In a move to further strengthen the UAE's investment climate, the Ministry of Finance has issued Cabinet Decision No. 34 of 2025, replacing Cabinet Decision No. 81 of 2023.
The decision outlines updated tax treatments for Qualifying Investment Funds (QIFs) and Qualifying Limited Partnerships under the Federal Decree-Law No. 47 of 2022 on Corporate Tax.
A key highlight is the continuation of favourable tax exemptions for investors in QIFs—provided the fund adheres to a 10% real estate asset threshold and diversity of ownership requirements. Even if these are breached, the decision introduces a 90-day grace period annually, offering funds the opportunity to regain compliance without losing tax benefits.
Importantly, any breach of the diversity rule will now only affect the responsible investors, not the fund as a whole. If the real estate asset threshold is exceeded, only 80% of the related income will be taxed. This 80% rule also applies to investors in Real Estate Investment Trusts (REITs), aligning taxation with regulatory distribution standards.
Foreign juridical investors in compliant REITs and QIFs will only need to register for Corporate Tax upon dividend distribution—streamlining administrative obligations and easing compliance.
The decision also extends tax-transparent status to certain limited partnerships, aligning with international best practices and enhancing the UAE’s appeal to global investors.
This strategic update reinforces the UAE’s position as a forward-thinking, investor-friendly jurisdiction, combining regulatory clarity with tax efficiency to drive economic growth.
News Source: Emirates News Agency
