We have discussed earlier the different options to have a licensed company, mainland, free zone, offshore. Now, what is this designated Zone? How does it differ from the others? Here we will also get into the list of designated zones.

Designated Zones are special areas where special VAT rules apply. The most important VAT application is that for certain transactions no VAT needs to be charged, mostly revolving trading of goods. These transactions will be out of scope of VAT. A general way to look at it is that all designated zones are free zones, but not all free zones are designated zones.

So what are the special characteristics of a designated zone?

1. The Designated Zone must be a specific fenced geographic area.
2. The Designated Zone must have security measures & Customs controls in place to monitor the entry and exit of individuals and the movement of goods to and from the Designated Zone.
3. The Designated Zone must have internal procedures regarding the method of keeping, storing, and processing of goods within the Designated Zone.
4. The operator of the Designated Zone must comply with the procedures set out by the FTA.