Manufacture of parts and accessories for motor vehicles

Manufacturing is a Qualifying Activity. Forensic audit focuses on the 'Substantial Transformation' test to distinguish between manufacturing and mere distribution. Under MD 229 of 2025, the entity must demonstrate that the value-add and technical processing of motor vehicle components occur within the Free Zone boundaries using its own or leased assets.

Audit Red Flag

Outsourcing of Core Income Generating Activities (CIGA) to mainland affiliates or third-party logistics providers without maintaining adequate full-time employees (FTEs) in the Free Zone.

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