Manufacture of wearing apparel, except fur apparel

Manufacturing is a Qualifying Activity under the 'Manufacturing of goods or materials' category. Forensic scrutiny focuses on the Core Income Generating Activities (CIGA), specifically ensuring that the labor, machinery, and raw material processing occur within the Designated Zone. If the entity merely performs 'packaging' or 'labeling' of apparel manufactured elsewhere, the FTA may reclassify the income as 'Trading', which is an Excluded Activity unless conducted with other Free Zone Persons.

Audit Red Flag

Sub-contracting the actual stitching or assembly to mainland factories while booking the full revenue under the Free Zone entity.

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