Gems and minerals trading in Dubai is a significant industry that involves large-scale companies and individual traders. The process entails buying and selling various gemstones and minerals worldwide, including diamonds, emeralds, rubies, sapphires, gold, silver, and other precious metals. These materials are extracted from mines or sourced from deposits, sorted, cut, polished, and prepared for sale. Trading occurs through different channels, such as direct transactions, auctions, online marketplaces, and trade shows. The industry is regulated to ensure authenticity, ethical sourcing, and mining and environmental standards compliance.
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 gemstone trading involves the purchase and sale of gemstones in bulk quantities. You can act as an intermediary between gemstone producers and businesses within the jewelry industry. As a wholesale trader, you can directly source gemstones from their origins and distribute them to retailers and manufacturers. This facilitates the supply chain and ensures a steady flow of gemstones to create jewelry products.
Inclusions
Besides 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
Your Wholesale of Precious Stones trading license explicitly excludes specific activities. The restricted activities include the collection of household and industrial waste and treating waste that is not intended for further use in an industrial manufacturing process but is meant for disposal. Additionally, the processing of waste and scrap, as well as other articles, into secondary raw materials is not covered by your license, unless a genuine transformation process is involved. This genuine transformation process should result in secondary raw materials suitable for direct use in industrial manufacturing but not as final products. Additionally, your license does not permit dismantling of automobiles, computers, televisions, and other equipment for material recovery. It also excludes the mechanical shredding of cars, ship-breaking activities, and retail selling of second-hand goods.
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 buying and selling gold, silver, diamonds, gemstones, and luxury watches. You can serve a diverse customer base with your business in this sector. This includes local customers who are interested in traditional designs as well as international visitors who are 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 your 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
To apply for a Wholesale of Precious Stones (4669.07), Jewellery Trading (4773.11), or Pearls & Precious Stones Trading (4773.12) license in Dubai, it is crucial to obtain additional approval from the Security Industry Regulatory Agency (SIRA) before you get a license. This third-party approval is essential to ensure your business complies with specific security measures and protocols. SIRA approval is mandatory to meet all the required security standards for your business. Additionally, you will need approval from the Dubai Police 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 enhanced visibility for your gold trade activities in Dubai. Furthermore, it guarantees that your facility meets security standards when establishing operations for trading precious commodities. The trading license approved by SIRA is issued with a specific validity period to ensure compliance with regulatory requirements.
With our extensive network and affiliations with ministries and government entities throughout the UAE, we can facilitate the process of obtaining 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 smooth and efficient company formation process for your venture.
Anti-Money Laundering (AML) Compliance Regulations
Your business operations, specifically the Wholesale of Precious Stones (4669.07), Jewellery Trading (4773.11), or Pearls & Precious Stones Trading (4773.12), are required to comply with Anti-Money Laundering (AML) 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.
Due Diligence Regulations for Responsible Sourcing of Precious Metals & Precious Stones
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:
- Establishing a robust company management system
- Identifying and assessing risks in the supply chain
- Designing and implementing a strategy to address identified risks
- Conducting independent third-party reviews of the refiner’s due diligence practices
- 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.
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 Precious Stones (4669.07 ) license, Jewellery Trading (4773.11) license, or Pearls & Precious Stones Trading (4773.12) license 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.
Importing and Exporting Precious Stones
Dubai enforces specific guidelines and regulations about importing and exporting gold, pearls, and precious stones. As a general rule, the following points are important to remember:
- Licensing and Registration: To engage in the import or export of gold, pearls, and precious stones in Dubai, it is imperative to possess the necessary licenses, approvals, and registrations. The specific requirements may vary depending on the nature and scale of your trading operations.
- Customs Declarations: When importing or exporting gold, pearls, and precious stones, it is mandatory to declare them. This involves presenting a commercial invoice, packing list, certified origin certificate, and any other relevant permits or certificates as required.
- Quality and Certification: Dubai maintains stringent quality control measures for imported and exported jewelry, including gold, pearls, and precious stones. These products must adhere to international standards and be certified by appropriate organizations to ensure their authenticity and quality.
- Customs Duties and Taxes: Importing and exporting gold, pearls, and precious stones may be subject to customs duties and taxes. It is crucial to have a comprehensive understanding of the applicable rates and regulations to accurately calculate and account for these costs in your trading activities.
- Compliance with International Trade Laws: Dubai adheres to international trade laws and regulations, including those established by the World Trade Organization (WTO) and international conventions related to the trade of endangered species. Compliance with these laws is crucial to avoid legal issues or penalties.
- Ethical Considerations: When trading pearls and precious stones, ensuring ethical sourcing practices is vital. Dubai has implemented responsible sourcing initiatives like the Kimberley Process for conflict-free diamonds. Familiarize yourself with these initiatives and ensure your trading activities align with ethical standards.
