Which UAE Free Trade Zones are exempt from VAT in 2021

Free trade zones in the UAE are areas in the emirates with a special tax and customs regime. There are a total of 45 Free Economic Zones in the country. Twenty Free Trade Zones in the UAE 2021 are exempt from VAT, i.e. are outside the state in terms of taxes. This means that no VAT is charged for the movement of goods between these zones.

Which FEZs are exempt from VAT

There are several VAT exempt zones in each emirate:

• Abu Dhabi - 3;
• Dubai - 7;
• Sharjah - 2;
• Umm Al-Queen - 2;
• Ras Al Khaimah - 2;
• Fujairah - 2;
• Ajman - completely.

Each FEZ is interested in certain types of businesses and encourages their development. Therefore, before opening a company in a UAE FEZ, find out whether the conditions are suitable for you with the help of IT-OFFSHORE specialists.

Ajman (AFZA)

The Ajman zone was established in 1988 and is on the list of the most popular offshore companies. AFZA allows investors to open a company in AFZA in 2021 and trade without hiring local staff. They easily issue visas to foreign employees here, allocate plots for construction, warehouses and offices.

Ajman supports different types of businesses. It pays special attention to mass media and information technology, which created a separate territory independent of AFZA - Ajman Media City.

Dubai Airports Free Zone (Abu Dhabi)

In 2010, Abu Dhabi Executive Council listed Abu Dhabi International, Al Ain International and Al Bateen Executive Airports as FEZs. Entrepreneurs were given access to warehouses, offices, building plots, and incentives.

Companies that decide to open a company in the Dubai Airports Free Zone in 2021 will receive benefits such as:

• zero corporate tax and income tax;
• no customs duties;
• proximity to the airport;
• quick and easy registration and licensing;
• 24-hour security and access to facilities;
• in-house IT and telecommunications services;
• access to regional markets.

Jebel Ali (Dubai)

Jembel Ali is a city that positions itself as the world's largest humanitarian aid center. Jembel Ali is home to nine branches of the UN and various organizations that provide diverse assistance. Some help people who have got into difficult situations, others support in economic development.

In Djembel-Ali, there are thousands of registered foreign companies that operate in other directions. This was facilitated by the convenient location, the accessibility of world-renowned concerns, and the following benefits:

• full repatriation of profits and capital;
• free transactions;
• no import and export duties.

The largest port in the Middle East, Jebel Ali, is nearby. If you decide to open a company in Jebel Ali in 2021, facilitate your access to markets in West and South Asia, CIS, and Africa.

Important nuances

It should be noted that the exemption from VAT in FEZ has its own specifics, and to do everything correctly, please contact IT-OFFSHORE specialists. For example, the following it is not taxable:

• Any transfer of goods between zones that are exempt from VAT.
• Shipment of goods from the zone to other Gulf countries.
• Imports of goods from other countries and free zones.

One must be careful when doing this. For the exemption to be valid, the goods must arrive in the form in which they were sent (not lost on the road, not sold). Otherwise you have to pay VAT.

The exemption does not apply when goods are sent from the FEZ to other points in the UAE and back. In this case, the standard tax rate is 5%. Also, VAT must be paid for the provision of services, including water and energy. There are many other nuances, which our specialists will help to understand.