Dubai Cars and Automotive Zone (DUCAMZ)- Designated Zone

Established in 2000 and located in Ras Al Khor, Dubai, DUCAMZ has a total size of 8 million sq.ft. and has been created with the objective of re-exporting used cars to Asian & African markets, under JAFZA Authority. DUCAMZ offers comprehensive infrastructure to meet the high demands in the automotive industry, providing competent highway connectivity, easy access to airway and sea modes of transportation and boasting all mod cons necessary to relocate cars within and outside the region. DUCAMZ displays and array of renowned brands such as: Al Tayer Motors, Luxury Motors Limited, Heewad Motors, Al Habib Motors, Al Meezan Motors, and other related enterprises.

Business benefits of setting up a company within DUCAMZ:

  • 100% foreign ownership;
  • Attractive working environment;
  • Access to a market of over 2 billion people;
  • Modern efficient communications;
  • No currency restriction;
  • Competitive freight charges;
  • No corporate taxes for 50 years – a concession that is renewable;
  • No restrictions on maximum import of automobiles;
  • Hassle free clearance from: Police (traffic department), Customs, Port and Bank;
  • Excellent support services from Dubai Ports Authority & Other service institutions such as: Shipping, Insurance, Banking, Automobile Workshops & Restaurants;
  • No import/export duties;
  • Transfer of ownership within the zone.

Types of company formation within DUCAMZ:

  • Free Zone Company (FZCO):
  • The company can have multi-shareholders companies;
  • Minimum 2 shareholders, maximum 5;
  • No local partner required;
  • Minimum capital requirement 100,000 AED.

Value Added Tax (VAT):

Value Added Tax (VAT) has been introduced across the UAE on 1 January 2018 at a standard rate of 5%.

Who should register for VAT?

A business whether situated in designated zone or non-designated zone or outside free zone should register for VAT if the taxable supplies and imports exceed the mandatory registration threshold of AED 375,000 within preceding 12 months or it is anticipated  that the total value of taxable supplies exceed AED 375,000 in the next thirty 30 days. Upon registration, a tax registration number (TRN) would be issued to business by the Federal Tax Authority.

What is a designated zone?

A Designated zone is a specified fenced geographical area having security measures and customs controls in place to monitor entry and exit of individuals and the movement of goods to and from the area. Following free zones are declared as designated zones.

a. Free Trade Zone of Khalifa Port
b. Abu Dhabi Airport Free Zone
c. Khalifa Industrial Zone
d. Jebel Ali Free Zone (North-South)
e. Dubai Cars and Automative Zone (DUCAMZ)
f. Dubai Textile City
g. Free Zone Area in Al Quoz
h. Free Zone Area in Al Qusais
i. Dubai Aviation City
j. Dubai Airport Free Zone
k. Hamriyah Free Zone
l. Sharjah Airport International Free Zone
m. Ajman Free Zone
n. Umm Al Quwain Free Trade Zone in Ahmed Bin Rashid Port
o. Umm Al Quwain Free Trade Zone on Sheikh Mohammed Bin Zayed Road
p. RAK Free Trade Zone
q. RAK Maritime City Free Zone
r. RAK Airport Free Zone
s. Fujairah Free Zone
t. FOIZ (Fujairah Oil Industry Zone)

What is a non-designated zone?

Any free zone which is not declared as designated zone is a non-designated zone. In other words a non – designated zone is any geographical area within UAE which does not have any security measures and custom controls in place to monitor entry and exit of goods and individuals. Eg. DMCC, Dubai Media city, DIFC and Dubai Internet city.

What transactions are subject to VAT within Designated zones?

a) Goods transferred between designated zones shall not be subject to VAT. However goods supplied by an entity in the designated zone to entities outside the designated zone are subject to 5% VAT.
b) Services provided by an entity to other entities inside the designated zone or outside the designated
zone are subject to 5% VAT.
c) Professional fees for services are subject to VAT @ 5%.

What government/free zone fees (License/Visa/rent) are subject to VAT?

In case of designated zones the trade license fees, visa fees, lease rentals will not be subject to VAT. And in case of non-designated zones the trade license fees and visa fees are not subject to vat however rent is subject to 5% VAT.

If you need additional assistance or have any questions, please contact the following:
Email: legal@jitendragroup.ae
Tel: +971 4 343 8022