Dubai Gold and Diamond Park vs. Antwerp Diamond Quarter: Precious Metal Trading between East and West

Imagine this: you buy gold in Dubai for €50,000 and sell it in Europe for €55,000. Where does the profit end up? That depends on how cleverly you’ve structured your setup.

Every day I encounter entrepreneurs asking me: Richard, where is the best place to trade in precious metals?

The answer is complex. It’s not just about getting the best purchase price.

Here two worlds meet: The Dubai Gold and Diamond Park with its oriental trading advantages, and the historic Antwerp Diamond Quarter as Europe’s center. Both offer unique opportunities for tax-optimized precious metal investments.

As someone who knows both trading venues first-hand, today I’ll take you on a journey through the world of international precious metals trading. Not as a theoretical advisor, but as your tax mentor, showing you where the real opportunities lie.

And where the pitfalls lurk.

Ready? Then let’s dive into two fascinating worlds of precious metals trading.

Dubai Gold and Diamond Park: Your Gateway to Tax-Free Precious Metals Trading

Dubai has evolved over the last two decades into the most important precious metals hub between Asia and Europe. That’s no coincidence.

The Dubai Gold and Diamond Park (DGDP) is more than just a market. It’s a tax oasis for international entrepreneurs like you.

What makes the Dubai Gold and Diamond Park so special?

DGDP was established in 2001 as a free trade zone. That means: Special rules for special business.

Here are the main advantages at a glance:

• No import duties on precious metals and diamonds
• No value-added tax (VAT exemption confirmed until the end of 2026)
• 100% foreign ownership allowed
• No currency restrictions
• Repatriation of profits without restrictions
• Corporate tax of only 9% (since 2023)

But caution: these advantages only apply if you understand and follow the rules.

Let me illustrate this with a concrete example:

Thomas, one of my clients, imports gold worth €2 million annually via Dubai. In Germany he would have paid 19% VAT – that’s €380,000. In Dubai? Zero.

This saving alone justifies the effort of setting up a Dubai structure.

Tax Advantages for Precious Metals Trading in Dubai

The tax conditions in Dubai are extremely attractive for precious metals traders. But you need to know the details.

You also benefit from Dubai’s strategic location. The Emirates is the natural hub between Africa’s gold mines, Asia’s refineries, and Europe’s markets.

This leads to unique arbitrage opportunities.

Elena, another client, makes skillful use of this: she buys raw gold from Ghana via Dubai and sells refined gold in Switzerland. The margins are impressive.

Practical Steps to Get Started in Dubai

Getting started in the Dubai Gold and Diamond Park is more structured than many people think. Here is your roadmap:

1. Company formation in DGDP
   • Minimum capital: 50,000 AED (approx. €13,600)
   • Processing time: 2–3 weeks
   • Annual license fee: from 15,000 AED
2. Apply for trading licenses
   • Gold Trading License
   • Diamond Trading License (required separately)
   • Import/Export License
3. Open bank accounts
   • Preferably local UAE banks
   • International banks for global transactions
   • Minimum deposit: varies per bank (USD 50,000–500,000)
4. Build a compliance structure
   • Implement AML policies
   • Know Your Customer (KYC) processes
   • Documentation for international transfers

Important: Do not underestimate the compliance effort. Dubai may be tax-free, but it is far from without rules.

Authorities pay particular attention to precious metal transactions. Rightly so, in my opinion.

Antwerp Diamond Quarter: Europe’s Traditional Diamond Hub

Antwerp has been at the heart of the global diamond trade for over 500 years. But does tradition also make sense from a tax perspective?

Let’s take a closer look.

The History and Importance of the Antwerp Diamond Quarter

The Antwerp Diamond Quarter processes about 80% of all rough diamonds worldwide. This dominance is no accident.

Here are the impressive figures:

• Annual turnover: over €54 billion (2023)
• Number of companies: around 1,500 diamond firms
• Employees: over 30,000 direct jobs
• Market share: 80% of world trade in rough diamonds
• Expertise: 500+ years of trading experience

This concentration of expertise and infrastructure is unique. Nowhere else will you find so many specialists, appraisers, and service providers in one place.

But: expertise is costly. Not only in terms of fees.

