Trading precious metals brings supervision the trade licence does not mention

The licence names the activity; a different authority decides how you may conduct it

A UAE trade licence authorising dealing in gold, precious metals or precious stones is issued by an emirate's economic department or by a free zone authority, and the certificate is silent about the regime sitting underneath it. Nothing printed on it says that the activity code makes the company a Designated Non-Financial Business and Profession, that a federal ministry rather than the licensing authority supervises it, that a compliance officer has to be named, or that certain transactions have to be reported to a national financial intelligence unit through a platform the company must already be enrolled on.

Forming the company is the small half of this project. A metals dealer that has a licence and no compliance function has bought the right to trade and not yet built the thing that lets it keep trading. Everything below is what the licence does not mention, in the order it arrives.

Gold is four different businesses, and they are not licensed the same way

The legacy version of this subject treated "gold trading" as one activity with one licence. It is at least four, and the differences decide the category, the premises, the approvals and the supervisor. Sorting which of them you are actually in — and what each does to your VAT mechanism and your tax position — is the work on who you sell gold to decides your licence. This page is about the supervision that follows whichever one you choose.

The last row is the one that catches founders who describe their plan as "gold trading" and mean something closer to a fund. If nobody ever takes delivery, the activity is not commerce in goods, and a commercial licence does not authorise it. That question is worth settling in the first conversation, because the answer changes the jurisdiction, the timetable and whether the business is licensable at all on the route being quoted.

Nothing in that table is peculiar to gold except where it says so. For anti-money-laundering purposes the Ministry of Economy and Tourism's sector guidance defines precious metals as gold, silver, platinum and palladium, each at or above a stated minimum fineness, so a silver wholesaler, a platinum jeweller and a palladium trader each sit in the same row as their gold equivalent — the same supervisor, the same compliance officer and programme, the same goAML enrolment. The fineness floor is not a way out: the same guidance tells dealers to treat as precious metals and stones any object that takes half or more of its value from them, whatever its form or intended use. Rhodium and the remaining platinum-group metals sit outside the definition itself, but the Ministry expects a dealer who handles them to apply the same risk-based caution.

Where the metals do part company, it is in two places, both covered further down: the Ministry's responsible-sourcing regulations are written for gold, and the VAT zero rate for investment metal names gold, silver and platinum but not palladium. The table at the end of the next section sets each metal against the regimes that turn on it.

Category assignment here is typical rather than authoritative — read the directory line itself. How the category is derived, and what else it decides, is set out in commercial, professional or industrial.

Copper, aluminium and zinc trade as ordinary goods, outside the dealer regime

Base metals are not precious metals for any purpose on this page. A company trading copper, aluminium, zinc, nickel, lead, iron or steel is not a dealer in precious metals and stones, and that activity does not make it a Designated Non-Financial Business and Profession. The Ministry's supervision, the notified compliance officer and the dealer's goAML enrolment and reporting attach to precious metals and stones, and the responsible-sourcing regulations to gold; none of them attaches to metal as such. The business is licensed as ordinary commercial trading: a metals line from the authority's directory where the range is narrow, or a general trading licence where it is wide. Each authority defines general trading for itself, which is worked through in what a general trading licence actually permits.

The line runs through what the company actually does, not through its name or its main business. The Ministry's guidance treats a business as a dealer when precious metal is a regular part of its trade, and one of its own case studies is a general trading company whose licence never mentioned precious metals and which traded gold regularly anyway — with the gap between the licence and the trading listed among the warning signs. A copper trader that expects to handle silver, platinum or gold as well should settle which side of the line it sits on before the licence issues. A precious-metals line added to the activity list "in case" brings every obligation on this page with it. What breadth on a trading licence commits a company to more generally, product line by product line, is set out on running a general trading business.

Scrap is where that line needs the most care. Catalytic converters and electronic scrap are often bought for the precious metal inside them. The Ministry's own description of the sector already reaches buyers and sellers in the secondary and scrap markets, and the half-value rule above turns on where an object's value lies, not on what it is called. A scrap business whose margin comes from precious-metal content should put the question to the supervisor, or to counsel, before it trades, rather than assume that the word "scrap" keeps it outside.

