Free zone companies in the UAE can access a 0% Corporate Tax rate on qualifying income — but only if they meet strict conditions as a Qualifying Free Zone Person (QFZP). Being in a free zone does not make you automatically exempt: you must still register with the FTA and file an annual Corporate Tax return.
What is a Qualifying Free Zone Person?
A QFZP is a free zone entity that maintains adequate substance in the UAE, earns qualifying income, complies with transfer-pricing rules, and does not elect to be taxed at the standard rate. Meet the conditions and qualifying income is taxed at 0%; fail them and your income can fall under the standard 9% regime — see the Corporate Tax hub.
The de minimis rule
A QFZP may earn a small amount of non-qualifying income without losing its status, provided that income stays under the de minimis threshold (the lower of a small percentage of total revenue or a fixed cap). Exceeding it can disqualify you for the period, so accurate records matter.
Free zone vs mainland
Free zone status can be valuable, but it adds substance and documentation requirements that mainland companies do not face. Whether it benefits you depends on your activities and customers. Estimate the impact with the free Corporate Tax calculator.
We assess your eligibility, help you meet the QFZP conditions, and manage your registration and filing through our network of FTA-registered partner tax agencies. Track your deadlines in the Deadlines & Penalties hub and set free reminders on the reminders page.
Free zone rules are detailed and fact-specific — confirm your position with an FTA-registered tax agency before acting.