Diamonds are forever – and they’re incredible investments, too. If you’re looking into how to start a diamond business in Dubai, you’ll know that this is one of the biggest diamond trading hubs in the world and is one of the best places to set up a company to trade quality diamonds.
So, let’s jump in. For this article, we’ll look into the following:
- Diamond business in Dubai and the UAE – An overview
- Diamond corruption policy in Dubai explained
- How to start a diamond trading business in Dubai
- Cost of starting a diamond trading business in Dubai
- Business setup in Dubai with Trade License Zone
Diamond business in Dubai and the UAE – An overview
Dubai and diamonds: this is a city that glitters and sparkles ever brighter thanks to these precious stones. It is a leader in diamond trading, and the quality of diamonds is unsurpassed. The United Arab Emirates (UAE) has grown the Dubai Diamond Exchange (DDE) into one of the world’s most significant diamond trading hubs.
The market in Dubai makes it the perfect place to buy diamonds, which is why so many businesses have set up offices in the city, and so many tourists shop for these precious stones here. A buyer can get up to 50% cheaper prices than anywhere else, thanks to the DDE and Dubai’s business-friendly regulations.
A thriving industry exists around diamond trading. There are many retail shops, jewellery manufacturers and designers, traders, service providers, diamond quality graders, valuators, and more.
Investors can choose to operate in either the Dubai Multi Commodities Centre (DMCC) and the Dubai Gold and Diamond Park by setting up their businesses in a Free Zone or Mainland, respectively.
Anyone seeking to start a diamond trading business in Dubai requires a diamond trading business license. This is part of the UAE government’s regulatory system for the diamond trading industry.
Diamond corruption policy in Dubai explained
The DDE follows the Kimberley Process Certification Scheme to combat the illicit trade of blood diamonds and diamond trade corruption. Introduced internationally in 2003, the Kimberley Process aims to bring transparency and regulation to the diamond industry by providing a Kimberley certificate to fair trade diamonds. This creates a secure and controlled diamond trading environment.
When the UAE instituted the DDE, it established a regulatory system that promotes financial transparency, supply chain traceability, cross-border trade and data collection transparency, and diamond certificates. This creates economic development, a sustainable industry, profitable business, and further diversifies the UAE’s economy.
Dubai and the UAE are also members of the World Federation of Diamond Bourses (WFDB).
The DMCC Free Zone is the only sanctioned trading zone in the UAE to import and export rough diamonds.
How to start a diamond trading business in Dubai
Step 1: Partner with Trade License Zone
The first step to opening a diamond trading company in Dubai is to partner with Trade License Zone. Our expert company formation specialists will help you manage all aspects of the business license application and company registration process and communicate with the relevant government and municipal authorities on your behalf.
Step 2: Select a company name
The UAE government has strict regulations on company names. Business names must not include offensive or blasphemous language or references to Allah or Islam, avoid names of well-known brands, and contain no abbreviations when using your name.
Trade License Zone will help you choose and register your diamond trading company name with the UAE’s Registry Office.
Step 3: Select your trade license type and business activities
Your trading license enables you to trade in diamonds in Dubai. Different business licenses are available – such as a manufacturing license, retail license, service license, e-commerce license, and national industrial license – but you will need to specify the business activities you wish to conduct. These will determine what type of trading license you can apply for.
The business activities you select are the only business activities you can carry out in the UAE. If caught conducting business without the correct business activities, you may face severe penalties from Dubai’s authorities.
For any help with this crucial step, contact Trade License Zone’s experienced staff to help you navigate this somewhat tricky process.
Step 4: Choose a business jurisdiction
After successfully selecting and registering your company’s name and business activities, you must choose a business jurisdiction to establish your company. The UAE government provides for two different business jurisdictions: Free Zone and Mainland. Each has its own rules, regulations, laws, requirements, and business activities.
Free Zones are the most popular in the UAE as they give entrepreneurs and investors 100% ownership of the company, a zero personal and corporate tax rate, and are allowed to repatriate 100% of the profits and capital to their home countries.
Mainland companies’ key benefit is that businesses can trade directly within the UAE without requiring a branch office, as with Free Zone companies.
While choosing which is best for your business may seem tricky, Trade License Zone’s highly skilled staff will guide you in this step.
Step 5: Apply for Initial Approval
All companies must apply for Initial Approval to proceed with the business license application and company setup process. In applying for a diamond trade license with the Department of Economic Development (DED), you must submit documentation for Initial Approval to continue with the remainder of the trade license application process.
Documents most commonly required for this step include:
- Copy of the owner’s passport and visa
- Copy of the shareholders’ passports and visas
- Copy of the tenant lease agreement
- Approvals from the Dubai Multi Commodities Centre (DMCC Free Zone) or the Dubai Gold and Diamond Park (Mainland Zone)
- Dubai municipal approvals
- Company name approval from the Registry Office
Step 6: Submit your trade license application
Once you’ve completed the above steps, you can submit your diamond trading license application to the DED. Trade License Zone can help you with this critical step to avoid errors, delays, or rejections.
Step 7: Apply for your visa
Once your diamond trading business licence has been granted and you’ve made payment for its issuance, you can apply for your UAE residency visa to live and work in Dubai. This trade license may entitle you to sponsor the visas of family and staff, depending on the conditions of the specific trade license.
Step 8: Open your corporate bank account
The final step before you begin trading in Dubai is opening your corporate bank account.
Cost of starting a diamond trading business in Dubai
Starting a diamond trading business in Dubai costs AED 15,000 to AED 25,000 for the diamond trading business licence and company formation fees. This price can increase depending on the type of trading license, number of employees, company structure and business jurisdiction, tenancy contract for office space and retail space, Dubai government and municipal approvals, and more.
Contact Trade License Zone’s highly experienced team for a free quote to help transform your business idea into reality.
Business setup in Dubai with Trade License Zone
Business setup in the UAE is straightforward when you partner with Trade License Zone. While the UAE government streamlined the trade license application and company registration processes, our experts will save you time and money and eliminate the frustration of unnecessary delays or rejections.
The specialists at Trade License Zone can get you started with your diamond business in Dubai as soon as you provide us with some basic documentation and information. Our team will then take care of the rest for you: we’ll manage your business setup, communicate with all relevant government departments and authorities, visa amendments and applications, and corporate bank accounts, and report back to you when you’re ready to start trading. It really is that simple.