The UAE Ministry of Finance has issued Cabinet Decision No. 55 of 2025, extending corporate tax exemptions under Federal Decree-Law No. 47 of 2022 to include certain foreign entities.
The new decision allows foreign entities wholly owned by exempt persons—such as UAE government entities, government-controlled entities, qualifying investment funds, and public pension or social security funds—to be eligible for corporate tax exemption, provided they meet specific conditions.
Previously, the exemption applied only to entities incorporated within the UAE. Foreign entities, including those operating through branches in the UAE, were not eligible even if fully owned by exempt persons.
The Ministry stated that the change is intended to align the tax treatment of foreign and local entities under common ownership and to enhance the UAE’s position as a jurisdiction for holding companies. The policy update is also intended to bring the UAE’s tax framework in line with international standards on neutrality and competitiveness.
The decision forms part of the broader corporate tax regime introduced under Decree-Law No. 47 of 2022, which imposes a standard 9% corporate tax on business profits above AED 375,000, with specific exemptions subject to Cabinet decisions.
