The Dubai Multi Commodities Centre free zone is reducing its business set-up fees by 50 per cent for diamond companies to boost the emirate's precious stone trade and attract international companies to the emirate.
The rate reduction is effective immediately and valid until September 30, the free zone said in a statement on Saturday. All new company registrations will also be offered a free 12-month membership of the Dubai Diamond Exchange – the world’s largest diamond tender facility.
“Right across the supply chain, the diamond industry is passing through a period of turbulence. For many, the change that will follow is seen as an unpredictable threat. But for Dubai, it is an opportunity," said Ahmed Bin Sulayem, executive chairman and chief executive, DMCC.
“By reducing the cost of setting up in DMCC by record levels, we hope to remove barriers to entry and supply the type of support required by business during challenging times."
Dubai has emerged to be a leading diamond trading hub both in terms of value and volume over the years. The emirate has gained market share from established centres such as Antwerp, Amsterdam and Chicago. The total value of rough and polished diamonds traded in the emirate reached Dh91.8 billion in 2018 compared with Dh13.2bn in 2003, according to DMCC data.
The free zone, which handles trading of commodities from pulses to diamonds, also has plans to position Dubai as a leading international trade hub for laboratory grown diamonds and coloured stones - a fast growing segment in the industry.
DMCC's latest move comes as the $80bn (Dh294bn) diamond industry looks to deal with the fallout from the coronavirus pandemic that paralysed supply chains and pressured sales. The pandemic has also led to the cancellation of events where rough diamonds are purchased.
On Thursday, South Africa's De Beers, the world's largest diamond producer, said earnings before interest, tax, depreciation and amortisation plunged to $2 million in the six months to June, from $518m in the same period a year ago. The company, which is now implementing a restructuring plan, sold only $56m worth of diamonds in the second quarter.