Manufacture of railway locomotives and rolling stock

Qualifying · 0% eligible

Forensic Analysis

DZ requiredSubstance: HIGHAI-derived

Manufacturing of railway equipment is a Qualifying Activity under the 'Manufacturing of goods or materials' category. Forensic audit will focus on whether the 'Substantial Transformation' threshold is met within the Free Zone boundaries. If the activity is deemed mere assembly of kits with less than 25% value-add, the FTA may reclassify it as 'Trading', which is an Excluded Activity when dealing with mainland non-Free Zone persons.

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Legal Reference

Ministerial Decision No. 229 of 2025, Article 2, Clause 1(a)

Audit Red Flag

Contract manufacturing or 'substantial transformation' occurring in mainland UAE facilities while booking the full revenue under the Free Zone entity.

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