The UAE introduced federal corporate tax in 2023, but free zone companies can still qualify for a 0% rate on certain income streams provided they meet the conditions for being a Qualifying Free Zone Person.
To retain this status, a company must maintain adequate substance in the UAE, earn qualifying income as defined by the Ministry of Finance, and comply with transfer pricing rules. Non-qualifying income above the de minimis threshold is taxed at the standard 9% rate.
Getting this classification right from day one avoids costly restructuring later — it is one of the first things we review with every free zone client.