Industrial Machinery and Equipment Trading Company Setup in Dubai (2026): Licence Codes, Import Rules, Tax and Cost

A machinery trading licence in Dubai is not one licence. The Dubai Department of Economy and Tourism (DET) files machinery under at least nine separate trading activities, and the register splits them in a way that catches dealers out: the new-equipment activities say the firm may install, repair and maintain what it sells, while the two used-equipment activities say nothing of the kind [1]. A used-excavator dealer with a workshop in the yard can be trading on the right code and repairing on no code at all.

The tax position is just as specific. Ministerial Decision No. 229 of 2025 does not list machinery among the Qualifying Commodities, so the only free zone route to the 0% rate is distribution from a Designated Zone, and that route depends on who the buyer is and what the buyer does with the machine [2]. The conformity position surprises people in the other direction: the federal list of regulated products has no row for excavators, cranes, forklifts, compressors or CNC machines, although it does catch lifts, low-voltage electrical equipment and several other classes a machinery trader handles [3].

Since 2013, BusinessDubai.ae has set up trading companies on the Dubai mainland and across the UAE's free zones. This guide covers the exact activity codes for new and used machinery, the repair clause, an itemised cost table, conformity and customs approvals, duty and re-export, export control, where yards sit, the corporate tax split by buyer type, and VAT on used machines. Last Updated: October 2026.

Which licence and activity codes does a machinery trader need in Dubai?

A machinery trader in Dubai needs a Commercial licence carrying the DET activity that matches each class of machine it sells, because DET has no single machinery trading code. Construction Equipment & Machinery Trading is 4773703, Used Heavy Equipment & Machinery Trading is 4774007, and generators, pumps, forklifts and workshop machines each sit under their own code [1].

The table lists the nine trading activities a machinery business is most likely to need, plus two separate activities that are not trading. Codes and names come from the Dubai Department of Economy and Tourism, business activity list as recorded in a public copy of the register [1].

Repair and rental are Professional activities, not Commercial ones, so neither comes with a trading code. The register copy read for this guide carries last-updated dates from 2023, so confirm each code on the live DET list when you apply.

Is there a Dubai activity code for machine tools and CNC machines?

The DET register has no activity named for machine tools, CNC machines or metalworking machinery. The nearest fit is 4773601, Workshop Equipment, Machinery & Spare Parts Trading, whose description covers workshop cutting, welding and lathe equipment [1].

Pro Tip: Match each product line to a code before you apply. A dealer selling generators, compressors and forklifts needs three activities (4773504, 4773503 and 4773706), not one. BusinessDubai.ae's packages include three activities at Meydan Free Zone, IFZA, Dubai South and Expo City, and ten at RAKEZ and Ajman Free Zone [19].

Which activities sit outside trading?

The register also carries narrower trading codes, such as Construction Equipment & Machinery Spare Parts Trading (4773615) and Agricultural Tractors & Machinery Trading (4773714), and files on-road trucks separately [1]. Assembling or rebuilding machines is manufacturing in the register: Machinery Assembling (2824012) is an Industrial licence activity [1]. Our steel fabrication company guide covers the industrial licence route, and medical devices follow a separate regulatory chain set out in our medical equipment trading company guide.

What is the difference between the new-equipment and used-equipment codes in Dubai?

The difference is the repair clause. The DET descriptions of the new-equipment trading codes, including 4773703, 4773602, 4773601, 4773504, 4773503 and 4773706, allow installation, repair and maintenance of the equipment the firm deals in. The descriptions of the used codes 4774006 and 4774007, and of the spare-parts code 4773514, contain no such wording [1].

The register describes 4773703 as "reselling equipment and machinery used for building and construction", and the description goes on to say the firm "is allowed to carry out the installation, repair and maintenance services for the equipment they deal in" [1].

The used codes are filed in a separate group, "Used heavy equipment trading". The register describes 4774006 as "reselling second-hand building and construction equipment and machinery", adding "as well as cranes, elevators and heavy objects lifts", and 4774007 as "reselling used heavy plants machinery and equipment, marine engines, lifting and loading equipment" [1]. Neither description mentions installation, repair or maintenance.

Common Mistake: Servicing machines on a used-equipment trading code. A yard that buys used loaders, reconditions them and resells is reselling under 4774007 and repairing under nothing. The register's repair activity is 3319902, Heavy Duty Equipment & Machinery Repairing & Maintenance, which covers work to "repair machinery and equipment" and names electric generators, water pumps and tower cranes [1]. Add it before the workshop opens, not after an inspection.

One point needs a direct answer from DET. The used trading codes are Commercial and 3319902 is Professional, and this guide found no published DET statement on whether both can sit on one licence. Put that question to DET in writing with your application. Rental, 7730004, is also Professional and a separate business that this article only names.

Which free zones list machinery trading, and which have no used-machinery activity?

JAFZA, RAKEZ, Meydan Free Zone and IFZA each list activities for both new and used machinery, while the DMCC and Dubai Airport Free Zone (DAFZA) activity lists carry no used-machinery activity at all, based on a search of the zones' published activity lists in August and October 2026 [4]. A used-equipment dealer should rule those two out first.

