Manufacture of other chemical products

Under MD 229 of 2025, 'Manufacture of goods or materials' is a Qualifying Activity. For chemical products, the FTA will scrutinize the 'substantial transformation' test. If the entity merely bottles or labels pre-mixed chemicals, it may be reclassified as 'Trading' (an Excluded Activity if conducted with non-Free Zone Persons), losing the 0% benefit. Forensic audit will focus on electricity consumption logs and raw material input-output ratios to verify actual manufacturing.

Audit Red Flag

Re-invoicing of chemicals manufactured by a mainland affiliate or third-party without significant transformation occurring within the Free Zone entity.

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