Outside the dealer regime is not outside everything. A base-metals company still keeps its beneficial-ownership records, and it is bound — like every person in the UAE, supervised or not — by the targeted financial sanctions rules: the funds and assets of anyone on the UN Consolidated List or the UAE Local Terrorist List must be frozen without delay, and nothing may be made available to them. Metal crosses borders in volume and through intermediaries, and a trader that never screens its counterparties has no way of knowing whether it is complying. Banks will still ask what physically moves, from whom and to whom; base metals give them no reason to ask less.

Processing changes the answer here as it does for precious metals. Melting, casting, rolling or recycling base metal is industrial activity rather than trading, and above the published threshold it meets the same federal industrial production licence as refining does in the table above.

VAT splits on whether the metal is scrap. None of the precious-metals treatment described further down reaches copper or aluminium. Scrap, however, now carries a reverse charge of its own: ferrous or non-ferrous metal scrap sold between VAT-enrolled businesses, to a buyer who will resell or process it, is accounted for by the buyer rather than charged by the seller. The paperwork mirrors the precious-metals mechanism — the buyer's written declarations before the supply and the seller's check of the buyer's enrolment — with one addition: the invoice must state that the reverse charge applies. Primary metal — cathode, ingot, billet, coil — is not scrap, and it follows the ordinary rules for goods.

Set side by side, the regimes that turn on the metal itself do not name the same list:

The activity code, not the size of the first deal, makes the company supervised

UAE anti-money-laundering law names dealers in precious metals and precious stones as one of the Designated Non-Financial Business and Profession categories, and supervision sits with the Ministry of Economy and Tourism — not with the authority that issued the licence, and not with a free zone.

The trigger is written as a transaction test: a single transaction, or several linked transactions, at or above a threshold set in the law. Read literally, that sounds like an obligation you acquire on the day a large deal happens. Read practically, it is an obligation you must already have discharged before that day, because the programme, the compliance officer and the reporting enrolment cannot be assembled between agreeing a trade and settling it. A dealer who waits for the trigger has already missed it.

This is also why "we only sell small pieces" is a weak defence. Linked transactions are counted together, and whether a series is linked is a judgement the supervisor makes about your business, using your records — which is a reason to keep records capable of answering the question.

What the supervisor expects to find already in place

The obligation set for a DNFBP is not a filing. It is a functioning programme, and an inspection tests whether it operates rather than whether it exists on paper:

• A business risk assessment — written, specific to your counterparties, products, countries and delivery channels, and updated when any of those change.
• A written AML and counter-terrorist-financing policy proportionate to that assessment, with procedures staff can actually follow.
• A named compliance officer with the authority and the access to do the job, notified to the supervisor.
• Customer due diligence on every counterparty, with enhanced measures for higher-risk relationships, and identification of the beneficial owner behind a corporate buyer or seller under the beneficial owner procedures.
• Sanctions screening against the applicable lists, run before the relationship and repeated during it.
• Enrolment on goAML, the Financial Intelligence Unit's reporting platform, and the ability to file through it.
• Suspicious transaction reporting, and the dealer-specific reporting that applies to this sector.
• Record retention for the period the law sets, in a form that can be produced on request.
• Staff training, evidenced.
• Independent testing of the programme.

None of that is unique to gold. What is unique to gold is how quickly a business can reach the threshold and how routinely its counterparties are individuals presenting metal for cash — the two conditions that make this sector a standing supervisory priority rather than an occasional one.

The order these obligations start in, and why the licence is the earliest of them

The sequence below is the one most metals businesses discover in the wrong order. Supervised status does not begin when you first trade at scale; it attaches when the licence issues, which means the compliance work has to precede the commercial work rather than follow it. Read the right-hand column on its own and it is a schedule with almost nothing in it marked "later" — four of the seven fall due before the first transaction, and the authority named under each step is the one waiting on you.

The first station is the cheapest place to change your mind and the only one where the whole shape is still negotiable. Everything after it is execution against a decision already made.

The zone changes who else watches you, never whether you are watched

A free zone licence does not remove federal AML supervision from a precious metals dealer. The federal supervisor's remit follows the activity, and a company inside a zone answers to it in the same terms as a mainland company with the same activity code.

What the zone changes is how much sits on top. DMCC was built around physical commodity trade and publishes supplemental guidance for dealers in precious metals and stones, on top of the federal obligations rather than instead of them — which is a cost when you are comparing licence prices and an asset when a bank or a counterparty is deciding whether to deal with you. The DMCC profile sets out what the zone is and is not good for. Other zones vary in whether they accredit the activity at all, which is a question to settle before paying, not after.

