They say diamonds are a girl's best friend and gold is the best gift. As the gold economy strengthens the world over, Dubai economy is also shining, thanks to the gold and diamond industry.
Suppose you are a budding entrepreneur who is eying the jewellery industry or a well-settled businessman who wishes to expand their business. In that case, business setup in the Dubai gold market is your chance.
Dubai Company Formation - Strong Gold-Led Economy
In Dubai, the gold industry began thriving in the 1940s due to free trade policies that encouraged traders from worldwide to set a base here. Today gold and diamond trading are one of the leading imports in Dubai. In the first quarter of 2016, gold dominated imports in the non-oil category. Gold Imports worth Dh 24.4billion or roughly 15% of total non-oil trade.
Gold Trading Business in Dubai
The first thing you must do before starting a gold trading business in Dubai is to understand the place from where you want to operate. There are three main options –
- DMCC Free Zone
- Diamond and the gold park
- Dubai Mainland
The Dubai Multi Commodities Centre Freezone is unique in Dubai. It serves the whole gold value chain, from R&D and refining to trading and investing. The DMCC offers the Dubai Gold and Commodities Exchange (DGCX), DMCC Trade flow, a trade finance product, and the Dubai Good Delivery Standard, a standard for 1kg gold bars of .995 purity.
Company Setup Process in DMCC Freezone
- Pre-Approval – This stage includes registering a name reservation form to DMCC. This normally takes 5 to 7 working days. The authorities make a reservation of the company's name while DMCC can carry out due diligence of the investors.
- Company Registration – Once DMCC does the preliminary due diligence, the investor is required to submit the required documents necessary for registration within six weeks. These include a pre-approval application form, passport copy, proof of residence, NOC certificate, and other such documents.
- Company Licensing– In this final stage, once the registration is complete, the tenancy contract is required to be submitted. After that, you can receive your gold trading license and begin trading gold within the DMCC free zone or outside the country.
Dubai Gold and Diamond Park
If you are not a big fan of the traditional gold market setup, look no further than the Dubai Gold and diamond park. Home to around 90 retailers in a commercial complex located Sheikh Zayed Road on Umm Suqeim. It is fully air-conditioned multistoried with retail shops, offices and manufacturing blocks. It has been upgraded to 118 manufacturing blocks and commercial office space to no less than 350 offices under current expansion plans.
Company Setup in Gold and Diamond Park Dubai
- After paying for the rent of the office space being leased, a contract agreement should be acquired from the Gold & Diamond Park.
- Once you acquire the lease agreement, apply for a JAFZA license at the Jebel Ali Office.
- On receipt of your application, together with documents like agreement of partnership and copy of lease contract, the Jebel Ali Free Zone authority will grant you your license for gold trading.
If you decide to set up your gold trading business in Dubai Mainland, the Gold Souk market is the best location to opt for. You can sell directly to the public here. Who hasn't heard about the gold souk? Often a checklist item in travellers exploring the Dubai streets, the Dubai Gold Souk has been a famous and known destination of gold buyers. Gold Souk is a traditional gold market in the heart of the commercial district in Deira. It is home to around 300 retailers who exclusively trade in jewellery.
It has been said that up to 10 tons of gold are present in the gold souk at any given time! This clearly shows the potential of the gold business setup in Dubai. The demand for gold comes from countries like India, Iran etc., and shoppers from all around the world flock to Dubai to buy that enchanting piece of jewellery.
Benefits of Opening a Gold Business in the UAE
- 100% ownership: There are many types of companies that can be incorporated under Dubai laws. Contrary to the Limited Liability Company (LLC) clause, where your stake as a foreigner is limited, you get 100% ownership on your business under Free zones. Under Dubai Free zones laws, a single individual can set up the business and rope in maximum benefits of the business.
- 100% repatriation of capital and profits: All the profits incurred from business activities can be pulled back into the business as capital without paying any taxes.
- Exemption on corporate tax
- Exemption on income tax
- 24/7 operational facilities Giving the business owners benefits of an 'always open' business
- Workforce: Expatriate workers can be easily hired with minimum paperwork and maximum government assistance.
- Easy access to all supporting business facilities: no matter what business function you choose, you would have supporting functions at your disposal at all times.
- Central air conditioning: no worrying about the Dubai heat, with centralized AC complexes
- Tastefully build work environment with exhaust, ventilation systems, and acid waste disposal system
- Secure at all times: Given the discreetness and security requirements of the gold business, business owners are provided with 24/7 security personnel. Besides hi-tech video surveillance, fire alarm system etc. is installed in all units.
- The Dubai municipality soon launched hallmarking for all gold manufactured and sold from Dubai Gold and Diamond Park.
- Shuttle services in and around the complex.
- World-class retail centre facilities for business people, to service gold buying shoppers.
Other add-on benefits are ample tenant parking, a high tech building management system, flexible leasing option from 1-5 years. The office spaces range from 310 sq. ft. to 14000 sq. ft.
Documents Required to Setup a Gold Trade Business in Dubai
Documents required for registration of gold business in UAE -
- Valid passport copies of the shareholders
- Updated resume of the manager of the business
- Proof of trade name
- Proof of initial approval
- Notarized memorandum of association and article of association
- Notarized and attested power of attorney for legal representation of any
- Lease agreement
- Minimum capital requirement: In the case of Dubai local company, this requirement does not apply. In the case of the free zone, the minimum authorized capital of AED 150,000 is required. You are also required to submit rent to gold park management and 15% of annual unit rent as a refundable deposit. This is not inclusive of the maintenance fee. In addition to the above, you may also need to pay other licensing and permit fee to the government body depending upon the type of activity you will be undertaken in a gold business setup.
The gold business setup is a lucrative business opportunity. Every year the Dubai government celebrates the Dubai shopping festival, which is a shopper's paradise for all things glittery! After the oil industry, the government is looking at other industries to drive foreign capital. And the trends are pointing at the jewellery industry.
How can we help?
For the uninitiated, the process may seem tedious, and they may need some hand-holding by professional business consultants in Dubai. We at Commitbiz are here to assist you from start to end.
If you are interested in exploring this opportunity, contact us today, and we will be glad to assist you on all professional fronts.