How to Start Gold & Diamond Trading in Dubai with Meydan Free Zone?

Harsh Drolia

Harsh Drolia

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Dubai is known as the “City of Gold” and offers diverse gold products. In addition to hosting diamond exchanges and events, it has become a significant player in the global diamond trade. Hence, there is a great deal of potential in gold and diamond trading in Dubai. The city provides a robust trading infrastructure, serving as an international trade hub and offering support services.

4662.04 Wholesale of Gold and Other Precious Metals 

Apply for a business license under the Wholesale of Metals and Metal Ores and choose business activity Wholesale of Gold and Other Precious Metals with activity code 4662.04.

Wholesale refers to the buying and selling of gold and other precious metals like diamonds in large quantities for commercial purposes. This involves the purchase of precious metals by wholesalers directly from producers or suppliers and the purchase of precious metals by other businesses or entities.

You can act as an intermediary in the supply chain as a gold and other precious metals wholesaler. The wholesale trade of gold and other precious metals involves several activities, including sourcing metals from mines or refineries, quality assessment, and verification, storage and transportation logistics, and negotiating sales contracts. You can purchase these metals and distribute them to gold and other precious metal dealers, manufacturers, jewelers, investors, and other businesses. Depending on market demand and customer requirements, you may offer a range of products, such as gold bars, bullion, coins, ingots, or other precious metal products.

You can include jewelry manufacturers, financial institutions, investment firms, central banks, electronic manufacturers, and other businesses that utilize these metals for manufacturing, investment, or industrial purposes.

Inclusions

Your business license from Meydan Free Zone allows your company to engage in the wholesale trade of various types of metals and precious metals, specifically focusing on gold and other precious metals. Here’s an overview of what the license permits:

  • Wholesale of Ferrous and Non-Ferrous Metal Ores: You can engage in the wholesale trade of metal ores, both ferrous (containing iron) and non-ferrous (not containing iron). 
  • Wholesale of Ferrous and Non-Ferrous Metals in Primary Forms: This involves the wholesale trade of metals that have undergone primary processing and are in their basic or primary forms. Examples include the wholesale trade of iron bars, aluminum sheets, copper rods, etc.
  • Wholesale of Ferrous and Non-Ferrous Semi-Finished Metal Products N.E.C.: N.E.C. stands for “not elsewhere classified.” You can engage in the wholesale trade of semi-finished metal products that don’t fall under specific classifications. You can include unfinished metal components, intermediate products, or other metal products requiring further processing.
  • Wholesale of Gold and Other Precious Metals: This permits you in the wholesale trade of gold and various other precious metals such as silver, platinum, palladium, and others. These metals have high economic value and are often used in jewelry, industrial applications, investment products, etc.

You can use this license to operate within the specified activities outlined and trade these metals and precious materials in the wholesale market.

Exclusions

Your business license does not cover the wholesale trade of metal scrap. In other words, your license does not permit you to engage in the wholesale trade of discarded or waste metal materials. 

4669.07  Wholesale of Precious Stones

Apply for your trading license under wholesale of waste and scrap and other products n.e.c. (not mentioned elsewhere) and choose business activity Wholesale of Precious Stones with activity code 4669.07.

Wholesale of precious stones trading involves buying and selling gemstones in large quantities. You can serve as a link between gemstone producers and businesses in the jewelry industry. You can procure jewels directly from sources and supply them to retailers and manufacturers.  

Inclusions

In addition to the wholesale trading of precious stones, your trade license for wholesale of waste and scrap and other products n.e.c. (not mentioned elsewhere), encompasses the wholesale of various products. This includes industrial chemicals such as aniline, printing ink, essential oils, industrial gases, chemical glues, colorants, synthetic resin, methanol, paraffin, scents, flavorings, soda, industrial salt, acids, sulfurs, starch derivatives, and more. The license also covers wholesale trade in fertilizers, agrochemical products, plastic materials, rubber, textile fibers, paper in bulk, metal and non-metal waste, and scrap for recycling, as well as materials for collecting, sorting, separating, packing, repacking, storing, and delivering. However, it does not involve a process of real transformation. Furthermore, your license permits dismantling of automobiles, computers, televisions, and other equipment only to obtain reusable parts for resale. 

Exclusions

Certain activities are explicitly excluded from your Wholesale of Precious Stones trading license under wholesale of waste and scrap and other products not elsewhere classified (n.e.c.). These exclusions include the collection of household and industrial waste and the treatment of waste not intended for further use in an industrial manufacturing process but for disposal. Additionally, the processing of waste and scrap, and other articles into secondary raw materials is excluded unless a genuine transformation process is involved, resulting in secondary raw materials suitable for direct use in an industrial manufacturing process (but not as final products). Furthermore, your license does not cover dismantling automobiles, computers, televisions, and other equipment for material recovery. The shredding of cars using a mechanical process, ship-breaking, and the retail sale of second-hand goods are also not included within the scope of your license.

