Dubai Knowledge Park (DKP) – Non- Designated Zone

Established in 2003 as part of TECOM Group, Dubai Knowledge Park (DKP) aims to develop the region’s talent pool and establish the UAE as a knowledge-based economy. DKP is a unique hub that offers the best selection of programmes in Human Resource Management (HRM), Consultancy, Training and Personal Development. Students receive diplomas and certificates of the highest calibre from DKP’s top-class Business Partners.With the provision of quality training institutes and recruitment consultancy firms, DKP is helping to meet the needs of business by offering required training and skills development programs to professionals and by providing a home of recruiters who will then match these new skills with employers.

Company formation types:

  1. Free Zone Limited Liability Company (FZ-LLC)

This is a company formed as an independent legal entity with its own shareholders. The minimum capital requirement for incorporation depends on the business activity.

  1. Branch of a Foreign/UAE Company

A branch is considered a legally dependent part of its parent company, even if its place of business is not in the main company’s headquarters. (No minimum capital required).

  1. Freelancer

The Freelance permit offers the ability to operate as a freelance professional. The permit identifies you as a sole practitioner It enables you to conduct your business in your birth name as opposed to a brand name.

Key benefits of establishing a company in DKP:

  • Ownership, Taxation, Repatriation Advantage.
  • 100% foreign ownership.
  • 100% repatriation of capital and profits.
  • No personal income tax.
  • No corporate tax.
  • DKP free zone partners also benefit from partnership with government and regulatory authorities.

Permitted activity:

Computer Training/ Language Training/ Fine Arts Training/ Tutoring Services/ Technical & Occupational Skills/ Professional & Management Development Training/ Child Skills Development Training/ Human Resources Consultancy/ Exe. Search Research & Development/ Content Development/ Assessment & Testing/ Freelancers and Association (Non-Profit Organizations).

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