How to get license for gold trading business in Dubai, UAE?
One of the fastest growing cities in the world, Dubai undeniably presents the perfect ecosystem for businesses to thrive. Thanks to its liberal trade policies, growing population, tourist influx, better standard of living coupled with robust economy. Popularly known as the ‘City of Gold’, reports say 25% of global gold trade occurs in Dubai. Therefore, it wouldn’t be wrong to say that gold trading companies in Dubai are thriving. Hence, the gold business in Dubai is a rewarding and productive venture for investors across the globe.
Let’s discuss the gold trading business in Dubai which has been growing at a swelling rate. It has always been considered as one of the most lucrative and profitable business investments in Dubai. It’s a fact that there is a constant and high customer base for gold and other precious metals. The city provides excellent quality with certifications from the government, making Dubai a prime shopping destination for jewelry.
That being said, if you want to start your online gold business in Dubai or an offline store, then indeed it’s an excellent idea.
Gold Trading Company Registration
First and foremost, to starting the gold trading business in Dubai, there are basically three major jurisdictions that you need to select from to set up your gold trading company which includes of:
- Dubai Multi-Commodities Center (DMCC) Free Zone
- Dubai Mainland
- Gold & Diamond Park
Notably, all these three areas have a number of mandatory procedures and documentation required to begin your Dubai gold business.
To help you out, here is all the information that you would require that will assist you in setting up your gold trading company in Dubai.
DMCC free zone
Established in 2002, Dubai Multi Commodities Center (DMCC) free zone enjoys strategic location with being opposite to the Dubai Marina Beach. It offers advantages such as 100% business ownership, well-built infrastructure, a guaranteed 50 year tax holiday and freehold property options, making it an ideal spot for business entrepreneurs or companies to set up a gold trading business in Dubai.
Moreover, DMCC offers office spaces and warehousing facilities. When you rent a property to carry out business then ensure that the tenancy agreement and rental contract are prepared, signed and submitted to DMCC.
Gold & Diamond Park
Established in 2011, Gold & Diamond Park (GDP) is one of the most suited places for manufacturing and retailing of gold and other precious stones, including diamond trading. Governed by the Jebel Ali Free zone Authority, it comprises huge and excellent manufacturing units and a retail center along with warehousing facilities.
Worth mentioning, GDP boasts 350 offices and retail shops and 118 manufacturing units, all of which are involved in trading, retailing, and manufacturing of gold and precious stones.
This zone offers advantages such as allowing the employment of foreign expats as your employee, 100% ownership, low corporate taxes, hallmarking facility from Dubai Municipality, making it one of the captivating spots to open a gold trading company. Further, it also recently began leasing premium commercial leasing to entrepreneurs looking to trade in gold.
To be noted that GDP proposes different license options with each of these licenses having to be obtained from specific authority depending upon the option you have selected. These include of:
- Trading License
- Manufacturing License
- Retail License
- E-commerce License
- Service License
Dubai Mainland – Gold Souk
You also have the option of setting up your trading business on the Mainland. The main advantage here is that it is strategically located, offers you more retail space, no VAT and profit tax, and no minimum capital requirement along with permitting you to perform your business in any part of the UAE.
And well, if you decide to set up your gold trading business in Mainland Dubai, then undeniably the top location for you is ‘The Gold Souk Market’. Abode to around 300 retailers, the key benefit for setting up your business here is that local people will be your target market and you will be directly able to sell to them. Moreover, the area around is well-known for import and export, so if you are interested in trading of other kinds, this is indeed a great option.
A business set up in Mainland offers investors to have 49% ownership of the company while the other 51% is owned by a Dubai local partner.
Acquiring your business license
The most important step in opening a gold trading business is to obtain a valid gold trading license in Dubai which will give you the authority for running your business in Dubai. Depending upon the nature of your business activity and area selected, you need to apply for trade licenses.
So, if you are setting up your gold trading company on the mainland, apply directly to the Department of Economic Development. If you have decided to conduct business in GDP, Jebel Ali Free Zone Authority is the license issuing authority. And for a free zone, you need to make your application directly to the managing authority of your chosen free zone.
The licensing structure varies and is dependent on the business activity your company decides to undertake.
Applying for your gold trading company license
In all the cases, 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 notarised MoA or LSA agreement
- Tenancy or Lease agreement (if any)
How to start a gold trading business in Dubai?
Before submitting an application to the requisite authorities, you need to ensure that you have undertaken the following steps:
- 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:
To start a gold business in Dubai free zone can require minimum cost AED 150,000 along with rent to gold park management. This criteria is only applicable for free zones.
You also need to give 15% of yearly unit rent which shall be a refundable deposit. It is worth noting that this does not include the maintenance fee.
- 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
After receiving your gold trading license in Dubai, you need to open your corporate bank account for conducting financial transactions and payments.
Benefits of investing in gold trading business in Dubai?
It’s good to have a cautious approach before selecting the business type or structure because rolling back is quite expensive. Here are a few reasons that make the gold trading business in Dubai risk-free and highly profitable:
1. Location benefit
Foreign investors can choose to start a gold trading business in Dubai either in the suitable free zones or in the Dubai mainland. Gold exchange markets such as Dubai Gold Souk provide various perks to businesses in the mainland and facilitate hassle-free forex gold trading in Dubai. There are various benefits associated with these free zones depending upon the zone in which you decide to penetrate. DMCC & Dubai Gold and Diamond free zones offer numerous advantages. They are:
- Exemption of tax on imports and exports
- Zero percent corporate and personal taxes
- Safe and secure
- 100% return of invested funds and profits earned
- Shuttle transport for consumers
2. Advantage from tourism
Dubai is a prime tourist destination, and this offers a plethora of opportunities for gold businesses. People like to visit Dubai for gold shopping, and Dubai Gold Souk is a major attraction for the people. It has got displays of beautiful gold ornaments that anyone can get curious about. A large number of gold retailers and creative designers for gold jewelry have strengthened the online gold and diamond business in Dubai.
3. VAT on gold trading
Dubai provides a lot of benefits to the gold trading businesses and owners of a gold trading license in Dubai. The market is so vast that people come from various corners to select the gold ornaments and jewelry from Dubai. Furthermore, the region also offers gold products at a relatively lower gold price than other parts of the world. It’s because of the VAT exchange mechanism.
According to this mechanism, listed and registered manufacturers don’t charge VAT from other dealers who plan to resell or manufacture gold products. Though VAT is charged from retail customers, the rate is very low (5% of the purchase value).
4. Liquid asset
Gold is a liquid asset which implies that it can be converted into cash easily. It makes the gold business less risky. You can convert some of your gold into cash in no time during the emergency period. This property of gold makes it different from other types of businesses as it doesn’t affect the liquidity of the firm significantly. This is one of the major reasons why people prefer investing in gold.
What documents are required?
Here’s the list of documents required for the registration of 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 passport of the shareholders
- Proof of trade name
- Initial approval proof
- Notarized memorandum and articles of association
- Tenancy contract
- Lease agreement
Connect with Shuraa Business Setup
Planning to start your gold trading company in Dubai! Opening a gold trading company in Dubai can certainly be a profitable venture for you. Though this is only possible with the right amount of planning and execution. Moreover, for an expat investor, the process may seem to be quite challenging as it involves a lot of legalities. Hence, if you have plans to start a gold trading business in Dubai, then contact Shuraa Business Setup now. Our team of experts are well-versed with all the necessary formalities. From planning to eventually setting up your gold trading company in Dubai, leave the task to us.