Ministerial Decision No. 229 of 2025 · UAE Federal
Lists the qualifying activities (manufacturing, commodity trading, fund management, headquarter and treasury services, designated-zone distribution, logistics and others) and excluded activities (dealings with natural persons, banking, insurance, finance, immovable property) of a Qualifying Free Zone Person, sets the de minimis limit at the lower of 5% of revenue or AED 5 million, and repeals Ministerial Decision No. 265 of 2023.
Ministerial Decision No. 229 of 2025 is the current list of Qualifying Activities and Excluded Activities that decides whether a free zone company can be a Qualifying Free Zone Person and pay 0% Corporate Tax on its Qualifying Income under Article 18 of the Corporate Tax Law (Federal Decree-Law No. 47 of 2022) and Cabinet Decision No. 100 of 2023. It was issued on 28 August 2025, repeals Ministerial Decision No. 265 of 2023, and applies retroactively from 1 June 2023, so it governs every Tax Period of the regime.
Article 2(1) lists fourteen Qualifying Activities: manufacturing and processing of goods or materials; trading of Qualifying Commodities; holding shares and other securities for investment (held at least 12 months); ownership, management and operation of Ships in international transport; reinsurance; fund management and wealth and investment management under a UAE Competent Authority; headquarter services to Related Parties; treasury and financing services to Related Parties or for the company's own account; financing and leasing of Aircraft; distribution of goods in or from a Designated Zone to resellers, processors or public benefit entities, with imports entering through the Designated Zone; logistics services; and activities ancillary to any of these. Article 2(2) lists the Excluded Activities: transactions with natural persons (except for shipping, fund management, wealth management and aircraft leasing), banking, insurance (other than reinsurance and captive insurance within headquarter services), finance and leasing (other than commodity trading, shipping, treasury and aircraft leasing), ownership or exploitation of immovable property other than Commercial Property in a Free Zone transacted with a Free Zone Person, and activities ancillary to these. Article 2(3) and (4) define each activity and the ancillary test.
Compared with the 2023 decision, Qualifying Commodities now cover metals, minerals, industrial chemicals, energy and agricultural commodities and their by-products, and environmental commodities such as carbon credits, wherever a Quoted Price exists; commodity trading extends to structured commodity financing but not to a company earning 51% or more of its Revenue from distribution, warehousing or logistics; treasury services may be for the company's own account; and Designated Zone distribution may be to public benefit entities.
Article 3 sets the de minimis test: non-qualifying Revenue must not exceed the lower of 5% of total Revenue and AED 5,000,000 in the Tax Period. Article 4 provides the formula for Qualifying Income from Qualifying Intellectual Property, based on Qualifying Expenditures with a 30% uplift, Overall Expenditures and Overall Income, with supporting records to be kept. Article 5 adds two conditions to Article 18(1) of the law: the de minimis test and audited financial statements under Ministerial Decision No. 84 of 2025. A Qualifying Free Zone Person that fails any condition at any time in a Tax Period loses the status from the start of that period and for the following four Tax Periods.
Free Zone Persons seeking or holding Qualifying Free Zone Person status under Article 18 of the Corporate Tax Law, in every UAE free zone, from 1 June 2023: the list determines which of their licence activities produce Qualifying Income at 0% and which are Excluded Activities taxed at 9%.
