The Ministry of Finance in the UAE has announced Cabinet Decision No 35 of 2025, which establishes guidelines for determining the nexus of non-resident individuals for corporate tax purposes. This new regulation clarifies when non-resident investors in Qualifying Investment Funds (QIFs) and Real Estate Investment Trusts (REITs) are subject to corporate tax under Federal Decree-Law No 47 of 2022.

This decision replaces the earlier Cabinet Decision No 56 of 2023 and focuses on identifying when a non-resident juridical investor in a QIF or REIT will be considered to have a taxable presence in the UAE. It follows the issuance of Cabinet Decision No 34 of 2025, which addressed Qualifying Investment Funds and Qualifying Limited Partnerships.

According to the new guidelines, a nexus for a non-resident juridical investor in a QIF will be established under specific conditions. If the QIF distributes 80 percent or more of its income within nine months of its financial year-end, the nexus will be recognized on the date of the dividend distribution. If the QIF does not meet this distribution requirement, the nexus arises on the date the ownership interest is acquired.

Similarly, for REITs, a nexus is created either on the date of dividend distribution if 80 percent or more of income is distributed within the same timeframe or on the date of ownership acquisition if the distribution requirement is not met. The decision aims to clarify the tax obligations for non-resident juridical investors, thereby reducing compliance burdens for foreign investors.

Beyond these circumstances, non-resident juridical investors who exclusively invest in QIFs and/or REITs will not be regarded as having a taxable presence in the UAE. The issuance of this decision reflects the UAE government’s commitment to fostering an attractive investment climate while ensuring adherence to tax regulations.