Are You a UAE Manufacturer Paying 5% Customs Duty? You Might Be Eligible for 0%

Unlock Significant Cost Savings with MOIAT’s Customs Duty Exemption Scheme

1. Overview of Duty Exemption
2. Who Can Apply
3. Key Compliance Requirements

4. Key Compliance Requirements
5. Common Application Challenges

6. Stratify’s Support Services

The UAE’s journey toward becoming a regional and global manufacturing hub is underpinned by proactive government initiatives designed to enhance industrial competitiveness. One such high-impact tool is the MOIAT Customs Duty Exemption, enabling manufacturers to import raw materials, machinery, and production-related equipment at 0% customs duty, significantly lowering operating costs and enhancing working capital.

This article provides a clear, practical guide on eligibility, the process, and benefits of the exemption under UAE law for manufacturers.

What is the MOIAT Customs Duty Exemption?

Ordinarily, imports into the UAE attract a 5% customs duty. However, to incentivize local manufacturing, the Ministry of Industry and Advanced Technology (MOIAT) offers an exemption allowing manufacturers to import eligible items duty-free if they are used exclusively in industrial production processes.

This exemption applies across all Emirates, including Abu Dhabi, Dubai, Sharjah, Ajman, Ras Al Khaimah, Fujairah, and Umm Al Quwain, and can play a crucial role in improving profitability and cash flow for manufacturers.

Who is Eligible?

To benefit from this exemption, your business must meet the following criteria:

UAE Industrial License: The company must hold a valid Industrial License issued by MOIAT or by free zones and economic departments across the Emirates (e.g., JAFZA, KIZAD, RAKEZ, Dubai Industrial City, etc.).
Operational Facility: Your factory should be operational within the UAE, utilizing imported items in manufacturing.
MOIAT Registration: The company must be registered with MOIAT and hold an Industrial Registration Number (or Industrial Production Certificate). If not yet registered, the process can be completed during the exemption application.
In-Factory Use: Imported items must be used strictly within your manufacturing process, not for trading or resale.

What Can Be Imported Duty-Free?

Manufacturers can import the following categories at 0% duty under the exemption:

Raw Materials: All essential inputs for production such as metals, polymers, chemicals, and textiles.
Machinery & Equipment: Including production lines, CNC machines, and assembly equipment.
Spare Parts & Consumables: Required for maintaining or operating machinery in the production facility.
Packaging Materials: Used for packing finished goods (boxes, labels, bottles, etc.).

Practical Challenges to Be Aware Of

MOIAT Inspections: The Ministry may request plant inspections to confirm the intended use of imported items
HS Code Classification Errors: Misclassification can delay or block exemptions.
Documentation Gaps: Missing or unclear documents often result in application rejections.
Compliance Requirements: Manufacturers must retain detailed records of imports and usage for potential audits.

How We Assist UAE Manufacturers

Successfully obtaining and managing MOIAT Customs Duty Exemptions requires expertise and close attention to detail. Our firm supports manufacturers across the UAE with:

Eligibility Assessment: Reviewing your business model and import plans to confirm exemption eligibility.
End-to-End Application Management: Preparing and submitting your application accurately, avoiding delays and rejections.
Monitoring and Liaison: We follow up on your application with MOIAT, respond to any clarifications, and keep you informed throughout.
Post-Approval Guidance: We support your team and customs brokers during import clearance and assist in preparing utilization reports for future quota increase requests.
Compliance Advisory: We assist in developing internal SOPs to maintain clean documentation for customs and MOIAT inspections, safeguarding your exemption benefits.

Want to explore how this exemption can benefit your business? Whether you are importing specialized machinery for your production lines or critical raw materials for your manufacturing process, leveraging this exemption under UAE law helps your business remain agile and cost-efficient. The MOIAT Customs Duty Exemption is a strategic tool for UAE manufacturers to reduce import costs, enhance cash flows, and support sustainable growth in a competitive market.

Reach out to us on info@stratify.ae to review your eligibility and start the application process to unlock savings and efficiency in your supply chain.