Free zones use their own code formats, so a zone code is not a DET code even when the digits match. The table gives the equivalents found in each list [4].

For machine-tool importers, Meydan Free Zone lists dedicated activities for machine tools (4659.07, wholesale of machine tools of any type, and 4659.09 for computer-controlled machine tools), and DAFZA lists 4659-010, computer-controlled machinery and tools, which the DET register does not have [4]. Hamriyah Free Zone and SAIF Zone activity lists were not available to this research, so ask each zone directly.

How much does a machinery trading company cost to set up in Dubai?

A Dubai mainland machinery trading company costs AED 18,200 in year one without a visa and AED 24,400 with one visa through BusinessDubai.ae, with renewal at about AED 15,000. Dubai free zone packages start at AED 12,500 licence only and AED 21,050 with one visa. None of those figures includes a yard, a warehouse or stock [19].

The table itemises BusinessDubai.ae's package prices and the costs outside them, each with its visa basis [19].

A flexi-desk package gives a registered address, not a yard, and it is not a Designated Zone base for corporate tax or VAT: Meydan Free Zone and IFZA are not on the Federal Tax Authority's list. If the business needs a yard or the Designated Zone route, price the zone that provides it, not the cheapest licence.

Real Talk: Published yard rents and dealer margins are not in this guide because the research found no primary source for either. One Dubai South business-hub page advertises gross margins of 15% to 40% per unit on used building machinery, with no source given. Treat that as advertising, and build your own numbers from written landlord quotes and your actual buy and sell prices.

At Meydan Free Zone and IFZA, a shareholder applying for an investor visa must show capital of at least AED 75,000 in a bank account, in the UAE or the home country [19]. The non-Dubai packages are cheaper because of location: our business setup in Ajman page shows what the Ajman Free Zone figure buys and Ajman Free Zone is on the Federal Tax Authority's Designated Zones list. Ask for a quote on your own activity list and visa count before you sign a lease.

Get an itemised machinery trading quote→

Should a machinery trader be on the Dubai mainland or in a free zone?

A machinery trader selling mainly to UAE contractors, factories and owner-operators usually belongs on the Dubai mainland, where it invoices local buyers directly from AED 18,200 in year one. A trader importing through a Designated Zone and re-exporting, or selling to dealers who resell, has reasons to use a free zone such as JAFZA [19].

The table compares the two routes for a machinery business [19].

The free zone advantage is real for a trader whose machines pass through a Designated Zone to dealers or abroad, and thin for a dealer whose customers are Dubai contractors.

The route changes your cost, your repair rights and your tax position. Our mainland company setup and free zone company setup pages itemise each route, including the renewal figure that a headline price leaves out.

Is industrial machinery a regulated product that needs a conformity certificate in the UAE?

Most heavy and industrial machinery is not on the Ministry of Industry and Advanced Technology (MoIAT) regulated products list. The list read for this guide has 82 numbered rows and none for earthmoving machines, cranes, forklifts, compressors or CNC machines. It does regulate lifts, escalators, low-voltage electrical equipment and several other classes [3].

The list is undated, so check the table against your HS codes. Regulation references are those shown on the list [3].

Two scope questions stayed open in the research: whether the low-voltage regulation reaches generator sets and industrial motors, and what size of rotodynamic pump the label scheme captures. Ask MoIAT in writing if those are your products.

Real Talk: Do not pay for an ECAS certificate on an excavator, a dozer or a forklift on the strength of a sales call: the MoIAT regulated list has no row for them [3]. The opposite error costs as much, which is importing lifts, flameproof equipment or LPG filling equipment without a conformity file. Check each product line against the list by name and HS code.

MoIAT's service page lists ECAS fees of AED 500 for technical review, AED 2,500 for issuance and AED 620 for registration, AED 3,620 per certificate, before laboratory test reports [5].

Does machinery need prior approval at UAE customs?

Some machinery classes appear on the restricted-goods table published by Abu Dhabi Customs, which shows MoIAT as the approving authority for loading and unloading equipment and for mechanical tools for metals, ceramics and concrete, and the Federal Authority for Nuclear Regulation for boilers. The scope by HS code was not confirmed [6].

A customs prior approval is a different instrument from an ECAS certificate, so it can name goods the MoIAT regulated list does not. Among goods needing prior approval, the Abu Dhabi Customs page lists loading and unloading equipment with the examples of elevators, escalators, conveyor belts and cable cars, and separately "Mechanical tools for metals, ceramics, concrete, etc.", both under MoIAT [6]. It lists "Nuclear reactors, boilers, mechanical devices and tools and their parts", heat exchangers and transformers exceeding 500 kVA under the Federal Authority for Nuclear Regulation [6].

Three caveats apply. The page is Abu Dhabi Customs' presentation and is undated. The Dubai Customs equivalent was not read for this guide. And the page does not say whether "loading and unloading equipment" reaches forklifts and mobile cranes, or whether "mechanical tools for metals" reaches CNC machine tools. If you import either class, ask Dubai Customs for the position on your HS code before the first shipment.

The same page lists "Used or refurbished tyres" among prohibited goods [6]. That is the only used-goods prohibition the research found, and no UAE age limit on used machinery turned up in any government or professional source searched on 10 October 2026.

