Interesting facts:
Full versionIf one considers the fact that over 20% of the world volume of sales of precious metals is accounted for by Dubai, its rank of the "Golden City" is well founded. In a relatively short period of time, the government of the emirate managed to provide the most comfortable and safe environment for conducting commercial transactions in the field of precious metals.
Gold trading in Dubai offers the world's largest trading centers and jewelry retail venues. The main advantage is the UAE's very low tax burden: there is a corporate tax (9% on profits over AED 375,000) and a 5% VAT, with preferential rates available in some cases. Special rules apply to gold trading (for example, a reverse charge for investment gold in B2B transactions). Significant turnover and low tax rates significantly reduce the final cost of precious metals. Experts note that gold jewelry is sold in Dubai at comparatively low prices (35-40% lower than in countries such as India, the UK, or the US due to tax duties, incentives, and low processing costs). Both wholesalers and retailers can access all the advantages of selling gold in Dubai.
Clarify the cost of opening company, corporate or personal bank account, obtaining a residence visa, or another question regarding business in Dubai, UAE:
The Dubai metropolis offers specialized venues for the sale of luxury gold and jewelry. The choice of finished products is limited only by your capabilities and desires. Dubai annually attracts highly qualified personnel from around the world, significantly reducing the markup on finished products. For discerning buyers, custom orders are available. You'll receive an original product, unique anywhere in the world, in the shortest possible time.
In Dubai, both wholesale and retail gold trading are equally developed. The market offers bars of various weights (1 gram, 10 grams, 100 grams, 1 kg, etc.), standardized by the LBMA. It should be noted that pricing is determined by a small premium on the exchange price of the precious metal being sold. Gold is traditionally considered a safe haven asset, but its returns are dependent on market conditions and are not guaranteed.
As for the quality of the products sold, control is exercised by Dubai Municipality, the Emirates Authority for Standardization and Metrology (ESMA), and mandatory hallmarking. Mandatory quality standards apply equally to both small retail shops and specialized gold markets. Therefore, regardless of where you purchase gold, quality is guaranteed.
The concentration of pure gold in the overall alloy of products is expressed in karats. The final price of precious metals or jewelry depends on the weight, denomination of which is the gram. The gold price is determined by the international market (LBMA), and the Dubai Gold & Commodities Exchange is used for derivatives trading and hedging.
When planning to buy gold in Dubai, it is recommended to carefully review the list of specialized markets where you can find a profitable deal. These include the Gold Souk and specialized shopping centers such as Emaar Gold & Diamond Park. In addition to large markets, Dubai has a wide variety of retail outlets and shops. You can also visit our production facilities and place a unique order based on a private working sketch.
A Precious Metals Trading License is required to legally trade gold and other precious metals in the UAE. This LLC can be registered either in Dubai mainland, or by means of opening up in one of the free zones, such as DMCC (Dubai Multi Commodities Centre) where precious metals trading is allowed and some of the biggest international hubs.
A company will have to acquire a trading license permitting precious metals activity depending on the place of registration they pick and their operational model. It’s also essential to satisfy infrastructure-related regulations (an office/ flexi-desk for free zone companies). Another aspect to examine is the regulations surrounding the storage, transportation and accounting of precious metals.
Whether one wants to incorporate a company in mainland or free zone is determined by where the target market lies, whether you need to interact with local counterparties and what your corporate structure and operating model would entail.
Trading in gold and precious metals is seen as a high-risk financial activity subject to monitoring under anti-money laundering laws including UAE Federal Decree Law No. 20 of 2018.
Regulatory obligations under FATF — companies trading in precious metals are obliged to maintain comprehensive compliance procedures including customer KYC (knowledge your customer), counterparty due diligence, and monitoring of financial transactions. All firms are required to register as users of the goAML system and report suspicious transactions to the relevant authorities on an ongoing basis.
Besides, companies must keep all transaction records, and due diligence and internal risk control procedures. Non-compliance with AML requirements may lead to considerable administrative fines, suspension of licenses or other penalties, including criminal responsibility.
Free trade, including trade in precious metals, has become a major direction for the national economy of the United Arab Emirates. This particular attitude to private business has provided the inflow of direct investments and skilled professionals from all over the world. Even when a decline in sales of precious metals is observed in the world, the Gold Souk in the Emirates continues to gather steam and expand the international network.
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