When Dubai is mentioned, their gold and diamond collection is one of the first things to come to mind because it is a trend in the emirate admin
. Referred to as the “City of Gold”, the place offers a cheaper cost of gold than most tourists’ home countries. Since Dubai is a popular international vacation destination, the influx of the wealthiest customers can be significantly considered if you want to start a gold business.
Indeed, gold is an investment in Dubai as it drives foreign capital in the country. Unknown to many, it is the most profitable business since the precious metals keep their value, and the demand has been continually working every year. While Dubai has historically been a hub for gold traders, they also continuously contribute a significant share in the gold trading business in the UAE. If you are an investor, you should definitely consider setting up a gold trade business in Dubai. If you are not sure how, this article will help you delve deep before the onset of your gold business. With more knowledge and understanding, you can start making a profit out of gold, even in different departments.
There are different authorities and jurisdictions that highly support gold trading licenses in Dubai. Most of them can be found in Mainland and Freezone. Although there are many, there are three jurisdictions that stand out in Dubai where the highest concentration of gold traders can be found.
First on the list would be the Gold Trading License in Dubai’s Department of Economic Development (DED), wherein the heart of the UAE’s gold market is established. This authority is how you incorporate a business in the most famous gold markets in the world, the Gold Souk in Deira. The mainland jurisdiction offers a local license via the DED if an investor opts to form a retail outlet in this area. They can have an opportunity for investors to open up a stall or even a kiosk in Dubai’s most popular tourist areas. Investors must keep in mind that before applying for another commercial license for gold business via the DED, they have to find a local partner who will hold 51 per cent of the shares in the company.
The second choice for setting up a gold trade business in Dubai would be in the Gold and Diamond Park located along Sheikh Zayed Road. If you are an expat wanting to own 100 per cent of the business, this place is perfect for you as it is a free zone company setup. You can own 100% of your company with no taxes and have total resettlement of profit. The Gold and Diamond Park is one of the most famous retailers of gold and jewellery with over 90 stores, 118 purpose-built manufacturing blocks, and 350 offices. It is a convenient spot in Dubai City Center, with convenient access to all areas. You can incorporate a gold business company in this area by getting a license from Jebel Ali Freezone Authority (JAFZA).
For a small business to grow into a big business, it needs a loan unless it has exceptional sales and profit margins. A small business owner has quite a few places where he/she can go with a loan request. Banks seem to be one of their options on most occasions. What these owners might not realize is that banks have recently developed a reputation for rejecting small business loans. It seems that banks are more interested in financing large businesses due to their benefits. A bank can come up with a variety of reasons to reject loan approval for a small business. Some of the common reasons are as under:
One of the barriers between you and the business loan is credit history. When you go to a bank, they look at your personal as well as business credit reports. Some people are under the impression that their personal credit does not affect their business loans. But that’s not always the case. A majority of banks look into both the types of credits. One of the aspects of credit that matter a lot to the banks is credit history. The length of your credit history can affect your loan approval negatively or positively.
The more information banks have at hand to assess your business’ creditworthiness, the easier it is for them to forward you the loan. However, if your business is new and your credit history is short, banks will be unwilling to forward you the desired loan.
You must be aware of the term high-risk business. In fact, lending institutions have created an entire industry for high-risk businesses to help them with loans, credit card payments, etc. A bank can look at a lot of factors to evaluate your business as a high-risk business. Perhaps you belong to an industry that is high-risk per se. Examples of such businesses are companies selling marijuana-based products, online gambling platforms, and casinos, dating services, blockchain-based services, etc. It is imperative to understand that your business’ activities can also make it a high-risk business.