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company formation in Dubai
Foreign investors curious about starting a successful Jewelry business in Dubai or within the UAE can try the jewelry industry. Home to a number of the wealthiest individuals within the world and a world vacation destination, Dubai is that the perfect and safest place to line up a jewelry company. The government has created specific rules, regulations, and imposes checkups to those that bring gold or other precious metals which are sold within the emirate most famous gold market: Dubai Souk.
The UAE jewelry market is predicted to succeed in 12 billion dirhams by 2020. Dubai leads the UAE jewelry market as tourists find it cheaper than their home countries due to low taxes and an outstanding range of exquisite jewelry. On the wholesale front, Dubai exports its jewelry to 200 countries across the world. As the saying goes, not all that glitters is gold; jewelry is an industry that takes a considerable amount of planning and works to make it a success.
A jewelry business comes with certain industry-specific regulations, substantial competition, and cash flow issues to consider. It’s also not always a profitable business unless you manage to secure a line in some of the large retail outlets and jewelry houses. If you are dealing internationally, having the right channels alongside a trustworthy supply chain are essential. Dubai is that the perfect and safest place to line up a jewelry company. If you are interested in starting a jewelry business in Dubai, The company formation process is the first step to set it up.
Registering a Jewelry Business in Dubai
Foreign investors who want to determine a jewelry business in Dubai can register a corporation within the emirate or in one of its free zones. In case they decide for a free port, the Gold and Diamond Park free port is that the perfect place if we take into consideration its name. Apart from this, no local partner or sponsor is required when opening a jewelry business within the Gold and Diamond Park. Our company incorporation consultants in Dubai can assist in registering a business within the jewelry sector within the emirate within the free port.
The Dubai Multi Commodities Centre (DMCC) is the top choice for free zone incorporation. DMCC also provides its members with membership to the Dubai Diamond Exchange (DDE) and features a purpose-built facility referred to as the “Jewellery & Gemplex annex” within the Jumeirah Lakes Towers (JLT) area. DMCC has state-of-the-art facilities and offers products and services that directly support organizations in the jewelry sector to foster growth and facilitate trade.
As mentioned above, entrepreneurs can benefit from the numerous advantages the free zones offer, especially in Gold and Diamond Park Free Zone where it is recommended to register your jewelry business in Dubai. Once the name of your company has been established, besides preparing the documents, including the special licenses and permits obtained in this matter, one should consider the type of business he/she wants to deal with. For instance, you can sell imported jewelry, you can manufacture your own products if you have the precious metals or you can be a supplier of first-hand items.
It is not so easy to set up a jewelry business in the country or earn from it. You need to plan properly and make sure that you are registered. Once you make your way to international channels and form a supply chain, you will start profiting from it.
1. Get A License For Jewelry Business in Dubai
First of all, you need to decide how you are going to incorporate into the jewelry industry, through the rightful channels. There are two main options for you:
The DMCC or Dubai Multi Commodities Center is great for people who are looking for free-zone incorporation. People registered at the center have a membership of DDE or the Dubai Diamond Exchange. The benefit of setting up in the free zone is that you do not need local sponsors and you get 100% ownership of your business.
The second option is to get a license from the Dubai Department of Economic Development. After getting this license, you can set up a shop in the Gold Souk market and deal with customers directly. Or you can set international trade close to Port Rashid.
The legal procedure for getting a license in Dubai requires you to have a trading name. This is mandatory as it allows the government to see the kind of business you will be doing.
If you get a license for operating in one of the free zones, the jurisdiction can aid you in finding the premises for your business. You have to ensure that you have amenities like water and electricity.
In most cases, the DED requires you to hire a manager before your registration is done. In a jewelry business, you will need a manager, as per the DED’s requirements.
The Business Registration and Licensing (BRL) division in the Department of Economic Development (DED), reports that as of 2019, around 4000 companies operate in the jewelry and gold sector in Dubai with a local license. The most popular areas, which accounted for 46.5% of the total number of companies, are Al Dhagaya followed by Al Ras, Ayal Nasir, Burj Khalifa, Warqa Al Bateen, Al Muraqqabat, Port Said, and Al Rigga.
