According to the Ministry of Finance, the United Arab Emirates has revised the tax treatment of limited partnerships and investment funds as part of its continuous efforts to improve the nation’s investment climate and bring it into line with international best practices.
Updated regulations for Qualifying Investment Funds (QIFs) and Qualifying Limited Partnerships under Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses are outlined in Cabinet Decision No. 34 of 2025, which supersedes the previous Cabinet Decision No. 81 of 2023.
The action is to encourage sustainable economic growth in the United Arab Emirates and draw in more international and local investment.
Corporate Tax rules to Boost Investments
The new ruling outlines the circumstances in which a non-resident legal investor in a
Real Estate Investment Trust (REIT) or Qualifying Investment Fund (QIF) is deemed to have a connection to the United Arab Emirates and is thus liable to pay taxes.
For the purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, this comes after Cabinet Decision No. 34 of 2025 on Qualifying Investment Funds and Qualifying Limited Partnerships was issued.
If the QIF distributes 80 percent or more of its income within nine months of the end of its fiscal year, a nexus will be created for a non-resident juridical investor in the QIF that violates the real estate threshold. If the QIF does not distribute at least 80 percent of its income within nine months of the end of its fiscal year, a nexus will be created on the date the ownership interest is acquired. For a non-resident juridical investor in a QIF that does not satisfy the diversity of ownership requirements during the tax period in which the failure takes place, a nexus will also be established.
The date of the dividend distribution, if the REIT distributes 80% or more of its income within nine months of the end of its fiscal year, or the date the ownership interest is acquired, if the REIT does not distribute at least 80% of its income within nine months of the end of its fiscal year, will be the nexus for a non-resident juridical investor in the REIT.
Non-resident juridical investors that make just QIF and/or REIT investments shall not be regarded as having a taxable presence in the UAE, with the exception of the aforementioned situations.
This ruling lessens the compliance requirements for international investors and demonstrates the UAE government’s dedication to creating an alluring investment climate for them.