How does customs duty work on machinery, and what happens on re-export?

Customs duty on machinery imported into the UAE is generally 5% of the CIF value, with machinery classified mainly in HS chapters 84 and 85. Goods entered for re-export move under duty suspension against a deposit or guarantee, and Dubai Customs was reported on 24 September 2026 to have temporarily extended that period to 180 days for cases expiring by 31 October 2026 [9].

The rate that binds you is the one on your eight-digit heading, so confirm it per machine. Chapter 84 holds mechanical machinery and chapter 85 electrical machinery. Before the first declaration you need a Dubai Customs code, which costs AED 120, and a free zone company needs its own code. Our Dubai Customs registration guide walks through the code and the declaration types.

What is the duty suspension period in 2026?

Khaleej Times reported on 24 September 2026 that Dubai Customs extended the duty suspension period for import for re-export, temporary admission and transit from 120 days to 180 days, for statuses expiring between 27 February 2026 and 31 October 2026, and that the period may be extended again [9]. The customs notice itself was not read for this guide, so confirm the current period with Dubai Customs.

How do deposits, refunds and temporary admission work?

Dubai Customs' published guidance says a deposit equal to the duty is taken on goods entering under a suspended status and refunded when the goods exit, and that goods under an ATA Carnet need no deposit [7]. The US Commercial Service's country guide of 26 August 2025 says heavy machinery brought in for a project needs a cash or bank guarantee equal to the duty and a copy of the project contract, with admission for six months, renewable up to three years for projects [8].

Common Mistake: Planning a used-machinery business around one fixed refund window. Secondary sources read for this guide give different claim windows and minimum values for duty refunds on re-export, and the suspension period itself changed during 2026. A machine that sits unsold past the period turns a refundable deposit into paid duty of 5% of CIF. Get the window in writing for your declaration type and diarise each machine's expiry date.

A Designated Zone removes most of this cycle for a re-exporter, because goods held in the zone are not dutiable until they are released to the mainland. One limit applies in every case: a buyer in another GCC state is not a duty-free export, because duty is collected at the first point of entry into the customs union. Our bonded warehouse guide compares the deposit route with zone storage.

Do you need an export permit to ship machinery out of Dubai?

An export permit is needed for machinery that appears on the UAE Control List, and it comes from the Executive Office for Control and Non-Proliferation (EOCN) before the goods move. The list is set by Cabinet Resolution No. 156 of 2025 and can be searched by HS code on the EOCN portal [10].

The EOCN publishes Cabinet Resolution No. 156 of 2025, "On the Schedule of Goods Subject to Control and Non-Proliferation", on its legislation page [10]. The schedule itself was not opened for this guide, so the technical parameters that put a machine tool or CNC machine on the list are not stated here.

The underlying statute was not read in primary text either. According to a June 2026 briefing by the law firm Kayrouz & Associates, the framework is Federal Decree-Law No. 43 of 2021 on commodities subject to non-proliferation controls, with Cabinet Decision No. 97 of 2024 as its implementing regulation [11]. The same briefing says a permit is needed to export, re-export or transit a controlled item, including re-export out of a free zone, that classification follows the technical specification and not the label, and that giving false or misleading information in a permit application carries a fine of AED 100,000 to AED 1,000,000 [11].

Pro Tip: Run the HS code of every machine tool, CNC machine, high-specification pump and valve through the EOCN Control List search before you quote an export price. A permit has to exist before the goods move, according to the Kayrouz & Associates briefing [11], so check at quotation stage, not at the port, and keep a dated record of each search in the deal file.

Two further points apply. The EOCN's guidance says UAE persons must apply the United Nations and local sanctions lists [10]. And re-export rules from the United States or the European Union can reach a UAE trader whose goods contain US-origin content, according to Kayrouz & Associates [11], so the origin of each machine belongs in the file.

Where do used machines from Dubai go, and how do exporters get paid?

Used machines sold in Dubai go to buyers across the UAE, the wider Gulf and Africa, according to trade press reports of auction results, which name Egypt, Ghana, Nigeria and South Africa among buyer countries. This guide found no official statistics on destinations, and no primary source on how UAE banks treat machinery exporters [12].

Trade press reports on the Ritchie Bros auction yard at Jebel Ali describe a site of about 155,000 square metres holding four auctions a year, with lots sold unreserved and "as is, where is", and one February 2026 sale of more than 1,900 lots [12]. One earlier sale was reported to have drawn more than 960 bidders from 71 countries, about 35% of them outside the UAE [12]. Those are trade-press figures, some undated, not audited data.

Destination-country rules on inspection, age or documentation for used equipment were not researched for this guide. Ask the buyer's clearing agent for the requirement in writing before you take a deposit.

On payment, the public instruments are export credit lines and insurance. Announcements describe a US$30 million credit line between the Abu Dhabi Exports Office and the Trade and Development Bank from May 2021, a US$20 million line for West Africa, and a letter-of-credit confirmation arrangement between Etihad Credit Insurance and First Abu Dhabi Bank [13]. Each scheme's eligibility criteria were not read.

