The Dubai ecosystem is undeniably the perfect setting for businesses to prosper as one of the world’s fastest-growing cities. This is because of its liberal trade policies, its growing population, its tourist influx, and its higher standard of living coupled with a robust economy. In Dubai, commonly known as the ‘City of Gold,’ 25% of the global gold trade takes place. Thus, it would not be wrong to say that gold trading companies are flourishing in Dubai. For this reason, the gold business in Dubai is one of the most rewarding and productive ventures available to investors throughout the world.
We will discuss the gold trading business in Dubai, which has been growing at a rapid pace. It has always been considered to be one of the most lucrative and profitable investment opportunities in Dubai. As a matter of fact, gold and other precious metals have a constant and high customer base. Dubai offers excellent quality with government certifications, making it a prime jewelry shopping destination.
However, if you are interested in starting an online gold trading business rather than a physical store for gold in Dubai, it is an excellent idea.
Gold Trading Company Registration
To start your gold trading business in Dubai, there are basically three major jurisdictions you can choose from to set up your company, which are as follows:
- Dubai Multi-Commodities Center (DMCC) Free Zone
- Dubai Mainland
- Gold & Diamond Park
In all three of these areas, there are a number of mandatory procedures and documentation required for starting a Dubai gold business.
So here we solve your problem and help you to provide all the information that you would require that will assist you in setting up your gold trading company in Dubai.
DMCC free zone
Dubai Multi Commodities Center (DMCC) is a free zone located opposite Dubai Marina Beach And established in 2002. In Dubai, gold trading businesses can benefit from 100% business ownership, well-built infrastructure, a guaranteed 50-year tax holiday, and freehold property options.
DMCC also provides office and warehousing space. You must prepare, sign, and submit to DMCC the tenancy agreement and rental contract when renting property for business purposes.
Gold & Diamond Park
Gold & Diamond Park (GDP) was established in 2011 and it is one of the most suited places for manufacturing and retailing precious stones, including diamonds. There are a number of high-quality manufacturing units and a retail center, as well as warehousing facilities within the Jebel Ali Free Zone Authority.
In addition to 350 offices and retail shops, GDP has 118 manufacturing units, all of which trade, retail, and manufacture gold and precious stones.
The advantages of this zone include the employment of foreign ex-pats, 100% ownership, low corporate taxes, and the hallmarking facility provided by the Dubai Municipality, making it attractive to open a gold trading company here. In addition, it recently began leasing premium commercial space to gold traders.
There are different license options offered by GDP, each requiring a license to be obtained from a specific authority. Some of these include:
- Trading License
- Manufacturing License
- Retail License
- E-commerce License
- Service License
Dubai Mainland – Gold Souk
There is also the possibility of setting up your trading business in mainland of China if you wish. The main advantage of this center is that it is strategically located, offers you more retail space, has no VAT or profit tax, and does not have any minimum capital requirements, along with allowing you to run your business from any part of the UAE.
And if you decide to set up your gold trading business in Dubai Mainland, undoubtedly ‘The Gold Souk Market’ is the top location for you to do so if you wish to establish your business there. There are around 300 retail outlets in this city, which makes it a great place to set up a business. One of the key advantages of setting up a business in this city is that local people will be the target market and you will be able to directly sell to them. Furthermore, the area around the city is well-known for import and export, so if you are interested in trading of any other kind, this would certainly be an excellent option for you.
It is a business setup in the Mainland that offers investors a 49% share in the company, while the other 51% is owned by a Dubai local partner, who has an ownership share of 51% of the company.
Acquiring your business license
Gold trading licenses in Dubai will give you the authority to operate your business in Dubai, which is the most important step in opening a gold trading online UAE business. Trade licenses are required based on the nature of your business activity and the area you choose.
Therefore, if you are setting up a gold trading company on the mainland, you should apply directly to the Department of Economic Development. If you have decided to conduct business in GDP, then the Jebel Ali Free Zone Authority is the authority that will issue you the licenses. Similarly, if you wish to apply for a free zone, you must make your application directly to the managing authority of the free zone in question.
Your company’s licensing structure varies based on the type of business activity it engages in.
