--- title: UAE Designated Zones for VAT, the List and the Rules url: https://dm-uae.com/guides/uae-vat-designated-zones/ description: Goods moved within a VAT designated zone can sit outside UAE VAT; services and mainland sales stay taxable. The FTA list and what it means for a goods trader. updated: 2026-11-11 source: DM Consultancy (dm-uae.com). The HTML page is the reference version. --- Updated 11 November 2026 # UAE designated zones for VAT, list and rules In a VAT designated zone, some movements of goods fall outside UAE VAT. Lease in a zone off the list, and every movement of your stock is taxed just as it would be on the mainland. Goods only Services still taxed Same AED 375,000 test [Send my trading setup proposal](https://dm-uae.com/contact/?intent=proposal#message) [Book a 15-minute call](https://calendar.google.com/calendar/appointments/schedules/AcZssZ3iUsl6OhHy5YEyFEpygJBYbMbGDZ7fIiA2jzn36qH26vKRo_PDEpn0EzJeySwjrl1R9zHtZnVN?gv=true) Rated 5.0 on Google ![Cartons of goods stacked high in a warehouse under a blue steel roof](https://dm-uae.com/assets/images/pages/guides__uae-vat-designated-zones-w960.webp) Designated zone at a glance Goods between zones Can sit outside VAT Services Taxed as anywhere in the UAE Registration Same AED 375,000 test - One senior advisor on every file. - Zone and premises checked against the FTA list before you sign. - Reply within two business hours. At a glance A VAT designated zone is a fenced free zone under customs control, named on the FTA’s list and treated as outside the UAE for qualifying movements of goods. Services, goods used in the zone and sales to mainland customers stay subject to VAT, and the AED 375,000 registration test does not change. ## Your trading company, set up for VAT ### Zone The zone matched to where your goods move. - Designated or standard free zone, checked first - Warehouse, office or both ### VAT registration Registered on time. - AED 375,000 over the past 12 months - Or expected in the next 30 days ### Stock records Every movement recorded the way the FTA expects to see it when it asks for your business flow. - Goods in, out and between zones - Export proof or import VAT kept ### Each return Prepared and reviewed before the deadline. - Zone and mainland sales kept apart - Mainland sales invoiced with VAT ## Which UAE free zones are designated zones? | Free zone | Emirate | Designated zone | |---|---|---| | **Jebel Ali Free Zone (North and South)** | Dubai | Yes, on the FTA list | | **Khalifa Industrial Zone (KIZAD)** | Abu Dhabi | Yes, on the FTA list | | **Hamriyah Free Zone** | Sharjah | Yes, on the FTA list | | **Sharjah Airport International Free Zone (SAIF Zone)** | Sharjah | Yes, on the FTA list | | **Ajman Free Zone** | Ajman | Yes, on the FTA list | | **RAK Free Trade Zone, RAK Maritime City, RAK Airport Free Zone** | Ras Al Khaimah | Yes, on the FTA list | | **DMCC** | Dubai | No, VAT as on the mainland | | **IFZA** | Dubai | No, VAT as on the mainland | | **Meydan Free Zone** | Dubai | No, VAT as on the mainland | | **ADGM** | Abu Dhabi | No, VAT as on the mainland | | **Shams** | Sharjah | No, VAT as on the mainland | | **SPC Free Zone** | Sharjah | No, VAT as on the mainland | | **Ajman NuVentures Centre Free Zone (ANCFZ)** | Ajman | No, VAT as on the mainland | The list names further areas across the emirates. A zone keeps the status only while it meets the FTA’s fencing and customs tests, so we confirm it for your premises before you sign. [Send my trading setup proposal](https://dm-uae.com/contact/?intent=proposal#message) ## How designated zone status changes VAT | Supply | VAT treatment | |---|---| | **Goods moved within or between designated zones** | Can fall outside UAE VAT where the conditions are met | | **Goods used or consumed in the zone** | VAT applies | | **Services supplied in the zone** | VAT applies, as anywhere in the UAE | | **Sales to mainland customers** | VAT applies | | **VAT registration test** | Unchanged, AED 375,000 over 12 months | | **E‑invoicing duty** | Unchanged | | **Corporate tax** | A separate test under corporate tax law | Registration follows the usual rules for [VAT registration in the UAE](https://dm-uae.com/guides/uae-vat-registration-explained/), and the FTA may ask how your goods flow between zones. ## Who gains from a designated zone? Distributors, re-exporters and logistics operators whose stock moves between zones or leaves the country. A business that sells services, or sells mostly to the mainland, gains little. ## Is every free zone a designated zone? No. Most [UAE free zones](https://dm-uae.com/free-zones/) are not on the list. A company in one of them accounts for VAT exactly as a mainland business does. ## Do I charge VAT on goods in a designated zone? Often not on goods moved within or between designated zones, where the conditions are met. Our [VAT services in Dubai](https://dm-uae.com/tax-vat/) keep each sale on the right side of that line. ## Find your business type Four business types we set up most often. Only the goods side gains. - ### Distributor or wholesaler Stock held and moved between designated zones can sit outside VAT. [Send my trading setup proposal](https://dm-uae.com/contact/?intent=proposal#message) - ### Re‑exporter Goods shipped abroad from the zone, with the export evidence kept. [Send my trading setup proposal](https://dm-uae.com/contact/?intent=proposal#message) - ### Online seller to UAE buyers Sales to mainland customers carry VAT from any zone. [Send my trading setup