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UAE Cabinet Decision No. 34 of 2025: Tax Exemption Rules for QIFs, QLPs, and REITs in UAE
Discover the UAE Cabinet Decision No. 34 of 2025, which simplifies tax exemptions for Qualifying Investment Funds (QIFs), Qualifying Limited Partnerships (QLPs), and Real Estate Investment Trusts (REITs), effective from January 2025. This business-friendly framework ensures compliance and maximizes tax benefits for UAE investors and fund managers.
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Tax Exemptions for QIFs, QLPs, and REITs in the UAE
The UAE continues to solidify its position as a global investment hub, and the recently issued Cabinet Decision No. 34 of 2025 is a game-changer for investors in Qualifying Investment Funds (QIFs), Qualifying Limited Partnerships (QLPs), and Real Estate Investment Trusts (REITs). This directive, effective from January 1, 2025, outlines critical compliance and tax exemption rules that make the UAE an even more attractive destination for investment vehicles. Whether you’re an investor, fund manager, or business owner in the UAE, understanding these rules can unlock significant tax benefits and streamline your operations.
In this comprehensive guide, brought to you by Tulpar Global Taxation, we’ll break down everything you need to know about UAE Cabinet Decision No. 34 of 2025. From eligibility criteria to compliance requirements and tax-saving opportunities, this blog post is designed to help you navigate the new regulations with ease. Let’s dive into how these rules can benefit your investments and ensure compliance in the UAE’s dynamic financial landscape.
Why UAE Cabinet Decision No. 34 of 2025 Matters for Investors
The UAE’s vision to become a leading financial hub is backed by policies that promote transparency, ease of doing business, and investor-friendly tax regimes. Cabinet Decision No. 34 of 2025, issued on March 27, 2025, replaces the earlier Cabinet Decision No. 81 of 2023 and introduces refined rules for QIFs, QLPs, and REITs under the UAE Corporate Tax Law (Federal Decree-Law No. 47 of 2022). This decision is a pivotal step toward aligning the UAE’s tax framework with global standards while fostering a business-friendly environment.
What Makes This Decision a Game-Changer?
The UAE’s tax exemptions for QIFs, QLPs, and REITs aim to attract global investors by offering corporate tax exemptions under specific conditions. These exemptions reduce the tax burden, allowing funds to reinvest profits and grow. By clarifying eligibility criteria and compliance timelines, the decision ensures regulatory certainty, which is crucial for long-term investment planning. According to Tulpar Global Taxation, this directive reflects the UAE’s commitment to creating a transparent and competitive financial ecosystem.
How Does It Impact the UAE Market?
The UAE’s investment landscape is booming, with Dubai and Abu Dhabi emerging as top destinations for global capital. This decision directly supports the UAE’s goal of becoming a hub for asset management and real estate investments. By offering tax exemptions, it encourages both local and foreign investors to explore opportunities in the UAE, boosting sectors like real estate, private equity, and venture capital. For businesses operating in the UAE, understanding these rules is essential to maximize returns and stay compliant.
Understanding Qualifying Investment Funds (QIFs) and Tax Exemptions
Qualifying Investment Funds (QIFs) are investment vehicles designed to pool capital for collective investment while enjoying tax exemptions under the UAE Corporate Tax Law. Cabinet Decision No. 34 of 2025 outlines specific criteria that QIFs must meet to qualify for these benefits, ensuring they operate within a transparent and regulated framework.
Eligibility Criteria for QIFs
To qualify as a QIF and enjoy tax exemptions, a fund must meet the following conditions, as outlined in Article 10(1) of the Corporate Tax Law and further clarified by Cabinet Decision No. 34:
- Primary Investment Business: The fund must primarily engage in investment activities, with non-investment activities (ancillary or incidental) contributing no more than 5% of total annual revenue.
- Regulatory Oversight: The fund or its manager must be subject to oversight by a competent authority in the UAE (e.g., SCA, DFSA, or ADGM) or a recognized foreign jurisdiction.
- Limited Investor Control: Investors must not have control over the day-to-day management of the fund.
- Diversity of Ownership: The fund must not be dominated by a single investor. If the fund has fewer than 10 investors, no single investor (along with related parties) can hold 30% or more of ownership interests. For funds with 10 or more investors, the threshold is 50%.
- Data Sharing: The fund must provide investors with sufficient information to calculate their taxable income accurately.
 Tulpar Global Taxation emphasizes that these criteria are designed to balance flexibility with accountability, ensuring that only genuine investment funds benefit from tax exemptions.
Tax Benefits for QIF Investors
Investors in a QIF enjoy significant tax advantages:
- Exempt Income: Income distributions from a QIF are excluded from the investor’s taxable income, provided the fund meets all exemption criteria.
