Investment Manager Exemption UAE CT: Key Conditions

Businesses in the UAE must follow new tax regulations. Every business should know about the corporate tax regime so they can file their tax returns on time. Investment managers must also understand how CT impacts investment funds and the managers. There are exemptions, rules, and reliefs for them. Getting help from tax experts helps managers comply with these new laws. This article explains the conditions to meet for investment manager exemption under UAE corporate tax.

Why Investment Manager Exemption Is Needed

This exemption stops foreign investors or foreign investment entities from facing UAE corporate tax. The rule helps investment managers do business with foreign entities without creating a permanent establishment in the UAE. If this exemption is not there, managers might trigger a permanent establishment because of their activities for non-resident clients. So, this investment manager exemption is helpful for foreign investors dealing with UAE-based investment managers or brokers.

Main Conditions for Investment Manager Exemption

The FTA lists certain conditions for investment managers who want this exemption. The conditions include:

The manager must work in investment management services or brokerage services.
Services may include acting as a general partner, investment manager, adviser, or managing investment mandates.
The manager can offer investment opportunities to investors and can represent the fund during contract talks.
The manager must follow the strategy and do research for the investments.
The manager must have a license in the UAE for these services.

Here are the extra conditions set by the FTA:

The manager must be approved by UAE authorities and follow regulatory oversight conditions.
The manager’s transactions must be in the ordinary course of business. If a transaction is outside normal business, the exemption does not apply.
The manager must act independently in all transactions.
The manager must give services at arm’s length to non-resident persons and must get fair payment for services.
The manager must not represent the non-resident client in other transactions or income that is taxable under corporate tax.
The manager must follow any more conditions set by the Cabinet.

All these conditions must be met by the investment manager for getting the exemption.

Consequences of Not Meeting the Conditions

If the investment manager does not meet all exemption conditions, the manager’s activities will be checked. The FTA will see if the manager created a permanent establishment for a non-resident under Article 14 of CT law. If there is a permanent establishment, then the non-resident may have to pay UAE corporate tax.

How Mubarak Al Ketbi Chartered Accountants Can Help

When you need a steady hand to guide you through the maze, Mubarak Al Ketbi Chartered Accountants is ready to help your business meet every compliance requirement in the UAE.

We give expert tax advice about investment manager exemption.
We help with all paperwork and filings.
We support you in understanding UAE CT law.
We help you avoid mistakes and keep your records updated.

For more information:

Visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud, Dubai – UAE
Or contact/WhatsApp: +971 50 276 2132

FAQs on Investment Manager Exemption UAE CT

Do individuals pay corporate tax on salary?

No. Salary stays outside CT. A person pays CT only on business income when the person runs a licensed business and crosses the turnover threshold.

Can a free zone company sell to the mainland and keep 0%?

It depends on the activity, the role in the supply chain, and the de-minimis rules. Non-qualifying mainland income generally faces 9%.

Do small firms need audited accounts?

Some firms may use IFRS for SMEs, but certain categories, including many free zone persons seeking QFZP status or entities above revenue thresholds, need audited statements.

What records must a taxpayer keep?

Keep ledgers, invoices, contracts, bank statements, TP files, and working papers for the statutory period. Keep scans and hard copies when needed.

When is the CT return due?

The return and payment are due within nine months after the end of the tax period. Add the date to your calendar with early reminders.