Industrial City of Abu Dhabi (ICAD)- Non- Designated Zone

The Industrial City of Abu Dhabi (ICAD) is located in the outskirts of Abu Dhabi city spreading over an area spanning over 40 square km., with multiple clusters and vantage locations.

Each cluster in ICAD has an world-class infrastructure and benefits from reliable utility and communication networks. ICAD offers easy access to fully–developed roads, storage and logistic hubs that have quick and easy access to multiple ports and airports. Market connectivity is easily attainable by sea, land and through more than 200 air routes from Abu Dhabi and Dubai.

Planned, constructed, and operated under the highest technical and environmental standards, ICAD complements existing and planned initiatives featuring adequate scalability to accommodate future demand and growth, appealing to many investors’ needs with a diversity of heavy and light industries that range from steel and metals to construction material, logistics, food and oil and gas.

Featured industries:

  • Engineering & Metals
  • General Industries
  • Chemical and Plastic
  • Oil and Gas services
  • Construction Materials
  • High Tech Industries
  • Advanced Factory Units

Business benefits within ICAD:

  • Excellent Infrastructure
  • Excellent Business Environment
  • Administrative Efficiencies
  • Strategic Locations – Abu Dhabi Airports, Abu Dhabi Ports
  • 0% tax
  • Repatriation of profits and capital.

Existing zones:

ICAD I: heavy-to-medium manufacturing, engineering and processing industries, including metal products, construction materials, fiberglass and plastics assembly. ICAD I extends over an area of 14km².

ICAD II: light-to-medium manufacturing, engineering and processing industries, including wood processing, engineering, oil and gas, construction materials, and chemicals.

ICAD III: light-to-medium engineering and processing business with an international focus. Wood processing and engineering, chemicals and plastics, construction materials, high-tech industries, food and textiles are the key target sectors for this zone.

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