- Immovable Property Income: If a QIF holds UAE immovable property exceeding 10% of its total assets, juridical investors must include 80% of the prorated immovable property income in their taxable income, unless 80% or more of such income is distributed within 9 months of the financial year-end.
- Grace Period: New funds have a two-year grace period to meet diversity of ownership requirements, and temporary breaches (less than 90 days per year) due to uncontrollable events or fund liquidation are excused.
 By working with experts like Tulpar Global Taxation, investors can ensure their QIFs meet
these criteria and maximize tax savings while staying compliant.
Navigating Qualifying Limited Partnerships (QLPs) in the UAE
Qualifying Limited Partnerships (QLPs) are another investment vehicle eligible for tax exemptions under Cabinet Decision No. 34 of 2025. These partnerships are treated as tax-transparent entities, meaning income is taxed at the investor level rather than the partnership level, provided specific conditions are met.
What Defines a QLP?
A QLP is an unincorporated partnership that meets the following requirements:
- Investment Focus: The QLP must primarily engage in investment activities, similar to QIFs, with incidental activities not exceeding 5% of total revenue.
- No UAE Immovable Property Income: The QLP must not derive income from UAE immovable property, as this would disqualify it from tax-transparent status.
- No Tax Avoidance Purpose: The partnership must not be established with the primary intent of avoiding corporate tax.
- Application for Exemption: The QLP must apply for exemption within the first tax period in which Cabinet Decision No. 34 applies (starting January 1, 2025). Failure to apply results in ineligibility for exemption for the current and subsequent four tax periods.
 Tulpar Global Taxation advises QLPs to proactively assess their eligibility and submit
exemption applications promptly to avoid losing tax benefits.
Tax Implications for QLP Investors
For investors in a QLP:
- Tax-Transparent Income: Income from a QLP is passed through to investors and taxed at their level, not the partnership’s. This eliminates double taxation and simplifies compliance.
- Adjusted Income for Managers: Resident investment managers must adjust their taxable income to include the net profits attributed to the QLP, ensuring transparency in profit allocation.
- Compliance Deadlines: QLPs must adhere to strict compliance timelines, including providing investors with necessary documentation for tax calculations.
By leveraging Tulpar Global Taxation’s expertise, QLP investors can navigate these rules efficiently, ensuring compliance while optimizing tax outcomes.
Real Estate Investment Trusts (REITs): Unlocking Tax Benefits
Real Estate Investment Trusts (REITs) are a cornerstone of the UAE’s real estate investment landscape, offering investors exposure to property markets without direct ownership. Cabinet Decision No. 34 of 2025 introduces specific criteria for REITs to qualify for tax exemptions, aligning with the UAE’s goal of fostering real estate growth.
REIT Exemption Criteria
To qualify for corporate tax exemption, a REIT must meet the following conditions:
- Minimum Asset Value: The REIT must hold UAE immovable property (excluding land) valued at AED 100 million or more.
- Public Listing or Ownership: At least 20% of the REIT’s share capital must be publicly listed on a recognized stock exchange, or the REIT must be wholly owned by two or more institutional investors. Temporary relief between May 1 and May 31, 2025, reduces the public float requirement to 10%.
- Rental Income Focus: The REIT must maintain an average of 70% or more of its assets in rental income-generating immovable property annually. Assets held solely for capital appreciation are excluded.
- Data Transparency: Like QIFs, REITs must provide investors with sufficient information to calculate their taxable income accurately.
Tulpar Global Taxation highlights that these criteria ensure REITs contribute to the UAE’s real estate market while maintaining transparency and investor trust.
Tax Advantages for REIT Investors
Investors in exempt REITs benefit from:
- Exempt Distributions: Income distributions from a REIT are excluded from taxable income, provided the REIT meets all exemption criteria.
- Immovable Property Income: Similar to QIFs, juridical investors must include 80% of prorated immovable property income in their taxable income unless 80% or more is distributed within 9 months of the financial year-end.
- Non-Resident Investors: Non-resident juridical investors may face taxable nexus if ownership thresholds or immovable property exposures are breached, requiring registration for corporate tax.
By partnering with Tulpar Global Taxation, REIT investors can ensure compliance with these
rules and optimize their tax strategies in the UAE’s thriving real estate market.
Compliance Requirements Under Cabinet Decision No. 34 of 2025
Compliance is the cornerstone of leveraging tax exemptions under Cabinet Decision No. 34 of 2025. The UAE’s tax authorities, including the Federal Tax Authority (FTA), have outlined strict guidelines to ensure funds and investors adhere to the new rules.
