Dubai is popular for having a diverse economy which makes it a suitable environment for foreign investors and multinationals. It is also one of the world’s most popular leisure and business destinations due to its cultural diversity and advanced infrastructure. Due to an influx of tourists and expatriates, investors can engage in trading all the time while in Dubai.
Dubai is also a leading market player when it comes to gold, diamond, and other precious metals. In 2017, Dubai exported gold at the amount of AED 41.2 billion. It takes up 30 percent of the UAE’s total non-oil sector imports.
There are ideal places to set up a precious metals business in Dubai. These are the Dubai Gold and Diamond Park, Dubai Multi Commodities Centre, or mainland.
The Dubai Gold and Diamond Park
This was established in 2011 and since then has become a preferred destination by jewelry enthusiasts. You can find 90 leading jewelry retailers in the park and there are also custom-made jewelry. The park offers investors a leased building to be used for manufacturing gold, diamonds, and precious metals. You may also choose to do office leasing which can guarantee you top-quality infrastructure.
Benefits of Setting Up a Gold Business in the Dubai Gold and Diamond Park
- 24/7 secured workplaces
- Works as a one-stop shop for manufacturing, trading, and also buying gold and other metals
- Affordable corporate taxes
- 100 percent company ownership
- A conducive working environment with proper waste management and ventilation
- Hallmarking done by Dubai Municipality
- Ease in hiring expatriates.
Types of Licenses
These are the types of licenses that expatriates can choose from when setting up a business in the free zones.
- Service license
- Manufacturing license
- E-commerce license
- Retail license
- Innovation license
- Trading license
How to Set Up a Gold Business in the Dubai Gold and Diamond Park
The following are the steps to take when opening a precious metals business in the Dubai Gold and Diamond Park according to the Jebel Ali Free Zone Authority.
- Get an agreement with the Dubai Gold and Diamond Park for rent payment.
- Fill out the initial approval application and submit this to the Jebel Ali Free Zone (JAFZA).
- Obtain a Memorandum of Association and partnership agreement and submit them to JAFZA.
- You will be issued a certificate of gold trading in Dubai by JAFZA. This is required for opening a bank account.
- A bank account has to be opened for further proceedings.
- After receiving bank confirmation, the authority will release the final copy of the gold trade license in Dubai.
Dubai mainland offers a location for any gold trader to set up a business. The golden rule when choosing the mainland is to seek a gold souk as a business destination. A gold souk is the traditional market of gold located in the heart of Deira, the commercial district, which allows for 300 retailers to engage in gold trading.
Advantages of Setting Up a Gold Business in Dubai Mainland
- Ease of hiring
- Strategic location for tourists
- VAT and profit tax exemption
- Flexibility for business operations anywhere in the UAE
- No minimum capital requirement
How to Set Up a Gold Business in Dubai Mainland
There are certain business activities that are required for setting up a business in Dubai Mainland. Special permits are also required from some government authorities to establish a gold business in mainland Dubai. The following are some of the activities:
- Company name reservation
- Selection of office space and tenancy contract
- Local partner selection
- Initial approval application
- Submission for mainland company formation
- Preparation of court notarization and Memorandum of Association (MOA)
- Selecting the business activity
- Collection of the business license from the Department of Economic Development (DED).
DMCC Free Zone
Dubai Multi Commodities Centre (DMCC) was established in 2002. It has a strategic location across the Dubai Marina Beach and Emirates Mall. It is built in the Jumeirah Lake Towers (JLT) which allows it to make use of built-in infrastructure and other facilities. DMCC’s major business is gold trading even if it is known to be a trade and commerce hub. There are incentives and world-class infrastructure offered to investors for them to set up business in DMCC.
Benefits of Setting Up a Gold Business in DMCC
- 24/7 access to facilities for operations
- Total profit and capital repatriation
- Absence of corporate and personal taxes
- Well-built infrastructure
- 100 percent company ownership
- A safe and secure business location and environment with round the clock security, fire alarm system, and 24/7 video surveillance.
How to Set Up a Precious Metal Business in DMCC
The steps to the incorporation of the business have been simplified by the Dubai government to encourage more traders. The following are some of the predetermined procedures for setting up a precious metals business in the DMCC:
Submit the application form for the business name reservation to the free zone authority.
The following documents are required for submission to the DMCC free zone for the company to be registered:
- Proof of initial approval
- Detailed business plan
- Lease agreement
- Attested and notarized Memorandum and Articles of Association (MAA)
- Copies of shareholders’ passport
- The manager’s personal data sheet
- Power of attorney for the legal representative (still attested and notarized)
- Trade name proof
Once the documents are reviewed, it is possible to choose the required license through paying a particular amount of fee. With a free zone license, trading in the free zone is allowed and also trading outside the country without any limitations.
It is a wise investment to set up a precious metals business in Dubai. You may start by hiring a business consultant who will help you start the precious metal business with ease. Contact us now for more information.