8 September 2026 · vs Free Zone
Designated Zone vs Ordinary Free Zone
A free zone is an economic licensing zone; a VAT designated zone is a specific customs-controlled area named by Cabinet Decision for VAT purposes. They are not the same. Many free zones are not designated zones, and even in a designated zone the VAT relief applies only to goods, not services. So 'we are in a free zone' does not mean 'we are VAT-free'; you must check the official designated-zone list.
Exiloz Management & Tax Consultant · Dubai-based FTA-focused advisory · VAT, corporate tax & accounting
Two different things
Different purposes, different lists.
- Free zone = economic/licensing zone.
- Designated zone = VAT customs-controlled area.
- Not every free zone is designated.
- Check the Cabinet Decision list.
Do not assume relief
Free-zone status is not VAT relief.
- Free-zone licence alone gives no VAT relief.
- Designated status only helps with goods.
- Services are taxed regardless.
- Confirm before you zero-rate.
Related guides
Frequently Asked Questions
For clearing up the confusion.
Is every free zone a designated zone?
No. Only specific areas named by Cabinet Decision are designated zones.
Does a free-zone licence make me VAT-free?
No. Free-zone status alone gives no VAT relief; designated status only affects goods.
How do I check?
Check the official designated-zone list for your specific area.
Can Exiloz clarify our status?
Yes. We confirm whether your free zone is a designated zone.
Know your zone
Exiloz confirms whether your free zone is a designated zone for VAT.