The UAE has introduced Cabinet Decision No. 35 of 2025, clarifying tax obligations for non-resident juridical investors in Qualifying Investment Funds (QIFs) and Real Estate Investment Trusts (REITs). This decision replaces Cabinet Decision No. 56 of 2023 and aligns with Federal Decree-Law No. 47 of 2022 on corporate taxation.
Under the new rules, a non-resident investor in a QIF that exceeds the real estate asset threshold will establish a tax nexus in the UAE on the dividend distribution date if the fund distributes 80% or more of its income within nine months of the financial year-end. If the QIF fails to meet this distribution criterion, the nexus is established on the date the ownership interest is acquired. Additionally, if a QIF does not meet the diversity of ownership conditions during a tax period, a nexus is created for that period.
Similar provisions apply to REITs. A nexus arises on the dividend distribution date if 80% or more of income is distributed within nine months of the financial year-end. If this threshold is not met, the nexus is established on the date the ownership interest is acquired.
In other scenarios, non-resident juridical investors exclusively investing in QIFs or REITs will not be considered to have a taxable presence in the UAE. This decision aims to reduce compliance burdens for foreign investors.
