Manufacturing is a core Qualifying Activity. Forensic scrutiny focuses on the 'Substantial Transformation' test. If the activity does not result in a new product with a different HS Code or significant value-add, the FTA may reclassify the income as 'Distribution of Goods', which requires the customer to be a Reseller for the 0% rate to apply.
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Legal Reference
Article 2(1)(a) of Ministerial Decision No. 229 of 2025
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Misclassification of 'simple assembly' or 'packaging' of imported components as 'Manufacturing' to exploit the 0% rate on mainland sales.
11 licensable activities under this classification
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