Real Talk: No published UAE bank policy on machinery exporters selling to higher-risk markets was found for this guide, so anyone quoting you an approval rate is guessing. What is sourced is narrower: UAE persons must apply the sanctions lists [10], controlled goods need a permit [11], and WIO and Mashreq Neo open accounts readily for free zone companies [19]. Take the buyer's details, the destination, the machine's origin and your Control List search to the bank. Our corporate bank account guide covers the application itself.

Where should a machinery dealer put the yard or showroom?

Dubai's heavy-equipment dealers have been reported in three clusters: the Trucks & Heavy Equipment Market at Ras Al Khor, JAFZA around Gates 4 and 5, and Sharjah Industrial Area. That description comes from a Plant & Equipment article of 12 May 2020, so it is more than six years old and should be checked on the ground [14].

Plant & Equipment, an online machinery marketplace, reported in 2020 that the Ras Al Khor market opened in 2015 and held more than 40 dealers, that auctioneers and dealers clustered inside JAFZA, and that JAFZA visitors needed an appointment logged through Dubai Trade before entering [14]. The location decision follows the buyer:

• A dealer selling to UAE contractors wants a mainland yard a site manager can drive into, on a mainland licence.
• A re-exporter wants port access and duty suspension, which points to JAFZA. Our JAFZA free zone setup guide explains why JAFZA gives no package price and quotes land and warehouses on application.
• A trader priced out of Jebel Ali has two Sharjah zones on the Designated Zones list, covered in our Hamriyah Free Zone setup guide and SAIF Zone setup guide.

If Sharjah is on your shortlist for a mainland yard, our business setup in Sharjah page sets out what a Sharjah licence involves. For traders who also assemble or rebuild, our best free zones for manufacturing guide compares the industrial zones.

Yard rents are not quoted here, because the research found no official or professional source for them in any of these locations. Compare written quotes for the same plot size on rent, service charges and lease term.

Which free zones are VAT Designated Zones for a machinery trader?

JAFZA (North and South), Dubai Airport Free Zone, Hamriyah Free Zone, Sharjah Airport International Free Zone and Ajman Free Zone are all on the Federal Tax Authority's Designated Zones list. DMCC, Meydan Free Zone and IFZA are not. The edition read is dated September 2021, so check for later amendments [15].

Designated Zone status decides how VAT applies to goods held in the zone and is a condition of the corporate tax distribution route. The table uses the FTA list issued under Cabinet Decision No. 59 of 2017 as amended [15].

No single Dubai zone is cheap, designated and listed for used machinery at once. JAFZA is designated and lists the used activities but quotes premises on application. Meydan Free Zone and IFZA list them at package prices but are not designated.

One zone is left out on purpose. The Heavy Equipment and Trucks Zone at Al Awir is described on consultancy pages as a Designated Zone, but it is not named separately on the edition of the FTA list read for this guide, and its status was not confirmed. Ask the zone authority for written confirmation before any tax planning relies on it.

Can a machinery trading company pay 0% corporate tax in a UAE free zone?

A machinery trading company can earn 0% income only through the route called distribution of goods or materials in or from a Designated Zone, at Article 2(1)(l) of Ministerial Decision No. 229 of 2025. Machinery is not a Qualifying Commodity, so the commodity trading route that serves metals traders is closed [2].

Article 1 of the Decision defines the term this way [2]:

"Qualifying Commodities: Means the following commodities provided a Quoted Price for such commodities exists: 1. Metals, minerals, industrial chemicals, energy and agriculture commodities and Associated By-products, excluding products packaged for retail sale and any other products specified in a decision issued by the Minister. 2. Environmental commodities, being tradeable assets that represent a specific environmental benefit, such as carbon credits or renewable energy certificates."

Machinery and manufactured equipment are not in that definition. A metals trader has a route there, as our steel and metals trading guide explains.

The route that remains is listed at Article 2(1)(l) and defined at Article 2(3)(l). The definition in full reads [2]:

"Distribution of goods or materials in or from a Designated Zone, includes the buying and selling of goods, materials, component parts or any other items that are tangible or movable and may include the importation, storage, inventory management, handling, transportation and exportation of such goods or materials or parts thereof, provided that such activities are conducted in or from a Designated Zone, and the goods or materials entering the State are imported through the Designated Zone, and the goods or materials are supplied to any of the following: 1) A customer who resells, processes or alters such goods or materials, or parts thereof for the purposes of sale or resale. 2) A public benefit entity."

The definition sets three tests: the activity is conducted in or from a Designated Zone, goods entering the UAE are imported through that zone, and the customer either resells, processes or alters the goods for sale or resale, or is a public benefit entity.

The Decision also excludes one class of buyer outright. Article 2(2)(a) lists as an Excluded Activity "Any transactions with natural persons, except transactions in relation to the Qualifying Activities specified under paragraphs (e), (g), (h) and (k) of Clause (1) of this Article" [2]. Distribution is paragraph (l), which is not among the exceptions, so a sale to an individual is excluded.

This guide reads only the Decision's distribution route. Cabinet Decision No. 100 of 2023 sets the wider rules on Qualifying Income and was not analysed here, and other conditions, including audited financial statements, apply. Our Qualifying Free Zone Person guide covers those conditions.

Which machinery buyers produce qualifying income, and which do not?

