Tax Nexus Rules Updated for QIF/REIT

New Cabinet Decision No. 35 of 2025 Clarifies Tax Nexus for Non-Resident Investors in QIFs and REITs

The UAE continues to refine its corporate tax framework to foster a business-friendly environment. In line with this vision, the Ministry of Finance has issued Cabinet Decision No. 35 of 2025, replacing Cabinet Decision No. 56 of 2023, to clarify when non-resident juridical investors in Qualifying Investment Funds (QIFs) and Real Estate Investment Trusts (REITs) are considered to have a taxable nexus in the UAE.

What You Need to Know

The latest decision outlines specific conditions under which a non-resident investor will be considered to have a nexus in the UAE:

For QIFs

• If 80% or more of the income is distributed within nine months of the financial year-end, the nexus arises on the date of dividend distribution.

• If the QIF fails to meet the 80% distribution rule, the nexus applies on the date of acquiring ownership interest.

• A nexus is also established if the diversity of ownership conditions are not met during the tax period.

For REITs

• The same 80% income distribution rule applies.
• Nexus is triggered on the dividend distribution date (if compliant) or ownership acquisition (if non-compliant).

Good news for investors

If a non-resident juridical investor invests exclusively in compliant QIFs or REITs, and the above thresholds are met, they will not be considered to have a taxable presence in the UAE.

Why It Matters

This decision is part of a broader effort to reduce the compliance burden on foreign investors while ensuring tax clarity. It aligns with the UAE’s commitment to fostering a robust, transparent, and internationally competitive tax environment.

How AMCA Can Help

At AMCA, we stay ahead of regulatory changes so you don't have to. Our tax advisory team can:

• Assess your exposure to the new nexus rules
• Help you structure your QIF or REIT investments tax-efficiently
• Guide you through corporate tax compliance in the UAE.

Stay Compliant, Stay Confident

Reach out to AMCA today for a personalized consultation on how this update may affect your investments.