Key Compliance Obligations
- Tax Registration: All QIFs, QLPs, and REITs must register for corporate tax, even if they qualify for exemptions. Non-resident juridical investors with a taxable nexus must also register.
- Timely Reporting: Funds must submit tax returns and provide investors with necessary documentation within the specified timelines. Failure to do so may result in administrative penalties.
- Record Keeping: Funds must maintain accurate records of their activities, ownership structure, and income distributions to demonstrate compliance with exemption criteria.
- Application for Exemption: QLPs, in particular, must apply for exemption within the first tax period starting January 1, 2025. Missing this deadline can lead to a four-year ineligibility for tax exemptions.
Penalties for Non-Compliance
Failure to meet compliance requirements can result in:
- Loss of Exemption Status: Funds that fail to meet eligibility criteria or comply with reporting obligations lose their exempt status, potentially for multiple tax periods.
- Administrative Penalties: Penalties may be imposed for late tax returns, failure to maintain records, or non-payment of taxes due.
- Taxable Income Adjustments: Investors may face adjustments to their taxable income if funds fail to distribute immovable property income within the required timeframe.
Tulpar Global Taxation offers end-to-end compliance solutions, helping funds and investors
navigate these requirements with precision and avoid costly penalties.
How Tulpar Global Taxation Can Help You Succeed
Navigating the complexities of Cabinet Decision No. 34 of 2025 requires expertise and a deep understanding of the UAE’s tax landscape. Tulpar Global Taxation, a leading tax advisory firm in the UAE, specializes in helping investors, fund managers, and businesses optimize their tax strategies while ensuring full compliance.
Why Choose Tulpar Global Taxation?
- Expert Guidance: Our team of tax professionals stays updated on the latest regulations, including Cabinet Decision No. 34 of 2025, to provide tailored advice for QIFs, QLPs, and REITs.
- Comprehensive Compliance: We handle everything from tax registration to documentation, ensuring your fund meets all eligibility criteria and deadlines.
- Strategic Tax Planning: We help you maximize tax exemptions and minimize liabilities, allowing you to reinvest profits and grow your portfolio.
- UAE Market Expertise: With deep knowledge of the UAE’s investment landscape, we craft strategies that align with your business goals in Dubai, Abu Dhabi, and beyond.
Whether you’re setting up a new fund or restructuring an existing one, Tulpar Global Taxation is your trusted partner for success in the UAE’s dynamic financial market.
Strategic Benefits of Investing in the UAE Under the New Rules
The UAE’s investor-friendly policies, combined with Cabinet Decision No. 34 of 2025, create unparalleled opportunities for growth. Here’s why now is the perfect time to invest in QIFs, QLPs, and REITs in the UAE:
A Thriving Investment Hub
The UAE’s strategic location, world-class infrastructure, and stable economy make it a magnet for global investors. Cities like Dubai and Abu Dhabi offer access to diverse markets, from real estate to technology, supported by a robust regulatory framework.
Tax Advantages
The tax exemptions under Cabinet Decision No. 34 reduce financial burdens, allowing funds to reinvest profits and achieve higher returns. This is particularly appealing for real estate investors, as REITs offer exposure to the UAE’s booming property market without the complexities of direct ownership.
Regulatory Clarity
By tightening definitions and compliance requirements, the decision promotes transparency and investor confidence. This aligns with global standards like BEPS 2.0 and Pillar 2, ensuring the UAE remains a competitive destination for international capital.
Support from Tulpar Global Taxation
With Tulpar Global Taxation by your side, you can confidently navigate the UAE’s tax landscape, leveraging these benefits to build a successful investment portfolio.
How to Get Started with QIFs, QLPs, and REITs in the UAE
Ready to take advantage of Cabinet Decision No. 34 of 2025? Here’s a step-by-step guide to get started:
- Assess Eligibility: Work with Tulpar Global Taxation to evaluate whether your fund or partnership meets the criteria for QIF, QLP, or REIT status.
- Register for Corporate Tax: Ensure your fund is registered with the FTA, even if it qualifies for exemptions.
- Apply for Exemption: For QLPs, submit your exemption application within the first tax period starting January 1, 2025.
- Maintain Compliance: Keep accurate records, provide investor documentation, and adhere to distribution timelines to retain exempt status.
- Partner with Experts: Collaborate with Tulpar Global Taxation for tailored advice and compliance support, ensuring your investments thrive in the UAE.
Conclusion: Seize the Opportunity with Cabinet Decision No. 34 of 2025
UAE Cabinet Decision No. 34 of 2025 is a landmark regulation that empowers investors to unlock tax exemptions and drive growth in the UAE’s vibrant financial market. By understanding the eligibility criteria, compliance requirements, and tax benefits for QIFs, QLPs, and REITs, you can position your investments for success. With Tulpar Global Taxation as your partner, you’ll have well-crafted strategies and expert support to navigate this new landscape with confidence.