Tax Aspects of Diamond Trading in Belgium

Belgium is known for high taxes. This also applies to the diamond trade—with important exceptions.

Here are the tax conditions:

The key advantage: Belgium offers a special rule for diamond exports. Exporters pay no VAT on sales outside the EU.

This makes Antwerp especially interesting for traders who operate globally.

You also benefit from EU membership. That means free movement of goods within the EU with no additional duties or bureaucratic hurdles.

Advantages for EU Entrepreneurs in the Antwerp Diamond Quarter

If you already have or are planning an EU structure, Antwerp offers some practical benefits:

1. Legal certainty through EU standards
   • Uniform EU consumer protection laws
   • Standardized contract terms
   • European Court of Justice as the final authority
2. Simple company management
   • No visa requirements for EU citizens
   • Familiar business practices
   • German language widely spoken
3. Established financial services
   • Specialized diamond financing
   • Insurance for gemstone transport
   • International banking relationships
4. Quality certifications
   • Antwerp World Diamond Centre (AWDC) standards
   • Kimberley Process certificates
   • GIA and other international appraisals

Here’s where it gets interesting: Robert, a client from Munich, uses a combination of his German GmbH and a Belgian branch office. The German company purchases, the Belgian company sells internationally.

Result: optimal tax setup with minimal complexity.

But take note: this structure only works with genuine business substance in Belgium. Shell companies have been problematic since the BEPS rules.

Dubai vs. Antwerp: A Direct Comparison for Precious Metals Investors

Now it gets exciting. Which market is right for your situation?

The answer depends on your business model, your risk appetite, and your long-term goals.

Tax Burden in Comparison

Let’s look at the numbers. Suppose you trade in precious metals worth €1,000,000 annually:

Impressive, isn’t it? Dubai is clearly ahead in terms of tax burden.

But: this is a simplified calculation. It doesn’t consider different operating costs, compliance overhead, and risks.

Regulatory Differences

The regulatory framework is very different. This directly affects your daily business:

Dubai Gold and Diamond Park:

• Liberal business practices
• Less bureaucracy for transactions
• Fast approval processes
• Flexible working hours and conditions
• Simpler international money transfers

Antwerp Diamond Quarter:

• Strict EU compliance requirements
• Comprehensive documentation obligations
• Regular government inspections
• High standards for anti-money laundering
• More complex international transactions

What does this mean in practice? In Dubai you can often react more quickly and act more flexibly. In Antwerp you have greater legal certainty and consumer protection.

Sophie, one of my clients, puts it this way: Dubai is like a sports car – fast and agile. Antwerp is like a luxury sedan – safe and comfortable.

Market Opportunities and Liquidity

Both markets offer different opportunities and challenges:

Dubai – Growth Market with Potential:

• Fast-growing Asian markets within reach
• Rising middle class in the region
• Less saturated market, more opportunities for innovation
• Higher possible profit margins
• Less competition in specialized products

Antwerp – Established Market with Tradition:

• Highest liquidity for standard products
• Established customer networks
• Better price transparency
• Comprehensive services available
• Lower market entry barriers

The decision depends on your business model. If you want to develop innovative products or open up new markets, Dubai is more attractive. For traditional trading in established products, Antwerp remains the top choice.

International Tax Structures for Precious Metals Trading

Now we get to the core issue. How do you structure your precious metals business optimally?

Most entrepreneurs think too one-dimensionally. They focus on a single location instead of combining the advantages of different jurisdictions.

How to Optimally Structure Your Precious Metals Investments

An optimal structure leverages the strengths of various locations and minimizes their weaknesses. Here are my tried-and-tested models:

Model 1: The Dubai-Europe Structure

1. Purchasing company in Dubai
   • Cost-effective procurement without VAT
   • Low corporate tax (9%)
   • Free profit distribution
2. Sales company in Europe
   • Access to EU markets
   • Legal certainty for customer deals
   • Local credit options
3. Holding structure in Cyprus
   • Tax-free dividends (under certain conditions)
   • EU legal protection
   • Flexible use of profits

Model 2: Pure Dubai Structure

Ideal for entrepreneurs primarily active in Asia and the Middle East:

• Operating company in Dubai Gold and Diamond Park
• Holding company in Dubai International Financial Centre (DIFC)
• Private asset management via family office