A Designated Zone machinery trader can earn qualifying income on a sale to a dealer who resells the machine, or to a manufacturer who builds it into a product for sale. A sale to a contractor or factory that simply uses the machine does not fit the wording of Article 2(3)(l), and a sale to an individual is excluded [2].

The table applies the wording to the buyers a machinery trader meets. Every "can qualify" row assumes the trader operates in or from a Designated Zone and the machine entered the UAE through that zone.

The table is a reading of the text, not a ruling. The Decision does not say how a trader proves that a customer resells, processes or alters the goods, and no Federal Tax Authority guidance on that point for machinery was found. For the end-user rows, the sale does not fit the wording; take advice before filing on any other basis.

A new-equipment dealership sells to the contractors and factories that use the machines, so most of its revenue sits in the rows that do not fit. A wholesaler or re-exporter feeding other dealers sits in the rows that can qualify. Two companies with the same licence in the same zone can have opposite tax positions.

What happens when too much of a machinery trader's revenue comes from end users?

A Qualifying Free Zone Person may earn non-qualifying revenue up to the lower of 5% of total revenue or AED 5,000,000 in a tax period. Above that de minimis limit, the company is taxed at the ordinary rates, 0% to AED 375,000 and 9% above, from the start of that period [2].

Article 3 of Ministerial Decision No. 229 of 2025 says the requirement is met where non-qualifying revenue "does not exceed 5% (five percent) of the total Revenue of the Qualifying Free Zone Person in that Tax Period or AED 5,000,000 (five million dirhams), whichever is lower" [2]. Article 5(2) sets the consequence of failing: the company "shall cease to be a Qualifying Free Zone Person from the beginning of the relevant Tax Period and for the subsequent (4) four Tax Periods" [2].

Failure is not a penalty rate. The company becomes an ordinary taxable person for that period and the four after it, paying 0% on taxable income up to AED 375,000 and 9% above [16]. A company that stays a Qualifying Free Zone Person has no AED 375,000 band and no Small Business Relief on its non-qualifying slice [19].

Quick Math: A Designated Zone trader turns over AED 20,000,000. It sells AED 19,200,000 to dealers who resell and AED 800,000 to a contractor who uses the machines. The de minimis limit is the lower of 5% of revenue (AED 1,000,000) and AED 5,000,000, so AED 1,000,000. At AED 800,000 the trader is inside it. One more AED 600,000 crane sold to a contractor takes non-qualifying revenue to AED 1,400,000 against a limit of AED 1,030,000 (5% of the new AED 20,600,000 revenue), the limit is missed, and the whole period is taxed at ordinary rates, with four more periods to follow.

For a trader that is not a Qualifying Free Zone Person, including every mainland company, the relief to check is Small Business Relief. A resident taxable person with revenue of AED 3,000,000 or less can elect it for tax periods ending on or before 31 December 2029, under Ministerial Decision No. 131 of 2026, which amended Ministerial Decision No. 73 of 2023 [16]. Our Small Business Relief guide explains the election.

A mixed business can price a two-company structure: a Designated Zone company for wholesale and re-export and a mainland company for sales to end users. Whether two licences pay is a calculation on your own revenue split. Either way, tag every invoice by buyer type and review the end-user share against 5% of revenue each quarter.

Model your tax position→

How does VAT work on new and used machinery in the UAE?

VAT on machinery sold in the UAE is 5%, and exports are zero-rated when the goods leave within 90 days with the evidence the Federal Tax Authority requires. The profit margin scheme can apply to used machinery bought and resold inside the UAE, but not to machines the trader imports itself [17].

The registration thresholds are the standard ones: mandatory at AED 375,000 of taxable supplies and voluntary at AED 187,500 [18].

What changes inside a Designated Zone?

Goods held in a Designated Zone are treated as outside the UAE for VAT in defined cases, so a machine can enter the zone and leave for export without UAE VAT. Goods moved from the mainland into a Designated Zone are a local supply with VAT. Services supplied in a Designated Zone, including repair, carry 5%. And a machine released from the zone to a mainland buyer is an import with VAT due on release [18].

Can a used-machinery dealer use the profit margin scheme?

The Federal Tax Authority's Profit Margin Scheme guide, VATGPM1, published in January 2026, defines second-hand goods as "Tangible moveable property that is suitable for further use as it is or after repair" [17]. Machinery is not among its examples, although a used machine fits the words. The guide adds that "Non-usable scrap is not considered as Second-Hand Goods" [17].

The scheme lets a registered reseller charge VAT on the margin instead of the full price, and three conditions decide whether a machinery dealer can use it:

• Prior VAT. The guide says "The Scheme only applies to Goods which have previously been subject to VAT", and the reseller has to hold evidence of that [17].
• No imports. The guide says "The Scheme does not apply to the sale of Eligible Goods which the Reseller imported into the UAE", in which case the reseller accounts for VAT on the full value and may recover the import VAT [17].
• Repair, not rebuild. Repair is allowed where it does not change the machine's basic characteristics. A rebuild that changes its basic nature makes it a new good, outside the scheme [17].

Common Mistake: Applying the profit margin scheme to machines you imported. A dealer who imports a used excavator and sells it to a Dubai contractor charges 5% on the full selling price, not the margin [17]. The scheme only helps on stock bought and resold inside the UAE, and on an export it is irrelevant because the sale is zero-rated.

