In recent years, the UAE has continued to strengthen its position as a global hub for business, trade, and innovation. With the introduction of the new corporate tax law, one term that has become important for investors and businesses is the Qualifying Free Zone Person (QFZP). Understanding what this means, who qualifies, and what benefits it offers is essential for anyone operating within UAE free zones.
To enjoy the benefits of the QFZP status, your business must meet specific criteria. The key conditions include:
If these requirements are met, your company can retain the QFZP status and enjoy tax exemptions on eligible income.
Qualifying income generally includes revenue generated from transactions within the same free zone, or with other free zones, as well as income from exporting goods or services outside the UAE. It also covers certain regulated activities such as manufacturing, distribution, logistics, and certain service-based operations.
However, income from dealing directly with mainland UAE entities may not qualify unless the transaction is specifically allowed under the tax regulations. To ensure compliance, it is important to consult professionals who understand the detailed rules governing QFZP eligibility.
Even though QFZP status offers major tax relief, it comes with strict compliance requirements. Businesses must file annual tax returns, maintain proper accounting records, and demonstrate economic substance within the UAE.
Failure to meet these conditions could result in the loss of QFZP status and lead to taxation at the standard 9% rate. Therefore, companies must review their operations carefully and ensure they follow all rules related to corporate tax and economic substance regulations.
Navigating UAE corporate tax laws can be challenging, especially with the introduction of the QFZP regime. This is where Bizvise plays a vital role. As a leading business setup and corporate consultancy in the UAE, Bizvise assists companies in understanding their eligibility for the QFZP status and helps them maintain compliance with all requirements.
Bizvise provides expert services including:
The introduction of the QFZP concept represents a balance between maintaining the UAE’s appeal as a tax-friendly jurisdiction and aligning with global tax transparency standards. Free zone entities that meet the qualifying criteria can continue to benefit from the UAE’s favorable business environment while contributing to a sustainable economic model.
As the UAE continues to evolve its tax system, compliance, transparency, and strategic planning will become even more important for businesses. Companies that adapt early will enjoy a competitive advantage and a smooth transition into the new regulatory landscape.
Final Thoughts
The QFZP framework has changed how free zone companies manage their tax and compliance strategies. It ensures that only those businesses that add real economic value to the UAE can enjoy the 0% corporate tax benefits.
For entrepreneurs, investors, and existing companies, understanding QFZP rules is not just about tax savings — it’s about ensuring long-term growth and compliance. Whether you are starting a new business or managing an existing one in a UAE free zone, consulting with experts like Bizvise can help you stay compliant, save taxes, and position your company for future success.