The UAE has announced new tax rules for non-resident investors.
The Ministry of Finance has announced the issuance of Cabinet Decision No. 35 of 2025 on the Determination of a Non-Resident Person’s Nexus in the State for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses which replaces the provisions of Cabinet Decision No. 56 of 2023.
The new decision specifies the cases in which a non-resident juridical investor in a Qualifying Investment Fund (QIF) or Real Estate Investment Trust (REIT) is considered to have a nexus in the UAE and is therefore subject to taxation.
UAE tax rules
Under the new decision, a nexus for a non-resident juridical investor in a QIF that breaches the real estate threshold will arise either on the date of the dividend distribution if the QIF distributes 80 per cent or more of its income within nine months from its financial year-end, or the date the ownership interest is acquired, in the case where the QIF fails to distribute at least 80 per cent of its income within nine months from its financial year-end.
A nexus will also be created for a non-resident juridical investor in a QIF that fails to meet the diversity of ownership conditions in the tax period in which the failure occurs.
A nexus for a non-resident juridical investor in a REIT will arise either on the date of the dividend distribution if the REIT distributes 80 per cent or more of its income within nine months from its financial year-end, or the date the ownership interest is acquired, in the case where the REIT fails to distribute at least 80 per cent of its income within nine months from its financial year-end.
Other than the above cases, non-resident juridical investors investing exclusively in a QIF and/or REIT will not be considered to have a taxable presence in the UAE.
This decision reduces foreign investors’ compliance burdens and reflects the UAE government’s commitment to providing an attractive investment environment for such investors.
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