The UAE Ministry of Finance has issued an update regarding Qualifying Investment Funds (QIFS) under the UAE Corporate Tax Framework (Cabinet Decision no. 34 or 2025).
Here’s a concise overview of what’s new and what it means for fund managers and investors:
Tax Exemption for Investors
Investors in a QIF will be exempt from UAE Corporate Tax on income earned through the fund, provided the fund meets certain regulatory conditions.
Diversity of Ownership Requirement
QIFS are required to maintain a diversified ownership structure. In the event of a breach, a grace period of up to 90 days within the tax year is allowed to address the issue. Breaches occurring during liquidation will not impact the fund compliance.
Real Estate Investment Threshold
if a QIF’s investment in real estate assets exceed 10% of its total assets, 80% of the income from such real estate investments will be subject to tax.
Implications of Non-Compliance
Breaches of the ownership diversity requirement will impact only the non-compliant investors. The fund may still retain its QIF status, provided all other exemption criteria are met.
These latest updates reflect the UAE’s ongoing efforts to fine-tune its corporate tax regime in a way that is clear, fair, and practical for investment entities.
For fund managers, this is a timely reminder to regularly review fund structures, investor composition, and real estate exposure — particularly as compliance directly impacts tax status.
For additional information, please refer to the official announcement
