Ajman Free Zone (AFZ)-Designated Zone
Ajman Free Zone (AFZ) was established in 1988, leading to massive industrial development in Ajman by attracting a great number of companies to benefit from the investment privileges, thereby strengthening industry and trade and the financial sector in the UAE.
AFZ provides competitive privileges and facilities allowing companies to get a considerable return on their investment. AFZ continues to develop its infrastructure, spending millions of Dirhams along its free zone area of more than one million square meters.
- 100% ownership of establishment/company.
- 100% foreign ownership.
- Easy transfer of capital and profits.
- Exemption from personal income tax.
- Exemption from import and export duties.
- Exemption from other taxes.
- Competitive prices on facility usage.
- Competitive prices for power/electricity.
- Competitive prices on leasing.
- Easy access to low cost labor.
- Well-developed infrastructure.
- One-stop counter service for effecting transactions (residency, visa, etc.).
- Fast and easy procedures and in most cases, license within 24 hours.
Types of licenses provided:
- Business Licenses.
- E-Commerce Licenses: electronic trading activities.
- Service Licenses: service activities within the free zone such as management, marketing, IT consultancies etc.
- Industrial Licenses
Legal entities under UAQ FTZ:
- Free Zone establishment (FZE) – a single shareholder.
- Free Zone Company (FZC) – two to 50 shareholders.
- A branch of an existing company.
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:
Tel: +971 4 343 8022