Dubai has long established itself as a traditional Middle Eastern trading market due to its strategic location connecting the eastern and western continents. Spices, pearls, textiles, and traditional homewares are among the various products traded in Dubai’s market. Dubai is also a major market for precious metals like gold, silver, and diamonds. Because of the thriving industry involved in the selling of valuable yellow metal, Dubai is known as the ‘City of Gold.’
Investing in any product or financial instrument in the current global market scenario may result in business uncertainty. When investing in a commodity, investors want safe investments that ensure a return on their investment. Investing in the gold business is one such asset that has piqued investors’ interest. Dubai’s gold market has proven itself to be low-risk and high returns over the years, making it one of the most profitable sectors of its trading market.
So, if you are a new businessman who is interested in the profitable gold industry or an established businessman who wants to expand his firm, then the Dubai gold market is the place to be.
The gold business in Dubai began to grow in the 1940s as a result of a change in trade policies. The new policies made the trades tax-free and profitable which drew traders from all across the country to set up shop here.
Gold and diamond trading is now one of Dubai’s most important imports. In the first quarter of 2016, gold was the most popular non-oil import. Gold imports totaled Dh 24.4 billion, accounting for nearly 15% of total non-oil commerce.
The Dubai Gold Souk has become a famous destination for gold buyers, as well as a must-see for visitors visiting Dubai’s streets. The Gold Souk is a well-known gold market in the commercial center of Deira. It is home to around 300 jewelers who specialize solely in jewelry.
A huge some of gold is traded in Dubai on regular basis. Up to 10 Tonnes of gold are estimated to be present in the gold souk at any given moment. It exemplifies Dubai’s gold industry setup’s potential. Gold is in high demand in countries like India and Iran, and buyers from all over the world go to Dubai to get captivating pieces of jewelry.
Dubai, popularly known as the “City of Gold” in the global gold industry is still one of the major trading hubs in the world, with a long and illustrious history. The gold investment company in Dubai is a beneficial technique for investors to make good money. It provides investors with a variety of options in which they can earn a healthy return on their investment. Let’s look at why investing in Dubai’s gold business is a good idea.
City of Gold Dubai
As Dubai has established itself as the “City of Gold”, it is the go-to place to set up a gold business. Investing in the gold market is one of the most lucrative business opportunities available in Dubai. The industry provides about 20% of the UAE’s GDP, with Dubai accounting for the majority of it. The vibrant group is made up of over 4,000 enterprises that are directly involved in various precious metal trades. Thousands of investors are involved in the gold and diamond industry.
Many people, regardless of culture, consider gold as both an investment and a means of defense. For trading, it is accessible in the form of coins, bars, bullions, and jewelry. Gold carats of 24k, 22k, 21k, and 18k are available for dealing. The weight of gold, the quality fee, waste charges (if applicable), and VAT tax are all fees associated with gold retail transactions.
Business Opportunities in Dubai Gold Industry
Investors who are looking to take advantage of Dubai’s profitable gold market should take a look at the following sectors.
Exchange and Procurement
Dubai and its partner Emirates are not gold-rich nations which means they do not have natural gold reserves so there are no commercial gold mines. Since countries from the African and Latin American regions are rich are natural gold reserves, most of the gold is imported from them. Companies have also embraced the ‘ethical sourcing’ strategy, which restricts the acquisition of metal from conflict-affected and high-risk areas that support illicit operations. DGCG and MCC free zone enterprises have already implemented the ethical sourcing policy.
More businesses are registering for certification that verifies the bullion used in a responsible and ethical manner. Gold accounts for a larger share of products imported into the UAE, accounting for almost 14% of total imports in 2014.
The gold refining and technology sector is home to a multitude of businesses. They include both domestic and international enterprises that import gold themselves or from various Dubai vendors. Businesses are utilizing the most up-to-date technologies in order to improve their capabilities and operational efficiencies. The gold goods created and assembled will transit through the chain, which includes several wholesalers, distributors, and gold merchants.