Model 3: The Antwerp-Plus Structure

For EU-focused businesses with tax optimization:

• Trading company in Belgium
• IP holding in the Netherlands
• Financing company in Luxembourg

Which model fits you? That depends on five factors:

1. Your business volume
2. Your target markets
3. Your personal risk appetite
4. Your available capital
5. Your long-term goals

Pitfalls in Cross-Border Precious Metals Transactions

International precious metals structures are complex. Here are the most common mistakes I see:

Mistake 1: Lack of substance

Many entrepreneurs believe a shell company in Dubai is sufficient. That’s dangerous. Since the BEPS rules, tax authorities around the world check for economic substance.

What you need:

• Real business activity on site
• Qualified staff
• Appropriate office space
• Local bank accounts and business partners

Mistake 2: Ignoring reporting obligations

The Common Reporting Standard (CRS) and similar agreements mean automatic information exchange. Your home authorities find out about your foreign accounts.

Mistake 3: Underestimating compliance costs

International structures require a lot of upkeep. Expect annual costs of €15,000–50,000 for professional support.

Mistake 4: Lack of documentation

With precious metals, proof of origin is crucial. Complete documentation protects you from later issues.

Reporting and Compliance Obligations

Compliance is especially important for precious metals. Here are your key obligations:

In Germany:

• Notification requirement for foreign companies
• CFC taxation on low-taxed income
• Documentation of all international transactions
• VAT filings for EU transactions

In Dubai:

• Annual license renewal
• Anti-money laundering compliance (AML)
• Suspicious transaction reports (STR)
• Economic substance reporting

In Belgium:

• Intrastat reports for EU trade
• Kimberley Process certificates for diamonds
• FATCA and CRS reporting
• Monthly VAT filings

My tip: Invest in professional compliance systems from the very beginning. The costs are lower than the risks of non-compliance.

Practical Implementation: Your Personal Precious Metals Strategy

Theory is nice. But how do you actually implement this?

Let me show you three proven strategies I’ve successfully implemented with my clients.

Strategy 1: Beginners (up to €500,000 annual turnover)

You’re just starting with precious metals investments and want to test what works?

Recommended structure:

• Procurement via established dealers in Dubai
• Sales via German GmbH or Austrian GmbH
• Private vault in Switzerland for long-term holdings

Advantages:

• Low entry costs (less than €10,000 setup costs)
• Flexibility for growth
• Legal certainty from familiar jurisdictions
• Simple accounting and compliance

Typical annual costs:

• Tax advice: €3,000–5,000
• Compliance: €2,000–3,000
• Storage costs: 0.5–1% of asset value
• Insurance: 0.1–0.3% of asset value

Strategy 2: Advanced (from €500,000–2 million)

You’ve already gained experience and now want to optimize your tax burden?

Recommended structure:

• Trading company in Dubai Gold and Diamond Park
• EU sales company in Cyprus
• Holding structure for profit retention

Setup steps:

1. Phase 1 (Months 1–2): Found Dubai company
2. Phase 2 (Months 2–3): Set up bank accounts and licenses
3. Phase 3 (Months 3–4): Establish EU structure
4. Phase 4 (Months 4–6): Optimize operational processes

Expected tax savings:

• Year 1: 15–25% of profits
• From year 2: 30–45% of profits
• Payback: 12–18 months

Strategy 3: Pros (over €2 million)

You are an experienced trader and want a fully integrated international structure?

Recommended structure:

• Multiple operational companies (Dubai, Singapore, Switzerland)
• Central IP holding in the Netherlands
• Family office structure for wealth management
• Trust structures for succession planning

Additional optimizations:

• Transfer pricing agreements between companies
• Royalties for IP use
• Centralized financing via low-tax jurisdictions
• Currency management and hedging strategies

At this level, you’ll work with a team of tax advisers, lawyers, and financial experts in various countries. Coordination is complex, but the tax savings justify the effort.

Important note: For annual turnover above €2 million, you should plan to spend at least 50% of your time on compliance and structure management. Or delegate this to professional service providers.

Frequent Mistakes in International Precious Metals Trading – and How to Avoid Them

After 15 years as a tax mentor, I’ve seen every conceivable mistake. Let me help you avoid the most expensive ones.

