Who you sell gold to decides your licence, your VAT and your tax rate

Two companies describe themselves as gold trading businesses. One buys kilobars from a refiner and sells them to a bank in Singapore. The other sells chains and bangles to walk-in customers in a mall. They need different licences from different authorities, they fall under different VAT mechanisms, they carry different anti-money-laundering obligations, and only one of them can plausibly hold a 0% corporate tax position in a free zone. Choosing the licence before settling which business you are in is the mistake that costs the most to reverse.

Four questions that sort every gold plan

Answer these before you look at a zone, a package or a price.

Who is the buyer — a business or a person? This single answer drives the VAT mechanism and, inside a free zone, the tax status. Selling to individuals is not a smaller version of selling to businesses. It is a different tax category.

What form is the metal in? Raw bars and unwrought metal, semi-manufactured goods, finished jewellery and scrap are treated as separate propositions by customs, by VAT and by the corporate tax rules on qualifying activities.

Do you take possession? A trader who never touches the metal, an operator who holds stock, and a business that refines or manufactures face different premises requirements, insurance and security conditions, and different scrutiny.

Will cash be involved? Cash changes your obligations rather than merely your accounting, and it changes what a bank will accept.

The five businesses, and who licenses each

A sixth thing is often confused with these and is not a trade in metal at all. Buying and selling gold futures or other exchange-traded contracts is a financial activity within the remit of the Securities and Commodities Authority. A commodity trade licence does not authorise it, and no free zone package includes it.

Mainland or free zone, and why this is not a tax question first

VAT: know which mechanism you are in before the first invoice

The standard rate is 5%. Gold does not escape VAT, but it moves through three different mechanisms depending on what you sold and to whom, and the difference is cash flow rather than theory.

Two practical points. A mechanism that removes VAT from your sales does not remove your filing obligation. And a business assuming the reverse charge will apply, and pricing on that basis, carries the tax itself if the buyer's declaration does not arrive.

AML: gold is a named sector, not an incidental one

Dealers in precious metals and stones are a designated category under the federal anti-money-laundering framework — Federal Decree-Law No. 10 of 2025 and Cabinet Resolution No. 134 of 2025 — and they are supervised for anti-money-laundering purposes by the Ministry of Economy. This is a licensing condition with teeth, and fines in this sector are issued.

What it means in practice: a written risk assessment for your own business; customer due diligence on counterparties, with enhanced measures where the counterparty, the country or the transaction warrants it; sanctions screening; a compliance officer; staff training; record retention; and reporting through the goAML platform operated by the Financial Intelligence Unit. Cash transactions above a threshold set in the Cabinet Decision trigger due diligence and a dealer-specific report regardless of any suspicion — establish the current figure and report type from the supervisor rather than from a trade body summary.

Building that function is a project in itself rather than a paragraph in a formation package, and what supervision a precious metals dealer actually carries sets out the compliance officer, the goAML arrangements, the sourcing evidence and the VAT treatment as one connected obligation.

Above that sits supply chain provenance, which is where gold differs from almost every other commodity.

Rough diamonds have a single international certificate scheme. Gold does not. The burden is distributed across the documents above, which is why a gold business with a thin provenance file fails at the bank even when the licence is in order.

Corporate tax, and the retail counter that can cost a free zone its 0%

Corporate tax is federal at 9% on taxable income above AED 375,000, and 0% at or below. No zone exempts you from it.

A free zone company may access 0% on qualifying income where it satisfies the qualifying free zone conditions. For a metals business, three features of the operative ministerial decision matter more than anything a zone will tell you. The trading of qualifying commodities is a qualifying activity, but the definition turns on the metal being in raw form and on it being traded on a recognised commodities exchange — which points at bullion and unwrought metal, and points away from finished jewellery. Transactions with natural persons are treated as an excluded activity, which is a direct problem for any free zone entity selling to individuals. And a de minimis allowance limits how much non-qualifying revenue you may have before the status is lost, with a consequence that runs for several tax periods rather than one.

Read that combination carefully against your actual sales mix. A free zone bullion desk selling to banks and refiners is in a very different position from a free zone company that also sells coins to retail customers, and the second one is frequently sold the same package as the first.

Where a gold trading company in Dubai is the wrong answer

Where the plan is a retail shop inside a free zone. The zone is built for cross-border wholesale. A counter selling to individuals sits badly with the licence, the premises and the tax status at the same time. That business belongs on the mainland.

Where the working capital is not there. This is a thin-margin, high-ticket trade. A single consignment consumes more capital than most formation plans assume, and the financing that established traders use is not available to a new entity without a track record.

Where the provenance cannot be documented. If you cannot name and evidence your source, no bank will process the proceeds and no institutional buyer will take the metal. The licence is obtainable; the business is not operable.

Where the model depends on cash. Cash buying above the threshold is a supervised activity with reporting attached, and it is the single fastest way to lose a bank account in this sector.

Where nobody in the team has traded metal before. Assay disputes, weight tolerances, hedging and counterparty default are not learnt on the first shipment. This is the sector where a broker relationship is worth more than a licence.

Where the actual interest is price exposure. If you want to be long gold, you want an investment, not a trade licence and an AML compliance function.

What we would want before pricing this

Your buyer mix, split between businesses and individuals. The form the metal is in when you buy it and when you sell it. Whether you will hold stock, and where. Your suppliers by name and country. Whether cash features at all. Your first-year working capital and whether it is yours. Whether anyone on the team has traded physical metal. Those answers decide the jurisdiction, the VAT position and whether the free zone tax argument is available to you at all.

Frequently asked questions