Whether a machine bought at a UAE auction qualifies depends on its VAT history and your evidence. Our VAT registration and compliance guide covers registration, returns and record keeping.

What are the steps to set up a machinery trading company in Dubai?

Setting up a machinery trading company in Dubai takes seven steps: fix the product list and buyer types, choose mainland or zone, select the DET or zone activities, secure the premises, obtain the licence, register for a Dubai Customs code at AED 120, and register for corporate tax and VAT.

No authority publishes a processing time for a machinery trading licence, and this guide does not invent one. The order is what matters.

1. Product list and buyers. List every machine class, new or used, and who buys it.
2. Jurisdiction. Mainland for sales to UAE end users; a Designated Zone for import, re-export and wholesale.
3. Activities. Match each product line to a code, and add 3319902 if you will repair.
4. Premises. A yard or warehouse lease for stock-holding dealers.
5. Licence and establishment card. Then visas for the owner and staff.
6. Customs code and conformity. Register with Dubai Customs, and open MoIAT files for regulated product lines.
7. Tax registrations. Corporate tax for every company, and VAT once the threshold is in sight. The penalty for late corporate tax registration is AED 10,000 [19].

In year two, licence renewal, visa renewals, the corporate tax return and VAT returns fall due close together. Our post-setup services team runs renewals, visas and filings for trading companies.

Which setup fits your machinery business?

The right setup follows the buyer: a Dubai mainland licence at AED 18,200 in year one suits a dealer selling to UAE contractors, a Designated Zone such as JAFZA suits a re-exporter selling to dealers, and a flexi-desk free zone licence from AED 12,500 suits only a broker holding no stock [19].

The table matches seven machinery businesses to a code, a base and a tax position. Building products have their own codes in our building materials trading guide.

The businesses that fit the free zone tax route sell to other traders. Those that sell to the people who operate the machines are usually better served by a mainland licence and a forecast at ordinary rates.

Real Client Stories

These are composite examples built from the situations machinery and equipment traders most often face. Names and details are illustrative, and the only figures used are published rules and BusinessDubai.ae's package prices.

Tariq's used-loader yard (Dubai mainland)

Tariq planned to buy used wheel loaders, recondition them in his own workshop and sell them to contractors. He intended to licence the business under 4774007, Used Heavy Equipment & Machinery Trading, and nothing else. The register description of that code covers reselling and has no installation, repair or maintenance clause. Reconditioning is a separate Professional activity, 3319902. He chose the Dubai mainland package at AED 24,400 with one visa, listed both activities in his application and asked DET to confirm how they would be licensed together.

Lesson: on a used-equipment code, the workshop needs its own activity.

Mei's CNC import business (free zone, then mainland)

Mei imported CNC machining centres and sold them to factories in Dubai and Sharjah. She started on a Dubai free zone package at AED 21,050 with one visa, expecting the 0% rate. Her zone was not a Designated Zone, and her customers were factories that installed and ran the machines, which does not fit the customer wording in Article 2(3)(l) of Ministerial Decision No. 229 of 2025. With revenue under AED 3,000,000, Small Business Relief was the relief that actually applied to her, and a mainland licence at AED 18,200 without a visa matched how she sold.

Lesson: the buyer decides the tax route, not the zone's brochure.

Kwame's re-export trade (Designated Zone)

Kwame bought used excavators in the UAE and Europe and sold them to dealers in West Africa. He applied the VAT profit margin scheme to every sale. Two corrections followed. Machines he imported himself are outside the scheme, so any local resale of those carries 5% on the full price. And his export sales were zero-rated in any case, so the scheme added nothing there. His dealer customers resell, which fits the Designated Zone distribution wording, so he tracked sales to end users against the de minimis limit of 5% of revenue.

Lesson: sort stock by where it was bought before choosing the VAT treatment.

Start your machinery trading company the right way

Three decisions carry the weight. The activity list: one code per machine class, a used code for used stock, and 3319902 if the yard repairs. The base, which follows your buyers and your need for a yard more than the licence price. And tax, where a dealer selling to machine users should plan on ordinary rates, and a Designated Zone wholesaler or re-exporter should plan on proving who its customers are.

BusinessDubai.ae has completed 700+ company registrations across the UAE since 2013, with itemised pricing and no hidden fees. For a dealer selling to UAE contractors, our mainland company setup service prices the licence at AED 18,200 in year one without a visa and AED 24,400 with one. For a re-exporter or a broker, our free zone company setup service compares the zones on activity list, Designated Zone status and visa cost.

Talk to a setup expert→

Frequently Asked Questions

What is the activity code for used heavy equipment trading in Dubai?

The DET activity is 4774007, Used Heavy Equipment & Machinery Trading, a Commercial licence activity. Used building and construction machinery has its own code, 4774006. Free zones use their own formats, such as 524006 at JAFZA and 4774.98 at Meydan Free Zone.

What is the difference between 4773703 and 4774007?

4773703 covers new construction equipment and its register description allows the firm to install, repair and maintain the equipment it deals in. 4774007 covers used heavy plant and has no repair clause.

