Dubai is a veteran traditional market in the Middle East that strategically connects the eastern and western continents for trading purposes. One can trade all kinds of products in the Dubai market, be it spices, textiles, furniture, appliances, or even gold. The city is known as the ‘City of Gold’ for being a major thriving market for precious stones and metals. Therefore, the idea of starting a gold trading business in Dubai can never go wrong.
Benefits of establishing a gold trading business in Dubai
Here are a few good reasons why gold trading business in Dubai can be the best choice –
Location Advantage
Foreign investors can either go for suitable free zones or Dubai mainland to start a traditional gold business or online gold trading in UAE. Various gold-centric markets offer an array of benefits to businesses and facilitate a hassle-free business setup in Dubai. These associated benefits include the following:-
- Tax exception on imports and exports
- Minimal corporate and personal taxes
- Safe and secure trading
- 100% return on invested funds and profits earned
- Hallmark facilitated products
- Shuttle facility for customers
Tourism
Being a world-renowned tourist destination, Dubai offers abundant opportunities for gold businesses to thrive. Due to the excess tourist influx, a large number of gold retailers and creative jewelry designers have strengthened their business in Dubai. Most of the people visiting Dubai prefer shopping for gold along with other products, and Dubai Gold Souk is one of the major attractions for them.
Low VAT
Dubai’s gold market is so vast that people from around the world come to the city to purchase gold ornaments and jewelry. Moreover, due to the VAT exchange mechanism, these products can be purchased at much lower prices compared to other gold destinations in the world.
According to the VAT exchange mechanism, registered gold manufacturers cannot charge VAT from other dealers who sell or manufacture gold products. It is levied only from retail customers that too at a very low rate.
Liquid asset
Liquid assets refer to those assets that can be converted to cash easily. This feature of gold, thus, makes the business less risky. During emergencies, one can convert gold into cash in no time, and that is one of the major reasons why more and more people prefer investing in gold items.
Quality
The quality of jewels and precious stones sold in Dubai is recognized globally. That is probably why there is always an endless demand for such items from the Dubai market. Consequently, the chances of a shortage of customers for this business are quite low.
Safe and secure
The UAE government is stringent with its rules and regulations pertaining to the gold industry. It has laid strict instructions for rigorous checking of gold and other jewels brought into Dubai and also ensures that only the most authentic and best quality jewelry is sold in the market.
Elite Community
Dubai abodes some of the world’s richest and most affluent people who possess a high net worth. The demand for gold and precious stones like diamonds, pearls, platinum, etc. is quite high among this particular group of society. This again ensures that this sector can never go out of business or customers.
Types of Gold Trading Licenses in UAE
The type of gold business activity you opt for determines the type of trading license you can apply for. Below listed are the available types of Gold Trading License in Dubai –
- Commercial/Trading license – For trading activities like jewelry sourcing and trading, non-manufactured precious metal trading, etc.
- Retail license – For retail of gold stock
- Professional license – To offer professional services such as a goldsmith, testing gold & precious metals in a laboratory, etc.
- Industrial license – To perform industrial activities such as manufacturing gold & precious metals, casting and cutting, refining, etc.
- E-commerce license – For selling gold items online via website or other online platforms
- To know which license suits your preferred business activity, speak with the business experts at UAE Expansion.
Various Jurisdictions for a Gold Business Setup in Dubai
There are three main jurisdictions to set up a gold trading business in Dubai.
Dubai Multi-Commodities Center (DMCC) Free Zone
Dubai Multi Commodities Center was established in the year 2002 opposite the Dubai Marina Beach. Apart from a strategic location, the free zone offers complete business ownership, sturdy infrastructure, a guaranteed 50-year tax exemption, and freehold property options as well. Thus, it makes up for an ideal spot for a gold trading business setup. In addition, it also has numerous office spaces and warehousing facilities, where investors can rent a property to carry out business activities.
Dubai Mainland
You can also consider setting up your business in Dubai Mainland and the top location to go for is ‘The Gold Souk Market’. The major advantage of opting for this location is the availability of more retail space, no VAT and profit tax, no minimum capital requirement, and the permission to trade in any part of the UAE.
Apparently, the market is home to around 300 retailers who target the local people and sell directly to them. Besides, if you are interested in trading other goods, the area could serve as the best option.
Gold & Diamond Park
Established in 2001 under the Jebel Ali Free Zone Authority(JAFZA), the Gold & Diamond Park is yet another most-suited place for manufacturing, trading, and retailing gold and other precious stones like diamonds. The area comprises huge manufacturing units and retail centers along with excellent warehousing facilities.
The other advantages offered by this jurisdiction include employment opportunities for expats, foreign ownership, low corporate taxes, hallmarking facilities from Dubai Municipality, premium commercial leasing facilities, and many more.
The procedures and documentation may vary in all three areas, and therefore UAE Expansion professionals will help you out with the requisite information and assist you in choosing the suitable one for your business.
Documentation
For registration of gold trading business in Dubai:-
- Pre-approval form
- Business plan
- Trade name certificate
- Passport copy
- Residence proof
- NOC (No Objection Letter), as required
For gold trading license in UAE:-
- Notarized Memorandum of Association and Articles of Association
- Tenancy contract/Lease Agreement
Process to set up a gold trading business in Dubai
The process of setting up a gold business in Dubai involves the following steps:-
- Determining the gold business activity
- Finding a perfect location for business setup
- Deciding a legal structure
- Picking an appropriate name and registering it with the relevant authority
- Drafting the required company documents – MoA/LSA
- Obtaining special approval for gold trading
- Completing the license application and submitting it with the necessary paperwork
- Paying the relevant license and registration fee
Additionally, a gold trading business setup in Dubai also requires fulfillment of the following formalities –
- Anti-Money Laundering(AML) Registration
- AML Policy Formation and Implementation
- VAT Registration
- Visa Applications
- Establishing Payment gateways
- Opening a business bank account
- Business Insurance
Connect with UAE Expansion
If you need assistance with any of the above courses of action, then UAE Expansion has got your back! UAE Expansion offers comprehensive incorporation and compliance services to businesses dealing in gold, precious metals, and stones. As this sector is vulnerable to fraudulent activities, UAE Expansion helps mitigate these risks and establish robust AML policies and procedures within the organization. For example, training the employees, regular audits, internal controls, etc.
So, let go of the fear and partner with the best business setup consultants for your gold trading business in Dubai. Book a free consultation with UAE Expansion advisors today!
