Building of ships and boats

ISIC 301 falls under 'Manufacturing of goods or materials' per Article 2(1)(a). Forensic audit will verify that the core income-generating activities (CIGA)—such as hull fabrication, engine installation, and outfitting—are physically performed within the Free Zone. Revenue from the sale of ships to mainland UAE entities must be scrutinized against the 'Designated Zone' rules for the sale of goods to maintain QFZP status.

Audit Red Flag

Misclassification of 'Ship Repair and Maintenance' (Service) as 'Building of Ships' (Manufacturing) to circumvent the 0% threshold for non-ancillary services.

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