Investments and Funding
For obvious reasons, gold is a fantastic investing tool. While the majority of retail gold is sold in physical form using failsafe methods, there have been various opportunities to invest in electronic items in recent years. To provide market infrastructure for global commodity trade, the government established the Dubai Multi Commodities Centre (DMCC) free zone. Facilities and financial products are provided by DMCC organizations such as the Dubai Gold Delivery Standard (DGD) and the Dubai Gold & Commodities Exchange (DGCE).
Advantages of Investing in Gold Business in Dubai
Companies are investing in the gold sector to take advantage of a number of government and industry incentives.
VAT on Gold
Dubai is a well-known gold-buying destination. Tourists, immigrants, and residents never pass up the opportunity to purchase the precious yellow metal. Gold ornaments and jewelry are accessible in Dubai at significantly reduced prices. A VAT reversal charge system is in place, which means that registered dealers do not have to charge VAT when selling specific items to another registered dealer who intends to resell or create them. Retail customers, on the other hand, pay VAT at a flat rate of 5% of the gross value.
Gold, diamonds, and other precious metals are traded for the lead on a variety of exchanges. Companies can opt to launch their business in either the free zones or on the mainland of Dubai. The benefits vary depending on which zones the company works in. Tax exemptions on imports and exports, no business and income taxes, 100 percent repatriation of cash, as well as consumer protection, ambiance, Hallmarking, and shuttle transportation are all available through DMCC and Dubai Gold & Diamond free zones. Companies like Dubai Gold Souk, a traditional gold market, operate from the mainland to provide additional benefits.
Gold is a popular decoration material. Gold is regarded by the people as a symbol of affluence and prestige. In numerous ways, the utilization of opulent lifestyles is symbolic. The other main local clients in Dubai are expatriates from various countries who are employed and looking to save money. Citizens of the Indian subcontinent are an important element of expatriate culture, and gold has always played a vital role in all subcontinent people’s events, making them ideal consumers. These benefits, together with cheap taxes, have sparked a lot of interest in gold mining enterprises in the local market. Locals and expatriates alike spend their savings on gold-based financial products.
Dubai is one of the most popular tourist destinations zones. Tourists from all over the world visit Dubai to spend their vacations. Dubai provides guests with a wealth of exciting encounters and adventures. Dubai is recognized as a shopper’s paradise due to the variety of shopping opportunities available in more than 40 malls. The Dubai Gold Souk is a prominent tourist attraction with magnificent exhibits of artistic abilities and a love for gold crafts.
In recent years, there has been an increase in visitors from Asian countries who are eager to purchase gold jewelry. Dubai has become a popular gold shopping destination due to a huge number of gold stores, a diverse assortment of gold jewelry craftworks, and tax and other benefits.
Investing in gold provides low-risk investors with the ideal opportunity since gold is one of the greatest investment options in an unpredictable economic climate. It is also a very important part of the portfolio in the Dubai forex market.
Protection from Risk
Gold is one of the most trusted commodities on the planet. During the global financial crisis, many investors turned to precious metals as a hedge against economic instability. While it is true that gold prices vary, investors can use gold to hedge against inflation if they are properly leveraged.
Gold investments in Dubai have a significant potential for profit and liquidity. Being a highly liquid asset is safer for gaining larger gold investing returns. Because of the tremendous liquidity of gold, an investor may sell it at any marketplace and make a profit if they understand the trading strategies and keep an eye on the demand.
Protection from Depreciation
Gold also guards against economic depreciation. Dubai gold investment is also one of the safest and most dependable solutions available, and it does not require any research. Gold prices, unlike other financial assets such as bonds, equities, and so on, typically move in opposing directions under certain scenarios.
The UAE has taken all of the necessary efforts to attract greater attention from business enthusiasts and foreign investors interested in opening a gold business in Dubai. Initially, continuing alone in an unfamiliar route may be troublesome, and investors intend to continue forward with the help of business specialists as they become more familiar with the legal proceedings and business establishment process.
How we can help?
If you’re looking to start your gold business or any other business in Dubai, UAE then just book a free appointment with us and we will assist you in every step of starting your new business. Do not hesitate to contact us.