Read that as the general rule for this sector: the choice of jurisdiction moves the supervisor's neighbours, not the supervisor.

Gold carries a responsible-sourcing regime that has nothing to do with money laundering

This is the layer most guidance on the subject omits entirely, and it is a separate obligation with a separate purpose. The Ministry of Economy and Tourism operates due diligence regulations for the responsible sourcing of gold, built on the OECD's due diligence guidance for mineral supply chains — a framework of a supply chain policy, a management system, risk identification in the chain of custody, a response strategy, independent third-party audit and public reporting.

The point of it is provenance, not laundering: whether the metal came from a source connected to conflict, human rights abuse or illegal extraction. A dealer can be entirely clean on AML and still fail this, because the questions are different ones. It bears hardest on refiners, and it reaches back down the chain to the traders who supply them — which means a trader with no direct obligation still has to answer a refiner's questions to stay in its supply chain.

DMCC runs due-diligence rules of its own for the gold and precious metals supply chain, built on the same OECD framework and written for precious metals as a class rather than for gold alone. They are mandatory only for the members DMCC accredits under its Dubai Good Delivery or Market Deliverable Brand standards and voluntary for every other member — so a silver or platinum trader that is not accredited meets them, if at all, through the checks an accredited refiner runs on its suppliers.

The equivalent for rough diamonds is the Kimberley Process certification scheme, which controls the movement of rough stones across borders and requires a certificate accompanying each shipment. That is an import and export control rather than a licensing condition, and it applies to the goods, not to the company.

Refining and manufacturing add a federal licence a trader never meets

Trading is settled at the emirate or free zone level. Refining and manufacture are not. An industrial operation above the published threshold needs a federal industrial production licence from the Ministry of Industry and Advanced Technology in addition to the licence its local authority issued, and the federal industry law applies inside free, economic and specialised zones as well as on the mainland. A free zone industrial licence does not sidestep it.

Standards are the second half of that story. The Emirates Authority for Standardization and Metrology was absorbed into the Ministry of Industry and Advanced Technology, and conformity marking for regulated products runs through the ministry. For precious metal articles, hallmarking and assay establish the fineness a piece is sold as — which is a consumer protection function operating independently of everything above, enforced against the article rather than the entity. In Dubai, testing and certification of this kind runs through the municipality's central laboratory.

So a jewellery manufacturer holds a licence, a facility clearance, a federal industrial permission, a standards obligation on its products and an AML programme, and only the first of those is what most people mean by "getting a licence".

VAT on precious metals runs on a mechanism of its own, and it turns on the counterparty

Two features make this sector different from ordinary goods trading, and both are about who you are selling to rather than what you are selling.

Investment precious metals are zero-rated where they meet the purity and form conditions the Executive Regulation of the VAT law sets. Bullion of the specified standard is treated differently from the same metal in a finished article, and a jewellery sale carrying a making charge is not the same supply as a bar. The regulation names the metals as well as the standard — gold, silver and platinum — so a palladium bar is not an investment precious metal for VAT however pure it is, even though palladium counts as a precious metal for anti-money-laundering purposes.

Supplies between VAT-enrolled businesses can fall under a reverse charge, so the buyer accounts for the tax instead of the seller charging it. The relief is conditional and the conditions are documentary: the buyer's enrolment status, a written declaration of intent, and the seller's evidence that it verified both. A dealer who applies the mechanism without holding the declaration has not saved tax — it has created an assessment.

The reverse charge has also outgrown gold and diamonds. It now reaches gold, silver, palladium and platinum; diamonds, natural or synthetic, along with pearls, rubies, sapphires and emeralds; and jewellery made from any of them where the metal or stones are worth more than everything else in the piece. It applies only where the buyer is taking the goods to resell them or to use them in production or manufacture. The zero rate and the reverse charge do not name the same metals, so a palladium or mixed-metal business has to read both lists rather than infer one from the other.

The practical consequence is that a metals business needs its VAT position designed alongside its counterparty onboarding, because the same file supports both. This page names no rate, threshold or instrument number for that treatment; confirm the current position with the Federal Tax Authority before pricing a transaction on it.