English official text in 7 articles. Open the full text or jump to a provision:
| Article 1 | Defines Qualifying Commodities as metals, minerals, industrial chemicals, energy and agricultural commodities and Associated By-products (not retail-packaged) and environmental commodities such as carbon credits, provided a Quoted Price exists on a Recognised Commodities Exchange Market or recognised price reporting agency. |
| Article 2(1) | Qualifying Activities: manufacturing; processing; trading Qualifying Commodities; holding shares and securities for investment; Ship ownership, management and operation; reinsurance; fund management; wealth and investment management; headquarter services to Related Parties; treasury and financing to Related Parties or own account; Aircraft financing and leasing; Designated Zone distribution; logistics; and ancillary activities. |
| Article 2(2) | Excluded Activities: transactions with natural persons (except shipping, fund management, wealth management and aircraft leasing), banking, insurance (other than reinsurance and captive insurance), finance and leasing (other than commodity trading, shipping, treasury and aircraft leasing), immovable property other than Free Zone Commercial Property transacted with a Free Zone Person, and ancillary activities. |
| Article 2(3)(c) | Trading of Qualifying Commodities means physical trading, associated hedging derivatives and structured commodity financing, but not where the Qualifying Free Zone Person earns 51% or more of its Revenue from distribution, warehousing, logistics or inventory management. |
| Article 2(3)(d) | Holding shares and securities for investment covers shares, equitable interests and negotiable or non-negotiable financial instruments (excluding securitisations of receivables from non-financial assets), deemed held for investment when held for an uninterrupted 12 months. |
| Article 2(3)(l) | Designated Zone distribution covers buying and selling tangible goods, with import, storage, handling and export, conducted in or from a Designated Zone with imports entering through it, supplied to customers who resell, process or alter the goods, or to public benefit entities. |
| Article 2(4) | An activity is ancillary where it is necessary for the main activity or makes a minor contribution so closely related that it should not be regarded as a separate activity. |
| Article 3 | The de minimis requirement is met where non-qualifying Revenue in the Tax Period does not exceed the lower of 5% of total Revenue and AED 5,000,000. |
| Article 4 | Qualifying Income from Qualifying Intellectual Property is computed by formula from Qualifying Expenditures (own or non-Related Party outsourced R&D) with a 30% uplift capped at Overall Expenditures, and Overall Income; ownership, expenditure and income records must be kept for the FTA. |
| Article 5(1) | In addition to Article 18(1) of the law, a Qualifying Free Zone Person must meet the de minimis test and prepare audited financial statements under Ministerial Decision No. 84 of 2025. |
| Article 5(2) | A Qualifying Free Zone Person that fails any condition at any time in a Tax Period ceases to qualify from the beginning of that period and for the subsequent four Tax Periods. |
| Articles 6–7 | Repeals Ministerial Decision No. 265 of 2023; the decision came into effect on 1 June 2023. |
The decision sets no fines, but Article 5(2) provides that failing any condition at any point in a Tax Period removes Qualifying Free Zone Person status from the start of that period and for the following four Tax Periods, so the company pays 9% on its Taxable Income for five periods. Under-declared tax then attracts the penalties in Cabinet Decision No. 75 of 2023.
This list decides which of our free zone clients' activities earn the 0% rate; we map every free zone licence activity against it before advising on structure. In practice the Excluded Activities matter as much as the Qualifying ones: a DMCC or RAKEZ company selling to individuals, earning rent on property outside a free zone, or lending to third parties is outside the regime, and the de minimis test only tolerates the lower of 5% of Revenue and AED 5,000,000 of such income. For trading companies the usual outcome is that mainland sales to resellers are taxed at 9% unless the goods move through a Designated Zone, so we model both regimes before the client elects. The 2025 decision's wider commodities definition and the own-account treasury activity helped several of our trading and holding clients. Because losing the status costs five Tax Periods, we build the audit under Ministerial Decision No. 84 of 2025 into the calendar and review the de minimis position quarterly rather than at year-end.
| Repeals | Ministerial Decision No. 265 of 2023 |
| Cites | Qualifying Income Decision (Free Zones) · VAT Designated Zones Decision · Central Bank Law 2018 (repealed) · Tax Procedures Law · Corporate Tax Law · VAT Law · Qualifying and Excluded Activities Decision (2023, superseded) · Audited Financial Statements Decision (2025) |
“Cites” and “Cited by” are built automatically from references in the full texts held in this library; they cover only instruments in the library.
Qualifying and Excluded Activities Decision (2023, superseded)
The second list of qualifying and excluded activities for free zone companies, with the de minimis rule, qualifying intellectual property income and the audited financial…
Qualifying Income Decision (Free Zones)
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Corporate Tax Law
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Audited Financial Statements Decision (2025)
For tax periods starting on or after 1 January 2025, requires audited financial statements from taxable persons (other than tax groups) with revenue above AED 50 million …
VAT Designated Zones Decision
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Small Business Relief Decision
Lets a resident taxable person with revenue of AED 3 million or less in the current and all previous tax periods elect to be treated as having no taxable income, for tax …
Corporate Tax Penalties Decision
Lists the administrative penalties for corporate tax violations: AED 10,000 for failing to keep records (AED 20,000 on repeat), AED 500 per month rising to AED 1,000 for …
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