. Document everything.
Year 2: Upgrade & Export
Add a baler or shear if volume justifies it. Open export lanes to 2–3 countries. Hire sales support.
Year 3: Diversify & Defend
Add new grades (stainless, cables, motors). Consider e-waste with proper permits. Lock in long-term supply contracts and service level agreements.
Scrap Business in Dubai: Real-World Tips
- Pay fast and fairly—suppliers will stick with you.
- Keep grading honestly—buyers will pay you better.
- Stay neat—clean yards impress inspectors and customers.
- Know your numbers—profit hides in the details.
Scrap Metal Business Setup in Dubai: Documents You’ll Commonly Prepare
- Trade license, establishment card, and IDs
- Tenancy contracts (office/warehouse)
- Environmental approvals and HSE plans
- Insurance certificates
- Supplier contracts and KYC
- Manifests, inbound/outbound weight slips
- Invoices, packing lists, COOs, customs docs for export
Conclusion
If you plan carefully, keep operations clean, and protect your margins, a scrap metal business in Dubai can grow fast and stay resilient through cycles. Start with a clear model, choose the proper jurisdiction, get the correct permits, and build trust on both the buy and sell sides. Do the basics well every day, and scale in stages—business Setup in Dubai.
FAQs
Is a mainland or a free zone better for a new scrap metal company?
Both work. If you will pick up material across Dubai and sell locally, the Mainland is often simpler for on-ground operations. If you aim to trade and export, a free zone can streamline customs and warehousing.
Do I need environmental approvals to trade scrap?
Pure trading with no storage or processing may require fewer approvals, but the moment you store, sort, cut, or bale material, expect environmental and HSE conditions from the relevant authority. Always confirm the requirements for your exact activities.
What size yard should I start with?
Many startups begin with 3,000–10,000 sq ft, depending on volume and whether they process or only aggregate. Leave room for trucks to turn, safe pedestrian paths, and separate storage by grade.
What equipment is essential on day one?
A reliable platform scale, pallets/bins, basic cutting tools, magnets, PPE, and a forklift (or contracted lifting) will cover most early needs. Add shears and balers once volume supports the spend.
How do I price scrap metal each week?
Use buyer sheets and watch global benchmarks for copper, aluminum, stainless, and steel. Quote with precise grade specs, moisture/impurity limits, and weight tolerances. Protect the margin with a buffer.
Can I export from mainland Dubai?
Yes, if you register with Dubai Customs and follow export rules. Free zones can make exports smoother, but mainland entities export regularly with proper documentation.
What are the biggest risks?
Overpaying for material, poor grading, safety incidents, and export delays. Reduce them with strict SOPs, training, fair contracts, and disciplined inventory turnover.
How fast can I launch?
Simple trading structures can go live relatively quickly once KYC and tenancy are ready. Processing yards take longer due to environmental and HSE steps. Plan timelines conservatively and sequence your spend.
Do I need my own trucks?
Not at first. Many operators use contract haulers to stay flexible. If you win regular pickups and routes, owning trucks can improve control—but it adds permits and maintenance.
How do I build a steady supply?
Offer fast payment, transparent weighing, and clean site service. Visit contractors and facility managers, keep promises, and communicate clearly. Good operators rarely run short of scrap.