Applying for your gold trading company license
you are required to have the following typical documentation for obtaining the license:
- Application fees
- Completed application form
- Two passport-size photos
- Passport/visa copy of the owner or shareholders
- Copy of sponsors passport/Emirates ID
- CV of the manager
- Proof of trade name
- Copy of Initial Approval Certificate
- Document of initial approval fee payment
- Company registration form from the respective trading zone
- Copy of notarized MoA or LSA agreement
- Tenancy or Lease agreement (if any)
How to start a gold trading business in Dubai?
In order to prepare an application for submission to the relevant authorities, you need to ensure that you have taken the following steps before contacting them:
- Registering a valid trade name
- Select the nature of your business venture
- Detailed business plan
- Getting a legal status for your business venture in Dubai
- Select a partner or local sponsor
- Minimum capital requirement:
The minimum cost to start a gold business in Dubai free zone is AED 150,000, plus rent to the gold park management. This criterion is only applicable to free zones.
Additionally, you must deposit 15% of the yearly unit rent as a refundable deposit. It should be noted that the maintenance fee is not included.
- Drafting and signing of MoA or LSA agreements with your partner or local sponsor in Notary Public Court
- Attested company name approval letter for the authorities
- Leasing and tenancy contract (Tejari) for your business
Opening a bank account for gold trading companies in Dubai
Upon receiving your Dubai gold trading license, you must open a corporate bank account for financial transactions.
What benefits of investing in the gold trading business in Dubai?
When choosing the type of business or structure, you should be cautious because rolling back can be quite costly. There are several reasons why Online gold trading in Dubai is risk-free and highly profitable:
1. Location benefit
It is possible for foreign investors to start an international gold trading online business in Dubai either in one of the suitable free zones or on the mainland of the city. Businesses on the mainland benefit from gold exchange markets like Dubai Gold Souk, which facilitate hassle-free forex gold trading platforms in Dubai. In addition to the distinct advantages associated with these free zones, when it comes to the area that you decide to penetrate, there are various other benefits as well. It is important to note that DMCC and Dubai Gold and Diamond free zones offer numerous benefits to investors. They are:
- Exemption of tax on imports and exports
- Zero percent corporate and personal taxes
- Safe and secure
- 100% return on invested funds and profits earned
- Shuttle transport for consumers
2. Advantage of tourism
Dubai is a popular tourist destination, and this offers many opportunities for gold businesses. There is no doubt that Dubai Gold Souk is one of the most popular tourist attractions in Dubai because of gold shopping.
It Has displays of beautiful gold ornaments that can be fascinating to anyone. There are a large number of gold retailers and jewelry designers in Dubai now offering gold and diamond jewelry online.
3. VAT on gold trading
There are many benefits that Dubai offers to its gold trading companies and to those who own a gold trading license in Dubai. People come from all over the world for the gold ornaments and jewelry available in Dubai, because the market is so vast. Furthermore, the region offers a wide range of gold products at a relatively lower price than other parts of the world, which is contributing to the region’s popularity. It’s because of the VAT exchange mechanism.
The law provides that listed and registered gold producers do not charge VAT on gold products resold or manufactured by other dealers. It is true that VAT is charged on retail purchases, but its rate is very low (5% of the purchase price).
4. Liquid asset
Gold is a liquid asset, which means that it can easily be converted into cash. This reduces the risk associated with the gold business. During an emergency, you can quickly convert some of your gold into cash. Due to this property of gold, it differs from other types of businesses in that it doesn’t significantly affect liquidity. This is one of the major reasons why people prefer investing in gold.
What documents are required?
The following documents are required for registering a gold trading business in Dubai:
- Pre-approval form
- Precise business plan
- Proof of trade name
- Passport copy
- Residency proof
- No Objection Certificate and any other relevant document as demanded by the concerned authority
Documents required to get the gold trading license in Dubai:
- Copies of passports of the shareholders
- Proof of trade name
- Initial approval proof
- Notarized memorandum and articles of association
- Tenancy contract
- Lease agreement
Connect with ISA Bullion
Planning to start online gold trading in Dubai? Opening a gold trading account in Dubai can certainly be a profitable venture for you. Though this is only possible with less amount of planning and execution. Moreover, for an ex-pat investor, the process may seem to be quite challenging as it involves a lot of legalities. Hence, if you have plans to start online gold trading in Dubai then contact ISA Bullion Setup for your account now. Our team of experts is well-versed in all the necessary formalities. From planning to eventually set up your gold trading account in Dubai, leave the task to us.
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