The UAE Ministry of Finance has issued Cabinet Decision No. 35 of 2025, defining when a non-resident juridical investor is considered to have a taxable presence—or nexus—in the UAE.
This decision replaces Cabinet Decision No. 56 of 2023 and supports the implementation of Federal Decree-Law No. 47 of 2022 on Corporate Tax.
The decision outlines specific conditions under which non-resident investors in Qualifying Investment Funds (QIFs) or Real Estate Investment Trusts (REITs) are deemed to have a nexus and therefore become subject to UAE corporate tax.
For QIFs, a nexus arises if the fund breaches the real estate threshold and either:
- Distributes 80% or more of its income within nine months of its financial year-end, in which case the nexus is established on the dividend distribution date, or
- Fails to meet the 80% distribution requirement, in which case the nexus is created on the date the ownership interest is acquired.
Additionally, if a QIF fails to meet diversity of ownership conditions during any tax period, a nexus is also established.
Similarly, for REITs, a nexus is triggered based on whether the 80% income distribution threshold is met—either at the dividend distribution date or the ownership acquisition date.
However, non-resident juridical investors exclusively investing in compliant QIFs or REITs, and not meeting the specified conditions, will not be considered to have a taxable presence in the UAE.
The move simplifies compliance for foreign investors and reinforces the UAE’s commitment to maintaining an investor-friendly tax environment.
News Source: Emirates News Agency
