Ministerial Decision No. 229 of 2025 — which replaced Ministerial Decision No. 265 of 2023 with retroactive effect from 1 June 2023 — sets out an exhaustive list of the activities that give access to the QFZP regime. This page reviews each category, along with its limits and practical gray areas.
The QFZP regime is conditional upon the exercise of qualifying activities enumerated on an exhaustive basis by Ministerial Decision No. 229 of 2025 (which repealed and replaced MD No. 265 of 2023 with retroactive effect from 1 June 2023), issued under Cabinet Decision No. 100 of 2023. Any activity outside this list is non-qualifying: its income is taxed at 9% from the first dirham, and the entity loses QFZP status if the de minimis rule is breached.
Production or transformation of goods, provided that the core operations are carried out within the free zone. Partial subcontracting is permitted as long as the primary value-add remains within the zone.
Transformation, packaging, labeling, and assembly of products. Distinguished from manufacturing by the absence of fabrication from scratch.
Trading of raw materials exhaustively listed (metals, minerals, energy, agricultural products and — since MD No. 229 of 2025 — industrial chemicals, associated by-products and environmental commodities such as carbon credits), quoted on a recognised exchange or priced by a recognised price reporting agency (Ministerial Decision No. 230 of 2025). Includes physical trading and certain related hedging derivatives.
Holding equity interests for investment purposes. Includes dividend income and capital gains on disposal, subject to minimum holding period and percentage conditions.
International maritime activities: shipowning, technical management, crew management, and international transportation.
Reinsurance activities carried out by entities licensed by the competent authorities (the Central Bank of the UAE or the free zone financial regulators — DFSA in the DIFC, FSRA in ADGM).
Management of UCITS and regulated alternative funds. Limited to services rendered to funds located or marketed outside the UAE, for the portion not connected with UAE residents.
Wealth and investment management for non-UAE clients. A particularly developed activity at ADGM and DIFC.
Headquarter services (strategy, coordination, shared services) provided to group companies. Includes management services, centralized R&D, and global marketing.
Cash pooling, intra-group lending, and management of foreign exchange or interest rate risk for group companies. MD No. 229 of 2025 extends this category to treasury and financing activities conducted for the entity's own account.
Financing and leasing of aircraft, including engines and rotable components — a flagship sector of the UAE's aviation leasing platforms.
Distribution of goods or materials in or from a Designated Zone to customers that resell, process or alter them (clarified and relaxed by MD No. 229 of 2025). This underpins the "distribution hub" model of the logistics free zones.
International logistics services: transportation, warehousing, distribution, and regional hubs. A flagship activity of the airport and port free zones (DAFZA, JAFZA).
Certain activities are explicitly excluded from the QFZP regime even when conducted from a free zone: banking (other than entities licensed as offshore banks), insurance excluding reinsurance (other than licensed entities), financial services to UAE residents, and real estate operations (except for certain B2B transactions within a free zone).
Ancillary activities necessary to the conduct of a qualifying activity (internal administration, accounting, legal, HR) are treated as part of the principal activity and retain qualifying status. This tolerance is essential in practice: a QFZP trading desk does not lose its status because it has an in-house HR or accounting team.
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