Dubai Textile City (DTC) – Non- Designated Zone

Dubai Textile City (DTC) is the Joint venture between TEXMAS and Dubai Port and Customs Authority to facilitate the Textile traders in Dubai and other part of the world. DTC is an entity located in Al Awir Free Zone, facilitating storage of textile fabrics for long periods without attracting customs duty, which is 5% currently. It is meant to help traders who are mainly in re-export business. (It is estimated that 85% of the goods imported to Dubai are re-exported, at one time or other).

Apart from these, since DTC also has the full support of Dubai Ports & Customs, the Customs authority will help processing visa requirements of DTC members. And last but not the least the rents and the terms of lease that are being offered to the members are very competitive and has been welcomed by Texmas and the textile merchants of the country.

Texmas is of the view that DTC will help to instill discipline into the trade. It is also expected that the worldwide publicity and promotion of the Textile City will bring new markets and customers to the traders in Dubai.

The Benefits of being in DTC are briefed below:

  • Exemption from the payments of custom duties for unlimited period.
  • Option to sublease the premises.
  • Option to transfer goods to the city without attracting customs duty.
  • Long lease period and attractive rent.
  • Stability and discipline is anticipated in DTC, a smart and integrated complex.

Business Activities

  • Textile
  • Fashion
  • Trading

Documents Required for Dubai Textile City Free Zone Company Registration

  • Passport copies of the shareholders
  • Passport copies and CV (resume) of the manager
  • Personal information sheet of each shareholder and manager Proof of trade name reservation (part of the process
  • Proof of initial approval for the
  • Notarized Memorandum of Association (MOA), Article of Association (AOA
  • Notarized and attested Power of Attorney
  • Lease agreement (a document) showing a physical address for your new business
  • Capital

Additional Requirement Applicable to Corporate Shareholders (Legal Person)

  • Board resolution to be resolute by the board of directors of your existing company/entity at the place of origin, expressing their intent for establishing a new setup abroad—attested by the UAE Embassy
  • Certificate of registration or business license or certificate of incorporation of your existing company/entity at the place of origin—it must be attested by the UAE Embassy.
  • Memorandum of Association (MOA) of your existing company/entity at the place of origin

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