Mistake 1: Lack of economic substance

The problem:
Many entrepreneurs set up a company in Dubai or Antwerp without building actual business activity on site. It used to work. Not anymore.

The solution:

• Hire qualified staff on site
• Rent suitable office space
• Make actual business decisions at the company’s registered office
• Document all key meetings and decisions
• Hold regular shareholder meetings

Practical example:
Marcus thought a Dubai company with a mailbox address would suffice. The German tax office classified his company as transparent and taxed the profits in Germany. Cost: €180,000 in back taxes plus interest.

Mistake 2: Inadequate documentation

The problem:
Precious metals transactions are especially prone to audits. Without complete documentation, every tax audit becomes a nightmare.

The solution:
Document everything:

Mistake 3: Underestimated compliance costs

The problem:
International structures look inexpensive on paper. The ongoing costs are often underestimated.

Realistic cost planning:

• Dubai structure (yearly):
  • License fees: €5,000–15,000
  • Local bookkeeping: €8,000–12,000
  • German tax advice: €5,000–10,000
  • Compliance management: €3,000–8,000
  • Total: €21,000–45,000
• Antwerp structure (yearly):
  • Company costs: €2,000–5,000
  • Belgian bookkeeping: €6,000–10,000
  • German tax advice: €4,000–8,000
  • Compliance: €2,000–5,000
  • Total: €14,000–28,000

Rule of thumb: Budget at least €20,000–30,000 a year for structural costs. Anything less is unrealistic.

Mistake 4: Insufficient risk protection

The problem:
Precious metals are valuable and mobile. That makes them prime targets for thieves and fraudsters.

Essential protections:

1. Insurance coverage
   • Transport insurance: all-risk coverage
   • Storage insurance: theft and natural disasters
   • Professional liability: for advisory errors
   • Cyber insurance: for digital attacks
2. Operational security
   • Professional storage in high-security vaults
   • Split storage at multiple locations
   • Encrypted communications during transactions
   • Due diligence for all business partners
3. Legal protection
   • Develop standardized contracts with attorneys
   • Arbitration clauses for international disputes
   • Proof of origin for all materials
   • Regular compliance audits

Elena, one of my clients, became the victim of this: a shipment worth €200,000 disappeared on the way from Dubai to Munich. No insurance, no tracking possible. Total loss.

Don’t skimp on security. The cost for professional protection is minimal compared to potential losses.

Frequently Asked Questions

Is trading precious metals through Dubai legal?
Yes, completely legal. The Dubai Gold and Diamond Park is an official free trade zone. The important thing is that you meet all compliance requirements and properly declare your income.

What is the minimum investment for a Dubai structure?
For a meaningful Dubai structure, you should plan for at least €100,000–200,000 annual turnover. For lower volumes, the structure costs exceed the tax savings.

Can I simply relocate my existing German company to Dubai?
No, that’s not directly feasible. You must found a new company in Dubai. Your German company can, however, hold shares in the Dubai company or vice versa.

How high are taxes in Dubai really?
Since 2023 there is a corporate tax of 9% on profits above 375,000 AED (about €102,000). Smaller profits remain tax-free. No VAT on precious metals exports.

Is Antwerp interesting only for diamonds or also for gold?
Antwerp is primarily focused on diamonds. For gold, there are better European alternatives like London or Zurich. However, the tax benefits apply to all precious metals.

Do I have to live in Dubai or Antwerp personally?
No, but you need economic substance onsite. That means: qualified staff, real business activity, and regular presence for key decisions.

How long does it take to set up a precious metals company?
In Dubai: 2–4 weeks for the basic structure, 2–3 months until everything is operational. In Belgium: 1–2 weeks to set up, 4–6 weeks for full operability.

What are the compliance risks?
The biggest risks are money laundering allegations and violations of proof of origin requirements. Invest from the start in professional AML systems and complete documentation.

Can private individuals benefit from these structures?
To some extent. Private precious metals trading is taxed differently than commercial trading. Above a certain volume, you will automatically be classified as a business operator.

What happens during a tax audit?
With proper documentation and genuine economic substance, tax audits are unproblematic. Without these basics, audits can become very expensive. Invest in professional preparation.