4773.11 Jewellery Trading

Apply for your business license under Other Retail Sale of New Goods in Specialized Stores and choose business activity Jewellery Trading with activity code 4773.11.

Jewelry trading in Dubai involves the buying and selling various types of jewelry, including gold, silver, diamonds, gemstones, and luxury watches. Your business can cater to a diverse customer base, from locals looking for traditional designs to international visitors seeking contemporary and luxury pieces.

Inclusions

With your Jewellery Trading license under Other Retail Sale of New Goods in Specialized Store, you can offer a wide range of retail services. Your license enables you to engage in various retail activities, including selling photographic, optical, and precision equipment. You can also provide services related to opticians and offer a diverse selection of watches, clocks, and jewellery.

Moreover, your license extends to cover additional retail offerings. For example, you are authorized to sell flowers, plants, seeds, fertilizers, pet animals, and pet food. Additionally, your store can provide a variety of souvenirs, craftwork, and religious articles. You can also engage in the operations of commercial art galleries, showcasing artistic creations.

Furthermore, your license includes the retail sale of household fuel oil, bottled gas, coal, and fuel wood. You can also offer a range of cleaning materials for sale to our customers. Additionally, your services encompass the retail sale of weapons, ammunition, stamps, and coins. Your license also allows you to sell non-food products under the n.e.c – not elsewhere classified.

4773.12 Pearls & Precious Stones Trading

Apply for your business license under Other Retail Sale of New Goods in Specialized Stores and choose business activity Pearls & Precious Stones Trading with activity code 4773.12.

Pearls and precious stones trading involves buying and selling these natural treasures, including pearls, gemstones, and other valuable stones. You can source these materials, assess their quality, and sell them to wholesalers, retailers, and customers.

Inclusions

Your Pearls & Precious Stones Trading license allows you to offer a wide range of retail services under the other retail sale of new goods in specialized stores category. Your license enables you to engage in various retail activities, including selling photographic, optical, and precision equipment. Furthermore, you can offer optician-related services and showcase a wide selection of watches, clocks, and jewellery. In addition to these offerings, your license encompasses various supplementary retail services. For instance, you can sell flowers, plants, seeds, fertilizers, pet animals, and pet food.

Moreover, your store can provide customers with an assortment of souvenirs, craftwork, and religious articles. Additionally, you can engage in the operations of commercial art galleries, showcasing various artistic creations. Furthermore, your license enables you to participate in retail selling household fuel oil, bottled gas, coal, and fuel wood. You are also authorized to offer a range of cleaning materials for sale to your customers. Additionally, your services extend to retail selling weapons, ammunition, stamps, and coins. Lastly, your license allows you to sell non-food products classified under the n.e.c – not elsewhere classified.

Third-Party Approval- Pre License

Before applying for your Wholesale of Gold and Other Precious Metals (4662.04) license, Wholesale of Precious Stones (4669.07) license, Jewellery Trading (4773.11) license, or Pearls & Precious Stones Trading (4773.12) license in Dubai, you must obtain additional approval from the Security Industry Regulatory Agency (SIRA). This third-party approval is necessary to ensure the business adheres to specific security measures and protocols. SIRA approval is required to ensure your business meets all the required security measures. In addition, approval from Dubai Police is also required to install security systems within your establishment.

The Security Industry Regulatory Agency (SIRA) is the central authority overseeing the trading of precious commodities in Dubai. SIRA approval ensures access to a favorable market environment and increased visibility for your gold trade activities in Dubai. Furthermore, it guarantees that your facility meets security standards when establishing precious commodities trading operations. The trading license approved by SIRA is issued with a specific validity period, ensuring compliance with regulatory requirements.

With our strong network and affiliations with ministries and government entities throughout the UAE, we can expedite government approvals for your jewelry business. Our team of advisors maintains close working relations with the Department of Economic Development (DED) and other relevant government bodies in the UAE, ensuring a seamless and prompt company formation process for your venture.

Importing and Exporting Precious Stones

Dubai has specific guidelines and regulations for importing and exporting gold, pearls, and precious stones. Here are some key points to consider:

  • Licensing and Registration: To import or export gold, pearls, and precious stones in Dubai, you must possess the necessary license, approvals, and registrations. Your specifications may vary depending on the nature and scale of your trading activities. 
  • Customs Declarations: Gold, pearls, and precious stones must be declared during export and import. It is necessary to produce a commercial invoice, packing list, certified origin certificate, and any other required permits or certificates.
  • Quality and Certification: For imported and exported jewelry, including gold, pearls, and precious stones, Dubai has strict quality control measures. Products must meet international standards and be certified by appropriate organizations to ensure authenticity and quality.
  • Customs Duties and Taxes: Importing and exporting gold, pearls, and precious stones may be subject to customs duties and taxes. For correct calculation and accounting of these costs in your trading activities, you must understand the applicable rates and regulations.
  • Compliance with International Trade Laws: Dubai follows international trade laws and regulations, such as those set by the World Trade Organization (WTO) and international conventions on the trade of endangered species. Compliance with these laws is essential to avoiding legal issues or penalties.
  • Ethical Considerations: When trading pearls and precious stones, it is vital to ensure ethical sourcing practices. Several responsible sourcing initiatives have been introduced in Dubai, including the Kimberley Process for conflict-free diamonds. You should be familiar with these initiatives and ensure that your trading activities are ethical.

