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How to start a gold business in Dubai?

Start a gold business in Dubai
February 5, 2024

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Gold trading is one of the most lucrative businesses in the UAE during 2024. Meanwhile, Dubai is rightfully maintaining the title of the “city of gold” in the world. Many companies and ambitious people aim to start a gold business in Dubai to tap into the booming jewelry potential.

The gold industry adds around 20% to the total GDP of the UAE. Whereas, Dubai contributes the lion’s share, with Abu Dhabi and Sharjah following closely. The bustling gold sector incorporates more than 4,000 businesses, and countless professionals are directly engaging in multiple trades.

Several other companies are indirectly taking part in the trading of the precious gold metal. Also, there are hundreds of both local and expatriate investors in the gold and diamond industry of the UAE. Many business executives, and white and blue-collared workers are in this business as well.

Categories of gold businesses in Dubai

What are types of gold businesses in Dubai?

Globally, people consider gold as an essential asset, irrespective of their country of origin and culture. Similarly, companies tend to invest heavily in it, deeming that money conversion into gold is safe and secure. Entrepreneurs and foreign investors can start a gold business to reward from this luxury metal.

Gold is available in many forms, such as coins, bars, blocks, bullion, and jewelry. The various qualities of gold in purity are available for trade — 24K, 22K, 21K, and 18K. Moreover, the weight of the precious gemstones in carats is important as well.

You need to consider a variety of different things at the time of selling and purchasing gold. For example, weight of gold, charge of craftsmanship, quality control, wastage costs wherever relevant, VAT tax, etc. You can try your hand in the following different kinds of businesses in Dubai.

  • Sourcing and trading gold ore
  • Refining gold for jewelry production
  • Making elegant gold ornaments

Sourcing and trading gold ore

Surprisingly, the United Arab Emirates and Dubai do not have any gold mines of their own. The UAE was the 4th largest gold importer globally in 2021, with imports worth of $46 billion. Gold was number 1 among the goods shipments into the UAE in the same year.

UAE imports most of the gold from the African, Asian, European, and Latin American countries. Mali ($7.32B), Zimbabwe ($3.5B), Sudan ($2.82B), Niger ($2.68B), and United Kingdom ($2.46B) are the biggest gold sellers to the UAE. Companies participating in the gold mining abroad have begun the practice of “responsible sourcing”.

They restrict sourcing the metal from battle-ridden and politically unstable areas to avoid any likely financing illicit activities. Corporations and SMEs readily embrace the policy of ethical sourcing of precious metals on their freewill without the government enforcement. Gold companies are voluntarily signing up for certification that authenticates the bullion sourcing is ethical and responsible.

The UAE was the 2nd biggest exporter of gold, with exports worth of $32.8 billion in 2021. Gold exports were the 3rd largest among the goods delivery from the UAE. Switzerland ($7.47B), India ($7.03B), Hong Kong ($6.55B), Saudi Arabia ($2.96B), and Turkey ($1.52B) are the largest gold buyers for the UAE.

Refining gold for jewelry production

There are many investment and business opportunities available in the gold refining and gold-bar manufacturing business. Likewise, multiple companies are working in the jewelry crafting process. They include both local and international firms, whether they source the gold themselves or from different traders operating in Dubai.

The companies deploy all the newest and latest technologies to heighten their capabilities and increase the process efficiencies. After the refining process, pure gold advances through the supply chain. It includes many suppliers, distributors, whole-sellers, and gold retailers.

Making elegant gold ornaments

Gold is one of the notable means of the investment across the globe. Although, most of the gold is sold in its natural form. There are still numerous opportunities to invest in the gold and ornaments industry by applying fail-safe means.

Dubai Multi Commodities Centre (DMCC) free trade zone provides market infrastructure for global goods and precious products. Its subsidiary Dubai Gold & Commodities Exchange (DGCX) is empowering the community of 267 gold businesses and jewelers. Gold Standard DMCC, another organizations under DMCC maintains Dubai Good Delivery Standard (DGD) for Gold. It offers amenities and financial support to local, small, and foreign corporate investors.

Areas for opening a gold business in Dubai

Which are best areas to begin gold business in Dubai?

Companies who want to start a gold business in Dubai can choose a free zone if they trade globally. Or they can select mainland business setup in Dubai, if they have to trade onshore. These are the areas that you can consider for this purpose.

  • DMCC
  • Dubai Gold & Diamond Park

Gold Souks of Dubai

To start a gold business in Dubai mainland, consider these Gold Souks (traditional markets).

  • Deira Gold Souk
  • Mall of the Emirates Gold Souk
  • Dubai Mall Gold Souk
  • Al Fahidi Street Gold Souk
  • Dubai Marina Mall Gold Souk

Here we list the best gold souks of Dubai.

Deira Gold Souk

Start a gold business in Dubai for retail in the Deira Gold Souk. More than 300 gold retailers here are providing exquisite gold jewelry. Furthermore, it is better choice for wholesale trade of gold ornaments as well.

Advantages of investing in a gold business in Dubai

What are benefits of investing in gold business in Dubai?

A variety of Government and market benefits support businesses that are investing in the gold industry of Dubai.

Tap into tourism

Tourists from all around the planet flock to Dubai to spend their vacations in style. Dubai presents countless fabulous happenings and adventures for tourists, both local and foreign. Dubai is has gained the title of shopper’s paradise due to the abundance of shopping selections on offer in more than forty malls situated in Dubai. The Dubai Gold Souk is a famous tourist destination with glorious displays of gold ornaments honoring the artistic skills of Dubai’s goldsmiths. In the last few years, there is a surge in tourists visiting from the Asian continent who have been very enthusiastic about shopping for gold jewelry. The immense number of gold retailers, a diversity of craftworks in gold jewelry, and the minimal taxation and other advantages have made Dubai a hotbed for Gold shopping.

VAT on gold trading

Dubai is one of the famous and reliable markets for gold investments. Tourists, visitors, entrepreneurs, immigrants, and local residents never let go of an excuse to get the precious yellow metal. Gold adornments and jewelry are available at relatively lower prices in Dubai. There is a VAT exchange mechanism in place- according to which listed and registered dealers do not charge any VAT in the event of selling the Gold to another certified dealer as long as the latter plans to resell or manufacture those products. Nevertheless, the retail customers are still charged VAT at a low rate of 5% of the total estimated value of the purchased Gold.

Other perks

The advantages differ between the free zones where the market is going. DMCC and Dubai Gold & Diamond free zone give a plethora of perks to the gold sector. They include the following.

  • Tax exemption on imports and exports
  • No corporate and personal income taxes
  • 100% repatriation of invested funds and profits earned
  • Providing security
  • Hallmarking and
  • Shuttle transports for consumers.

Businesses working from the mainland, such as Dubai Gold Souk, which is a traditional gold exchange offer other compensations.

Conclusion

Dubai World Expo 2020 exhibition grew the revenues and earnings of all the sectors of the UAE economy. Many UAE based businesses are extending their operations after the mega event. In its subsequent aftermath, and continuing tourism to the UAE, gold businesses are thriving and jewelry trade is booming.

Professional business advisors can assist the entrepreneurs with setting up a business in the gold industry. These expert business setup consultants have years of experience in the field. They loyally help the clients by providing them with all the necessary legal information and necessary market insights.

In case of any queries, get in touch with KWS Middle East. Our specialists are more than happy to resolve your questions. They assist you in making decisions that are best for your business in the long run.

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