New UAE tax rules for foreign investors and non-residents

Major changes to corporate tax rules have been announced by the UAE in an effort to attract more domestic and foreign investments. The changes were announced by the Ministry of Finance and outlines scenarios that will see non-residents subjected to taxation in the country.

“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,” according to an update shared by the official Emirates News Agency.

Details shared by the news agency suggest that a nexus will arise for QIF investors that breach the real estate threshold either on the date of the dividend distribution or the date the ownership interest is acquired. The first applies if the QIF distributes 80% or more of its income within nine months from its financial year-end. The date of ownership interest acquisition will be considered if the QIF fails to distribute at least 80% of its income within the same stipulated period. 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.

Meanwhile, a nexus for REIT investors will arrive “on the date of the dividend distribution” if the trust distributes 80% or more of its income within nine months of its financial year end. It will apply from the date the ownership interest is acquired in case the REIT fails to distribute at least 80% of its income within this timeframe.

The Ministry of Finance also specified that non-resident juridical investors investing exclusively in a QIF or REIT would not be considered to have a taxable presence in the country — except in the cases outlined. The move is intended to “reduce foreign investors’ compliance burdens”.

Dhruv Tanna, associate vice president at DIFC-based investment and wealth management firm PhillipCapital, said the decision provided “much-needed clarity” to non-resident investors in QIFs and Reits regarding their potential tax exposure in the UAE under the corporate tax regime.

“By defining the circumstances in which a nexus is created, this decision distinguishes between passive, diversified investments and structures that either concentrate on UAE real estate or lack sufficient distribution or ownership diversity,” he said.

“Specifically, triggering events – such as failure to distribute 80% of income within nine months or breaching diversity thresholds – serve as practical indicators of when a non-resident investor’s involvement becomes sufficiently substantial to warrant tax treatment akin to a domestic presence.”

‘Make It in the Emirates’ 2025 to feature diverse range of sectors

‘Make It in the Emirates 2025’ has announced the opening of visitor and media registration for its fourth edition, the largest industrial gathering in the UAE, set to take place from 19 to 22 May at ADNEC Centre Abu Dhabi.

Make it in the Emirates 2025 is led by the Ministry of Industry and Advanced Technology, in collaboration with the Abu Dhabi Investment Office, the UAE Ministry of Culture, and ADNOC, and is organised by ADNEC Group. The event reflects a strong commitment to fostering industrial growth, increasing investment opportunities, and driving economic diversification in the UAE.

ADNEC Group said in a statement: “The Make It in the Emirates Forum and Exhibition is distinguished by in-depth discussions and studies, providing companies with the resources, insights, and networks needed to thrive in an evolving global landscape. It also supports the UAE’s vision for sustainable industrial development, aligning with Operation 300 Billion Strategy.

“This edition will mark a significant leap in both size and procurement commitments that drive economic diversification and long-term value creation. As the region’s leading industrial event, Make It in The Emirates 2025 presents unprecedented investment and business opportunities, offering direct access to pre-approved industrial projects in high-growth sectors, supported by the government.”

It added: “The exhibition will feature a diverse range of sectors, including manufacturing, renewable energy, advanced technology, and logistics, along with showcases of heritage crafts and innovative services.

“The organisation of the Make It in the Emirates embodies the leadership’s vision to position the UAE as a global platform for industry. It also underscores the attractiveness of the country’s regulatory environment and the advanced infrastructure it provides, in line with its strategic efforts to become a global centre for advanced industry and innovation.”

• Find out more about the event and to register go to https://www.miite.ae/