Do I need a separate activity to repair the equipment I sell?

On the new-equipment codes, no: their descriptions allow installation, repair and maintenance of the equipment the firm deals in. On the used codes 4774006 and 4774007 and the spare-parts code 4773514, yes. The repair activity is 3319902, a Professional activity.

Can I rent out the equipment I sell on the same licence?

Not under a trading activity. Rental is a separate Professional activity in the DET register, 7730004, Heavy & Light Machinery & Equipment Rental.

Can I trade machinery as a broker without holding stock?

Yes, a trader can buy and sell machines without a yard, and a flexi-desk free zone licence from AED 12,500 without a visa is the low-cost base for that. A flexi-desk gives no storage, and goods that never pass through a Designated Zone do not fit the distribution route to 0% tax.

Is there a Dubai activity code for CNC machines or machine tools?

No dedicated DET code exists. The nearest is 4773601, Workshop Equipment, Machinery & Spare Parts Trading. Meydan Free Zone lists separate activities for machine tools (4659.07) and computer-controlled machine tools (4659.09).

Which activity covers generators, and which covers compressors and pumps?

Generators fall under 4773504, Power Generation, Transmission & Distribution Equipment Trading. Compressors and pumps fall under 4773503, Pumps, Engines, Valves & Spare Parts Trading, whose description includes "compressors of all kinds and sizes". Both carry the repair clause.

Which activity do I need to sell spare parts for excavators and cranes?

Construction Equipment & Machinery Spare Parts Trading, 4773615, covers parts for excavating, demolition, paving and cement-mixing machinery, cranes and lifts. Heavy Equipment & Machinery Spare Parts Trading, 4773514, covers heavy and industrial machinery parts more widely. Neither carries a repair clause.

Which free zones allow used machinery trading?

JAFZA, RAKEZ, Meydan Free Zone and IFZA all list activities for used building machinery and used heavy equipment, based on a search of their activity lists. The DMCC and Dubai Airport Free Zone lists carry no used-machinery activity.

Is JAFZA a better base than Meydan Free Zone or IFZA for a machinery dealer?

For a dealer holding stock and re-exporting, usually yes: JAFZA is on the Designated Zones list, sits at the port and offers land and warehouses. Meydan Free Zone and IFZA cost AED 21,050 and AED 21,400 with one visa but give a flexi-desk and are not Designated Zones. JAFZA quotes premises on application.

Is the Heavy Equipment and Trucks Zone at Al Awir a Designated Zone?

Its status was not confirmed for this guide. The September 2021 edition of the Federal Tax Authority's list names the Dubai Cars and Automotive Zone (DUCAMZ) but does not name the Heavy Equipment and Trucks Zone separately. Ask the zone authority for written confirmation before relying on it for tax.

How much does a machinery trading licence cost in Dubai in 2026?

Through BusinessDubai.ae, a Dubai mainland package is AED 18,200 in year one without a visa and AED 24,400 with one visa, with renewal at about AED 15,000. Dubai free zone packages are AED 12,500 licence only and AED 21,050 with one visa. Yard, warehouse and stock are extra.

Does machinery trading qualify for 0% corporate tax in a free zone?

Only in part. Machinery is not a Qualifying Commodity under Ministerial Decision No. 229 of 2025, so the route is distribution from a Designated Zone to a customer who resells, processes or alters the goods for sale, or to a public benefit entity. Sales to end users do not fit that wording.

What counts as a customer who resells, processes or alters the machine?

The Decision does not define it further. On the words, a dealer buying to resell fits, and so does a manufacturer who builds an engine or pump into a product it sells. A contractor or factory that uses the machine does not fit the wording. Take advice on borderline customers.

Can a machinery trader use Small Business Relief?

Yes, if it is an ordinary taxable person with revenue of AED 3,000,000 or less, for tax periods ending on or before 31 December 2029 under Ministerial Decision No. 131 of 2026. A company that remains a Qualifying Free Zone Person cannot use it.

What happens if my free zone machinery company fails the de minimis test?

It stops being a Qualifying Free Zone Person from the start of that tax period and for the following four periods. For those periods it is taxed at the ordinary rates: 0% on taxable income up to AED 375,000 and 9% above. The limit is the lower of 5% of revenue or AED 5,000,000.

Is customs duty 5% on machinery, and can I get it back on re-export?

The standard rate is 5% of CIF value, and the binding rate is the one on your HS heading. Goods entered for re-export move under duty suspension against a deposit or guarantee that is released on exit. Sources differ on refund claim windows, so confirm yours with Dubai Customs.

Can I bring machinery into the UAE on temporary admission for a project?

Yes. The US Commercial Service's August 2025 guide says heavy machinery for a project needs a guarantee equal to the duty and a copy of the project contract, with admission for six months, renewable up to three years for projects.

Does 5% VAT apply when I export used machinery?

No, an export of goods is zero-rated when the machine leaves the UAE within 90 days of the supply and you hold the export evidence the Federal Tax Authority requires. Keep the customs exit documents with the invoice.

Can I use the VAT profit margin scheme on used machinery?