If your goal is to cater to the large tourist market, then getting a local license that permits you to set up shop in the Gold Souk or any of the commercial centers is the best option. Keep in mind though, as, with all local limited liability company licenses, you will need an Emirati national to have a 51% stake in the business.
If you opt to select DMCC for incorporation, the process is very straight forward. You will apply online via their dedicated company incorporation portal. The system is designed so that you upload all the documents electronically and are provided updates on an ongoing basis. You will visit the free zone to sign the company incorporation documentation
Both retail and wholesale of gold and other precious metals and jewelry are allowed in Dubai. Whether one decides to line up a stall within the Dubai Souk or in one among the various malls within the emirate, one must take into consideration the wants related to the quality of the materials used to create the jewels.
jewelry companies setup in Dubai can also import or export precious metals or ready-made jewelry which must first pass the inspection procedures imposed by the Gold Office in UAE. In order to try to that, a Dubai company must obtain a customs code number.
First of all, the standard of the metals sold in Dubai is legendary everywhere the planet, therefore a jewelry company will never complain about the shortage of consumers. However, starting a jewelry business in Dubai has another great advantage: no value-added tax is going to be imposed on the sale of gold
A businessman who wants to generate easy money in a profitable industry like jewelry should focus on the quality of the products. Once the Gold Office in Dubai has approved your items, whether they are imported or manufactured by your company, and issued your customs code number, it is suggested to set up a marketing plan and start promoting your business.
Besides an appropriate place for your shop, in Dubai Souk, the most important gold market within the Emirates, or within the malls, a jewelry company must align with the trends on the market and needs to identify with innovation and top quality, in order to be one step ahead in this important deluxe industry. We remind that Dubai is well-known for the standard of jewelry on the market, which is why numerous tourists become regular clients whenever they visit the Emirates.
Benefits of starting a Gold Business in Dubai: the way to start a jewelry store in Dubai
100% ownership: There are many sorts of companies that will be incorporated under Dubai laws. Contrary to the indebtedness Company (LLC) clause where your stake as a foreigner is restricted, under Free zones, you get 100% ownership on your business. Under Dubai Free zones laws, one individual can found out the business and cord in maximum benefits of the business.
100% repatriation of capital and profits: All the profits incurred from business activities can be pulled back in the business as capital without having to pay any taxes.
Exemption on income tax: 24/7 operational facilities Giving the business owners benefits of an ‘always open’ business
Workforce: Expatriate workers can be easily hired with minimum paperwork and maximum government assistance.Easy access to all supporting business facilities: no matter what business function you choose, you would have supporting functions at your disposal at all times.
Central air conditioning: no worrying about the Dubai heat, with centralized AC complexes. Tastefully build work environment with exhaust, ventilation systems, and acid waste disposal system
Secure at all times: Given the discreetness and security requirements of the gold business, business owners are provided 24/7 security personnel. In addition hi-tech video surveillance, fire alarm system, etc are installed in all units.
Jewelry Business Soon to be launched hallmarking by Dubai municipality for all gold manufactured and sold from Dubai gold and diamond park.
Minimum capital requirement: just in case of Dubai local company, this requirement doesn’t apply. In the case of Freezone, jewelry business the minimum authorized capital of AED 150,000 is required. You are also required to submit rent to gold park management and 15% of annual unit rent as a refundable deposit. This is not inclusive of maintenance fees. In addition to the above, you may also need to pay other licensing and permit fees to the government body depending upon the type of activity you will be undertaken in the gold business setup.
Impact of VAT on Gold Industry in UAEMore than 180 nationalities living within the UAE prefer to shop for gold in Dubai instead of their own countries as Dubai’s gold has worldwide been related to purity, quality, pricing, and last but not the smallest amount wide selection of variety at its offering. The industry experts, on the opposite hand, are bullish on the general scenario and outlook of the industry post VAT era also. While ruling out any major impact of VAT, retailers and consumers say that gold may be a commodity that has great value, and other people like it better to invest in.
The VAT (value-added tax) on gold Jewelry will likely apply to the entire piece, which effectively means an additional payout of Dh7-Dh8 a gram at today’s prices, according to industry sources. The decision to include gold Jewelry under VAT is spelled out in the Executive Regulation governing the application of value-added tax in the UAE.
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