proposal](https://dm-uae.com/contact/?intent=proposal#message) - ### Services company Services are taxed as anywhere in the UAE, whatever the zone. [Send my trading setup proposal](https://dm-uae.com/contact/?intent=proposal#message) ## Get your trading setup proposal Tell us what you trade and where it ships, and a reply comes within two business hours. [Send my trading setup proposal](https://dm-uae.com/contact/?intent=proposal#message)[Book a 15-minute call](https://calendar.google.com/calendar/appointments/schedules/AcZssZ3iUsl6OhHy5YEyFEpygJBYbMbGDZ7fIiA2jzn36qH26vKRo_PDEpn0EzJeySwjrl1R9zHtZnVN?gv=true) ## What clients say about DM Consultancy In their own words on Google and LinkedIn, each linked to the original. [**5.0**Read the reviews on Google](https://share.google/hsoSSa4Pcj8vqPfZK) From the initial assessment to final implementation, the team demonstrated strong expertise, structured methodology, and clear communication. **Graphic Industry** Business setup client [Read on Google](https://share.google/DNfn0YlAqRF2CLzgF) - Manish demonstrated deep expertise, professionalism, and a thorough understanding of the incorporation process. Proactive, responsive, and efficient. **Rajesh Suguru**Global CEO, Digital Disruption Technologies [LinkedIn](https://www.linkedin.com/in/manishpandeydxb/details/recommendations/?detailScreenTabIndex=0) - They've assisted me and my family obtain golden residency in the UAE. All timelines were clearly defined and all processes transparent. **Nicole Flandorp**Golden Visa client [Google](https://share.google/o44JjOh0sxwqio2op) - Manish was instrumental in setting up our company in Dubai. Always responsive, readily available to answer our questions. **Omer Liaquat**Project Manager [LinkedIn](https://www.linkedin.com/in/manishpandeydxb/details/recommendations/?detailScreenTabIndex=0) - He was super quick to reply, very efficient and honestly the best I have worked with. He made the whole process so much easier. **Abdolah Keria**Visa client [Google](https://share.google/XFDEHwqfqEyj3TOij) [Client case studies](https://dm-uae.com/case-studies/) follow seven files from the first step to the documented result. ## UAE designated zone questions ### What is a designated zone in the UAE? A free zone named on the FTA’s designated zones list that is fenced, with customs controls at its gates. For VAT, qualifying movements of goods inside it are treated as taking place outside the UAE. ### What does designated zone mean for VAT? It changes how some supplies of goods are taxed, and nothing else. Goods moved within or between designated zones can fall outside VAT where the conditions are met, while services and mainland sales stay taxable. ### Which free zones are designated zones in the UAE? The FTA list names Jebel Ali Free Zone, KIZAD, Hamriyah, SAIF Zone, Ajman Free Zone and the RAK Free Trade Zone, Maritime City and Airport areas, with further areas across the emirates. ### Is JAFZA a designated zone? Yes, both North and South. Goods moving within JAFZA or to another listed zone can sit outside VAT where the conditions hold. Our [JAFZA company setup](https://dm-uae.com/free-zones/jafza/) page covers the licence. ### Is DMCC a designated zone? No. DMCC is not on the FTA’s designated zones list, so for VAT a DMCC company is treated like a mainland business, goods included. Traders who need designated status choose a listed zone. ### Is IFZA a designated zone? No. IFZA is not on the FTA’s designated zones list, so its companies account for VAT as mainland businesses do. Goods traders who need the status set up in a listed zone. ### What is the difference between a designated zone and a free zone? A free zone is a licensing area. A designated zone is a free zone the FTA lists for VAT because it is fenced and under customs control, and most free zones are not on that list. ### Is VAT applicable in Jebel Ali Free Zone? Yes, for most supplies. A JAFZA company charges VAT on its services, on goods used inside the zone and on sales to the mainland. The relief covers qualifying goods moving between listed zones. ### Do I need to register for VAT in a designated zone? Yes, once taxable supplies and imports pass AED 375,000 over the past 12 months, the same test as everywhere else. The FTA may also ask how your goods move between zones. ### Are services in a designated zone subject to VAT? Yes, under the normal rules. Designated status touches goods only, so a consulting firm or agency in a listed zone charges VAT on its fees as it would in Business Bay. ### Do goods sold from a designated zone to a mainland customer carry VAT? Yes. A sale from a designated zone to a customer on the UAE mainland is taxable, and your records need to show where each consignment went. ### Is a designated zone the same as a qualifying free zone for corporate tax? No. Corporate tax uses its own definitions. Distribution in or from a designated zone can count as qualifying activity for a [Qualifying Free Zone Person](https://dm-uae.com/guides/qfzp-uae-free-zone-tax-explained/), alongside every other condition. ## Your trading company and VAT set up with DM Consultancy [Send my trading setup proposal](https://dm-uae.com/contact/?intent=proposal#message)[Message on WhatsApp](https://wa.me/971585562152?text=Hi%2C%20I%27d%20like%20to%20check%20the%20VAT%20position%20for%20my%20trading%20company.) Rated 5.0 on Google Registration and each return are covered on our [VAT services in Dubai](https://dm-uae.com/tax-vat/) page. ![Portrait of your advisor](https://dm-uae.com/assets/images/manish-portrait-cut-w480.webp)