Yes, for used machines bought inside the UAE that were previously subject to VAT, where you hold the evidence, under the Federal Tax Authority's guide VATGPM1 of January 2026. Not for machines you imported yourself: those carry VAT on the full selling price, and you may recover the import VAT.

Do excavators, cranes and forklifts need a MoIAT conformity certificate?

The MoIAT regulated products list read for this guide has no row for excavators, loaders, dozers, cranes or forklifts, so no ECAS route was identified for them. The list is undated, so confirm your HS codes with MoIAT and Dubai Customs.

Do generators and electrical machinery need ECAS?

Low-voltage electrical equipment is regulated on the MoIAT list, and equipment for explosive atmospheres needs ECAS-Ex under Cabinet Resolution 23 of 2016. Whether the low-voltage regulation reaches generator sets and industrial motors was not confirmed. MoIAT's service page lists ECAS fees of AED 3,620 per certificate.

Is there an age limit on used machinery imported into the UAE?

No UAE age limit on used machinery was found in any government or professional source searched on 10 October 2026. The only used-goods prohibition found was "Used or refurbished tyres" on the Abu Dhabi Customs list.

Do I need a permit to export machine tools or CNC equipment from Dubai?

Only if the machine is on the UAE Control List, set by Cabinet Resolution No. 156 of 2025 and searchable by HS code on the Executive Office for Control and Non-Proliferation's portal. The list's technical parameters were not read for this guide. A law firm briefing reports fines of AED 100,000 to AED 1,000,000 for false permit information.

Do I need a Dubai Customs code to import machinery?

Yes. No import or export declaration can be filed without an active customs code, which costs AED 120. A free zone company needs its own code.

Do road-going machines such as loaders and mobile cranes need RTA registration?

This guide found no primary source on Roads and Transport Authority registration rules for road-going plant, so it gives no answer. Ask the RTA directly before you sell a machine as road-ready.

References

[1] Dubai Department of Economy and Tourism. Business activity list as recorded in a public copy of the register: activity codes, names, groups, licence types and descriptions for machinery trading, repair, rental and assembly activities. invest.dubai.ae

[2] UAE Ministry of Finance. Ministerial Decision No. 229 of 2025 Regarding Qualifying Activities and Excluded Activities: Article 1, Article 2(1)(l), Article 2(2)(a), Article 2(3)(l), Article 3 and Article 5. mof.gov.ae

[3] Ministry of Industry and Advanced Technology. List of technical requirements for regulated products (undated, read 10 October 2026). moiat.gov.ae

[4] Free zone authorities. Published activity lists of JAFZA, Dubai Airport Free Zone, RAKEZ, Ajman Free Zone, DMCC, Meydan Free Zone and IFZA, compiled 22 August 2026 and searched 10 October 2026. jafza.ae

[5] Ministry of Industry and Advanced Technology. Issue conformity certificates for regulated products (ECAS): fees and required documents. moiat.gov.ae

[6] Abu Dhabi Customs. Restricted and banned commodities: goods needing prior approval and the approving authority (undated). adcustoms.gov.ae

[7] Dubai Customs. Published guidance on deposits against suspended duty, refunds on exit and ATA Carnets. dubaicustoms.gov.ae

[8] US Commercial Service. United Arab Emirates Country Commercial Guide, temporary entry, 26 August 2025. trade.gov

[9] Khaleej Times. Report of 24 September 2026 on Dubai Customs extending the duty suspension period for import for re-export, temporary admission and transit from 120 to 180 days. Khaleej Times report

[10] Executive Office for Control and Non-Proliferation. Legislation page listing Cabinet Resolution No. 156 of 2025 On the Schedule of Goods Subject to Control and Non-Proliferation, the Control List search and sanctions guidance. uaeiec.gov.ae

[11] Kayrouz & Associates. Briefing on UAE dual-use export controls, 23 June 2026: Federal Decree-Law No. 43 of 2021, Cabinet Decision No. 97 of 2024, permits and penalties. kayrouzandassociates.com

[12] TradeArabia and Middle East Construction News. Reports on Ritchie Bros auctions at Jebel Ali, including site size, lot counts and bidder countries. tradearabia.com

[13] Emirates News Agency (WAM) and Etihad Credit Insurance. Announcements on Abu Dhabi Exports Office credit lines and letter-of-credit confirmation arrangements. wam.ae

[14] Plant & Equipment. Where to buy heavy equipment in the UAE, 12 May 2020. plantandequipment.com

[15] Federal Tax Authority. Designated Zones list under Cabinet Decision No. 59 of 2017 as amended, edition of September 2021. tax.gov.ae

[16] UAE Ministry of Finance. Corporate tax rates under Federal Decree-Law No. 47 of 2022, and Ministerial Decision No. 131 of 2026 amending Ministerial Decision No. 73 of 2023 on Small Business Relief. mof.gov.ae

[17] Federal Tax Authority. Profit Margin Scheme, VAT Guide VATGPM1, January 2026. tax.gov.ae

[18] Federal Tax Authority. VAT registration thresholds, zero-rating of exports and the treatment of Designated Zones. tax.gov.ae

[19] BusinessDubai.ae. Internal data: 2026 package prices for the Dubai mainland and UAE free zones, with the visa basis, renewal figures, capital and banking notes that accompany them. businessdubai.ae