The UAE Ministry of Finance has announced new rules affecting non-resident investors in the country. Cabinet Decision No. 35 of 2025 clarifies when foreign investors in Qualifying Investment Funds (QIFs) and Real Estate Investment Trusts (REITs) will be considered taxable in the UAE.
When Does Taxation Apply?
Under the updated decision, non-resident investors in QIFs or REITs will be taxed if certain conditions are met. For QIF investors, this includes cases where:
The QIF distributes 80% or more of its income within nine months of its financial year-end.
The investor acquires ownership before the QIF distributes its income or fails to meet income distribution requirements.
The QIF does not meet the required ownership diversity.
For REIT investors, the same conditions apply: taxation will occur if the REIT either distributes 80% or more of its income within nine months or fails to meet the required distribution.
Impact on Investors
This decision simplifies the tax rules for foreign investors by reducing their compliance responsibilities. It ensures that only specific conditions trigger a taxable presence in the UAE, making it easier for investors to navigate the system. The update aims to further solidify the UAE’s position as an attractive investment destination.
tanvir@dubainewsweek.com