Don’t miss out on the opportunities this decision offers. Contact Tulpar Global Taxation today to optimize your tax strategy and make the most of the UAE’s investor-friendly environment. Let’s build your financial future together!
What is UAE Cabinet Decision No. 34 of 2025, and how does it impact QIFs, QLPs, and REITs?
UAE Cabinet Decision No. 34 of 2025, issued on March 27, 2025, updates the tax framework for Qualifying Investment Funds (QIFs), Qualifying Limited Partnerships (QLPs), and Real Estate Investment Trusts (REITs) under Federal Decree-Law No. 47 of 2022. It replaces Cabinet Decision No. 81 of 2023 and introduces clearer eligibility criteria for tax exemptions, effective for tax periods starting on or after January 1, 2025.
This decision promotes a transparent, investor-friendly tax environment in the UAE. Investors in QIFs, QLPs, and REITs can benefit from 0% corporate tax if they meet specific conditions. Tulpar Global Taxation offers expert guidance to help navigate these changes and optimize tax strategies.
Who qualifies for tax exemptions under Cabinet Decision No. 34 of 2025 in the UAE?
QIFs and QLPs must primarily conduct investment business, with non-core activities limited to 5% of total revenue. Investors must not control daily operations, and the fund must provide detailed data for taxable income calculations. For REITs, 70% of assets must generate rental income, and specific ownership thresholds apply.
Tulpar Global Taxation ensures compliance with these rules so funds can retain exemption status and avoid tax liabilities.
How do QIFs benefit from tax exemptions under UAE’s new tax rules?
QIFs that meet the conditions (e.g., oversight, investor diversity, non-investment activity limits) are exempt from corporate tax. Income distributions to investors are tax-free. Juridical investors may include prorated profits in taxable income in some cases.
Tulpar Global Taxation helps QIFs maintain eligibility and manage data-sharing requirements for smoother exemption processes.
What are the key requirements for QLPs to be tax-exempt in the UAE?
QLPs must focus on investment activities, avoid UAE immovable property income, and cannot be structured for tax avoidance. Failure to meet conditions results in exemption loss for the current and next four tax periods.
Tulpar Global Taxation provides end-to-end compliance and helps monitor income sources for QLPs to maintain tax-exempt status.
How do REITs qualify for tax exemptions under Cabinet Decision No. 34 of 2025?
REITs qualify if at least 70% of assets generate rental income, and they meet ownership rules (20% public listing or institutional ownership). Temporary relief allows 10% public float for REITs listed May 1–31, 2025.
Tulpar Global Taxation ensures your REIT meets the latest criteria and enjoys maximum tax benefits.
What happens if a QIF or QLP breaches ownership thresholds in the UAE?
Ownership breaches (e.g., a single investor holding 30%+ with fewer than 10 investors) can lead to exemption loss unless corrected within 90 days or within the first two years. Exceptions apply for uncontrollable events or liquidation.
Tulpar Global Taxation helps monitor and resolve ownership issues to preserve exemptions.
How does Cabinet Decision No. 34 of 2025 affect non-resident investors in the UAE?
Non-resident juridical investors may establish taxable nexus if ownership thresholds or UAE immovable property exposure are breached. Cabinet Decision No. 35 of 2025 defines these triggers.
Tulpar Global Taxation guides non-resident investors through compliance to avoid unintended tax obligations.
What are the compliance requirements for tax-exempt funds under UAE’s new rules?
Funds must provide tax data to investors, appoint tax agents if needed, and limit non-core activities to 5% of revenue. REITs must meet asset and income thresholds or risk losing exemptions.
Tulpar Global Taxation simplifies compliance with professional support, ensuring funds stay on track.
How does profit distribution work for tax-exempt QIFs and REITs in the UAE?
Distributions are tax-free for investors. However, juridical investors with large holdings may need to include prorated net profits in taxable income. If 80% of immovable property income is distributed within 9 months, tax adjustments can be avoided.
Tulpar Global Taxation ensures timely distributions and proper reporting to reduce investor tax burdens.
Why choose Tulpar Global Taxation for navigating UAE Cabinet Decision No. 34 of 2025?
Tulpar Global Taxation is your trusted partner for UAE tax exemption strategies. We provide tailored advice for QIFs, QLPs, and REITs, ensuring compliance and maximizing returns in a dynamic regulatory environment.
Contact Tulpar Global Taxation today to secure your fund’s tax-exempt status and optimize your investment strategy in the UAE.
