Which Freezones are Designated Zones in the UAE?

We have discussed earlier the different options to have a licensed company, mainland, freezone, offshore. Now what is this designated Zone? How does it differ from the others? Here we will also get into the list of designated zones.

Being a company in UAE, it is important to follow the local laws, which include the tax laws. If the special tax laws are not followed within a designated zone properly then it will attract penalties. This will impact the company's performance.

Why You Should Know This

Designated Zones are special areas where special VAT rules apply. The most important VAT application is that for certain transactions no VAT needs to be charged, mostly revolving trading of goods. These transactions will be out of scope of VAT.

A general way to look at it is that, all designated zones are free zones, but not all free zones are designated zones.

So what are the special characteristics of a designated zone?

These are as follows: 

  1. The Designated Zone must be a specific fenced geographic area. 
  2. The Designated Zone must have security measures and Customs controls in place to monitor the entry and exit of individuals and movement of goods to and from the Designated Zone. 
  1. The Designated Zone must have internal procedures regarding the method of keeping, storing and processing of goods within the Designated Zone. 
  1. The operator of the Designated Zone must comply with the procedures set out by the FTA. 

Now that we know what qualifies as a designated zone, let us get into to the list of qualified designated zones in UAE, where these special tax rules will apply –

Abudhabi

Free Trade Zone of Khalifa Port

Abu Dhabi Airport Free Zone

Khalifa Industrial Zone

Al Ain International Airport Free Zone*

Al Butain International Airport Free Zone*

Dubai

Jebel Ali Free Zone (North-South)

Dubai Cars and Automotive Zone (DUCAMZ)

Dubai Textile City

Free Zone Area in Al Quoz

Free Zone Area in Al Qusais

Dubai Aviation City

Dubai Airport Free Zone

International Humanitarian City – Jebel Ali *

Sharjah

Hamriyah Free Zone

Sharjah Airport International Free Zone

UAQ

Umm Al Quwain Free Trade Zone in Ahmed Bin Rashid Port

Umm Al Quwain Free Trade Zone on Sheikh Mohammed Bin Zayed Road

RAK

RAK Free Trade Zone

RAK Maritime City Free Zone

RAK Airport Free Zone

Fujairah

Fujairah Free Zone

FOIZ (Fujairah Oil Industry Zone)

It is important to understand that not all transactions in the designated zone are out of scope of VAT. 

Need Help?

If you need more detailed guidance on the tax impact of transactions within the designated zones feel free to contact our expert team for a free 30 minute consultation.

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