The UAE has introduced new rules to clarify when foreign companies or investors may be subject to corporate tax on their investments in the country.

Under Cabinet Decision No. 35 of 2025, the UAE Ministry of Finance has outlined specific conditions under which non-resident investors in Qualifying Investment Funds (QIFs) or Real Estate Investment Trusts (REITs) will be seen as having a taxable presence (nexus) in the UAE.

What Does This Mean for You?

If you’re a non-resident juridical person (i.e. a foreign company or legal entity) investing in a QIF or REIT in the UAE, you’ll only be considered taxable in the UAE if:

• The fund does not distribute at least 80% of its income within nine months after the end of its financial year. In this case, your tax obligation starts from the date you acquired the investment.
• The fund does distribute 80% or more, but your taxable status starts from the date the dividend is paid.
• The QIF fails to meet the diversity of ownership rules during the tax period.

Good News for Passive Investors

If your investment is in QIFs or REITs that comply with the rules and none of the exceptions apply, you won’t be considered to have a taxable presence in the UAE. This means no corporate tax liability under the UAE’s tax system.

Why This Matters

This decision gives much-needed clarity to international investors. It helps ensure that foreign investment in UAE-based funds remains attractive and tax-efficient while aligning with the country’s new corporate tax framework.

In short, if you’re investing in compliant UAE funds or REITs as a non-resident, you’re unlikely to face UAE corporate tax unless certain distribution or ownership conditions aren’t met.

(Source: Wam)

The United Arab Emirates has once again been crowned the best place in the world for entrepreneurs, topping the Global Entrepreneurship Monitor (GEM) Report 2024/2025 for the fourth year running.

Outperforming 56 economies, the UAE has cemented its status as the ultimate hub for startups and small businesses, thanks to pro-business policies, easy access to funding, and a thriving investment scene.

UAE Leads in Business-Friendly Policies

The report reveals that the UAE ranks No.1 among high-income countries in 11 out of 13 key areas, including:

• Access to finance – Securing business funding has never been easier.
• Government backing – Tax benefits, reduced red tape, and strong policies to support startups.
• Education & training – Top-tier entrepreneurial learning from school to university.
• Market access – Fewer regulatory hurdles mean faster business growth.
• Tech & innovation – Cutting-edge research and development support.

Leadership’s Vision for a Global Business Hub

Alia bint Abdullah Al Mazrouei, Minister of State for Entrepreneurship, hailed the UAE’s achievement, calling it proof of the country’s bold vision and leadership’s commitment to making it the best place for businesses to start, scale, and succeed.

She highlighted that the UAE is not just leading the region but making waves on the global stage, with ambitious plans under the “We the UAE 2031” vision to become the world’s premier destination for SMEs and the new digital economy.

What’s Driving the UAE’s Success?

The report credits several game-changing policies and investments, including:

$8.7 billion poured into innovation and SME growth under the Projects of the 50 initiative.
100% foreign ownership of businesses – making the UAE a magnet for global entrepreneurs.
Record-breaking foreign investment in 2023, proving confidence in the UAE’s economy.

Entrepreneurial spirit is alive and kicking:

• 67% of adults know an entrepreneur or believe they have the skills to start a business.
• 70% of Emiratis see strong opportunities for launching their own ventures.
• 78% of new entrepreneurs prioritise social and environmental impact.
• 75% of startup founders plan to hire at least six employees in the next five years.
• 80% aim to go digital, keeping up with the latest business trends.
• 55% of UAE entrepreneurs already serve international customers, strengthening the UAE’s status as a global business powerhouse.

UAE Officially the Best Business Environment

On top of ranking first in the GEM report, the UAE also topped the National Entrepreneurship Context Index (NECI), proving it has the most supportive environment for startups and businesses.

(Source: Wam)

The Central Bank of the UAE (CBUAE) has imposed financial penalties amounting to Dh2.62 million on five banks and two insurance companies for failing to comply with international financial reporting standards.

The fines were issued due to violations of the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA) guidelines, which require financial institutions to ensure accurate reporting and due diligence. Despite being given sufficient time to correct their processes, these institutions failed to meet the necessary compliance standards.

The CBUAE stated that these measures aim to strengthen the UAE’s financial sector by enhancing transparency and aligning with global efforts to prevent tax evasion. This step also reinforces the country’s reputation as a trusted international financial hub committed to best practices.

(Source: Wam)