Manufacture of knitted and crocheted apparel

Manufacturing is a Qualifying Activity under MD 229 of 2025. Forensic auditors will verify the 'Substantial Transformation' threshold to ensure the activity is not merely 'Distribution' in disguise, which carries stricter nexus and counterparty requirements. Evidence of specialized machinery (knitting machines, looms) and technical staff on the Free Zone payroll is essential to satisfy the CIGA test.

Audit Red Flag

Contract manufacturing arrangements where the actual knitting/crocheting is outsourced to a third-party mainland factory while the Free Zone entity merely holds the title to the goods.

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