Why Zona franca and Mainland Trade Are Treated Differently
A Zona franca is a geographically and legally defined business jurisdiction with its own licensing authority and operating rules.
A Zona franca company is authorised to conduct activities under its Zona franca licencia. Its licencia does not automatically become a mainland commercial licencia.
When goods move from a Zona franca or Designated Zone into the mainland, the movement can also trigger:
The commercial contract and physical movement of the goods must be planned together.
"Zona franca" and "Designated Zone" are not interchangeable terms for IVA purposes.
A Zona franca is established under the relevant EAU legal and licensing framework.
A Designated Zone is a specific area recognised under a Cabinet Decision for particular IVA treatment, provided the applicable conditions are satisfied.
Every Designated Zone is associated with a Zona franca framework.
- Customs clearance
- Customs duty
- Import IVA
- Importer-of-record responsibility
- Product-registration requirements
- Municipality controls
- Conformity requirements
- Excise Tax where relevant
- Warehouse and transport documentation
- Zona franca Does Not Always Mean Designated Zone
- Therefore:
- Route 1: Sell Through a Licensed Mainland Distributor