Due Diligence Regulations for Responsible Sourcing

The Ministry of Economy (MoE) in the UAE is responsible for supervising and regulating Designated Non-Financial Businesses & Professions (DNFBPs), which includes the Dealers in Precious Metals & Precious Stones sector (DPMS). This authority was granted to the MoE through Cabinet Decision No (3/1F) of 2019, along with its amendment Cabinet Decision No (28M/4F) of 2019. The MoE oversees DNFBPs operating within the country, including those in commercial free zones. In addition, it ensures compliance with Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) obligations under the relevant legislation.

Clause No (2) of Article (44) of Cabinet Decision No. 10 of 2019 on the Implementing Regulation of Decree-Law No. (20) of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organizations empowers the supervisory authorities to establish crime-combating regulations, instructions, and forms for the entities under their supervision.

The DPMS sector is classified as inherently “high” risk, with the Refinery sub-segment being identified as the highest risk. To address these risks, the MoE has taken various measures to enhance regulatory oversight and supervision of the DPMS sector.

The Due Diligence Regulations have been established to ensure refiners adhere to responsible sourcing practices for gold. Compliance with these regulations is a requirement under the existing AML/CFT legislation. By implementing these regulations, the MoE aims to supplement the existing Customer Due Diligence (CDD) requirements for gold refiners, thereby reducing the overall compliance burden and audit fatigue on these entities.

The regulations encompass a set of policies and procedures aimed at identifying and mitigating risks associated with the import of gold from conflict-affected and high-risk areas. These procedures follow the framework outlined by the Organization for Economic Co-operation and Development (OECD), which consists of the following five steps:

  1. Establishing a robust company management system
  2. Identifying and assessing risks in the supply chain
  3. Designing and implementing a strategy to address identified risks
  4. Conducting independent third-party reviews of the refiner’s due diligence practices
  5. Submitting periodic reports

From January 1, 2023, all entities covered by these regulations in Dubai are subject to audit requirements. Additionally, you must undergo a third-party review once every 12 months, commencing from the beginning of the review cycle. Upon completion of the review cycle, these reports must be submitted to the Ministry of Economy within 90 days. For a list of approved reviewers, please refer to the “Approved-Reviewers-List.pdf” available on ugd.gov.ae.

Anti-Money Laundering (AML) Compliance Regulations

Your business activities, the Wholesale of Gold and Other Precious Metals (4662.04), Wholesale of Precious Stones (4669.07), Jewellery Trading (4773.11), or Pearls & Precious Stones Trading (4773.12) are subject to Anti-Money Laundering (AML) compliance regulations. 

Precious metals and precious stones dealers operating in the UAE must adhere to specific obligations pertaining to Anti-Money Laundering and Combatting Financing of Terrorism (AML-CFT). These dealers are classified as Designated Non-Financial Businesses and Professions (DNFBPs) and are subject to the Ministry of Economy regulation. To comply with the regulations, these businesses are obligated to fulfill the following requirements:

  • Register for the GoAML platform.
  • Create, review, and update AML / CFT policies to mitigate the risks identified.
  • Appoint a Money Laundering Reporting Officer (MLRO) / AML compliance officer.
  • Provide AML-CFT training to the staff.
  • Maintain proper records and documents concerning all the above recommendations.
  • Identify and report suspicious transactions.

ESR & UBO Regulations

Specific regulatory requirements such as Ultimate Beneficial Ownership (UBO) and Economic Substance Regulations (ESR) are imposed by the government of Dubai to ensure transparency, prevent money laundering, and combat tax evasion. However, the Wholesale of Gold and Other Precious Metals (4662.04), Wholesale of Precious Stones (4669.07), Jewellery Trading (4773.11), or Pearls & Precious Stones Trading (4773.12) are not subject to these specific regulatory requirements.

Ultimate Beneficial Ownership (UBO) regulations typically require businesses to disclose the true beneficiaries or individuals who ultimately own or control the company. This information helps authorities track and prevent illicit activities by identifying individuals using businesses to hide their assets or engage in illegal transactions. However, since the wholesale trading of gold and precious metals is exempt from UBO requirements, the business owners or beneficiaries may not need to disclose this information.

Economic Substance Regulations (ESR) ensure businesses have a genuine economic presence in their jurisdiction. These regulations are meant to discourage the use of shell companies or entities solely created for tax optimization purposes. 

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