Thrilled to share a game-changing decision by the UAE Cabinet that could have a significant impact on commodity trading businesses, particularly those in non-designated free zone entities, including DMCC entities.
As of November 3, 2023, the UAE Ministry has introduced a new Ministerial Decision 265 of 2023, replacing the previous Ministerial Decision 139 of 2023, which comes into effect from June 1, 2023.
This decision now includes ‘Trading of Qualifying Commodities’ as a qualifying activity. But what exactly does this mean?
Trading of qualifying commodities refers to the physical trading of qualifying commodities and associated derivative trading used to hedge against the risks involved in these activities. The key takeaway here is that this change opens up the doors to great relief for traders operating in non-designated free zones, including numerous global entities established in DMCC.
So, what are Qualifying Commodities? They encompass metals, minerals, energy, and agricultural commodities traded in their raw form on a Recognised Commodities Exchange Market.
This move by the UAE government has the potential to make a substantial positive impact on the commodity trading landscape, offering new opportunities and benefits for businesses in this sector. If you’re involved in commodity trading in the UAE, make sure to review the details of this decision and consider how it may benefit your operations.
Stay tuned for further updates and ensure you stay compliant with the new regulations. The UAE continues to position itself as a favourable destination for business, and these changes could play a pivotal role in shaping your success.
The writer is Partner - MI Capital Services
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