Crossing a border with metal is a declaration question before it is a logistics one

Physical metal moves under the same customs machinery as any other goods — a customs code linked to the licence, declarations against each consignment, and documentation that has to match. The general mechanics are set out in customs codes and moving goods and are not repeated here.

What is specific to this sector is the personal-carriage route. Precious metals and stones travelling with a passenger are subject to declaration requirements at the border in the same family of rules as cash, and hand-carried inventory that has not been declared is a customs matter before it is anything else. Businesses that move stock in luggage should treat the declaration as part of the transaction rather than as an airport formality.

Banks treat a precious metals licence as a risk category, not as a sector

Account opening is where this licence is most expensive and least discussed. A dealer in precious metals presents the combination banks are most cautious about: high-value goods, cash-adjacent counterparties, cross-border flows and a customer base that can be hard to evidence. Expect enhanced due diligence, questions about source of funds and source of wealth, evidence of the AML programme itself, and a longer onboarding than a comparable trading company would face.

The programme described above is therefore not only a supervisory obligation. It is the document set the bank asks for. Building it before the account application, rather than in response to one, is the difference between a slow account and a refused one. Banking advisory sets out what banks actually test.

Where a precious metals licence is the wrong purchase

A supervised activity that has to be surrendered a year later costs more than the licence that was never issued — and the surrender is on the record. Here is where this one is a mistake.

If the metals activity is incidental and someone added it because it was included in a package. A broad activity list that happens to contain precious metals dealing buys you a supervisor, a compliance officer and an inspection exposure for a line of business you were not going to run. Take it off the licence.

If nobody in the company will own the compliance function. The programme is not a document you buy once. If there is no budget for a compliance officer, no appetite for training, and no intention to refuse a transaction that fails due diligence, the licence is a liability rather than an asset, and the failure arrives as an enforcement matter rather than a commercial one.

If the business model depends on undocumented cash purchases. Buying metal from walk-in sellers without identification, provenance or records is the specific pattern this entire regime exists to detect. It is not a sector where light record-keeping is a competitive advantage; it is the thing that ends the licence.

If what you actually want is exposure to the gold price. That is an investment activity, it belongs to a financial services regulator, and a commercial trade licence does not authorise it however the activity list is worded. Buying the cheaper licence does not make the regulated version legal.

If the licence is really being bought for a residence visa or a bank account. A supervised activity is the worst possible choice for a nominal company, because it attracts scrutiny in proportion to what it claims to do rather than to what it does. A trade licence is not a residence permit covers why that trade rarely works in any sector; here it works worst.

If your counterparties are in jurisdictions you cannot run due diligence on. The obligation is yours regardless of where the other side sits. If you cannot evidence who they are, you cannot transact, and a licence that permits a trade you cannot compliantly execute is an expense with no revenue behind it.

If someone has quoted you a licence in days and said nothing about any of the above. The licence genuinely can issue quickly. The supervision cannot be assembled quickly, and a seller who has not mentioned it is quoting the half they get paid for.

The questions that separate a real setup from a licence sale

Ask these of any firm quoting you, this one included:

1. What is the exact activity line, from the authority's directory, and does it place the company inside the DNFBP definition? A yes or no, with the directory reference.
2. Who will be the compliance officer, and what does the programme cost annually? If the answer is that it will be dealt with later, it is being priced out of the quote.
3. What does goAML enrolment require of us, and who does it?
4. Does the jurisdiction being quoted actually accredit this activity, and what does the zone add on top of the federal obligations?
5. If gold is involved, what responsible-sourcing evidence will our refiner or our buyer ask us for?
6. What will the bank want to see, and when should we start that conversation? The answer to "when" is before the licence, not after.

What we would need from you before quoting anything

The activity in your own words, whether metal will be physically held or only priced, who your counterparties are and where they sit, whether refining or manufacture is part of the plan, and who inside the business is going to own compliance. From that we can tell you which row of the table above you are actually in — including the row that is not a trade licence at all — whether the jurisdiction someone has quoted you can issue it, and what the programme will cost to run rather than to write.

Name the metals, too. Silver, platinum and palladium sit inside the regime alongside gold; copper, aluminium and zinc sit outside it; and a plan that mixes the two is scoped line by line, because one precious-metals line on the licence is enough to bring the whole company under supervision.

If the answer is that the metals activity should come off the licence entirely, that is what you will hear from our Business Bay office — before it is paid for, rather than after the first inspection.

Frequently asked questions