Ministry of Finance Expands Corporate Tax Exemptions to Foreign-Owned Entities
Under Cabinet Decision No. (55) of 2025, foreign entities that are wholly owned by specific exempt persons — including government entities, government-controlled entities, qualifying investment funds, and public pension or social security funds — can now qualify for corporate tax exemption, provided they meet the prescribed conditions.
Previously, exemptions under Federal Decree-Law No. (47) of 2022 were limited to entities incorporated within the UAE. Foreign entities, even those fully owned by exempt bodies or operating through UAE branches, were excluded from the tax break.
The Ministry stated that the updated policy ensures consistent tax treatment between domestic and foreign entities under common ownership by exempt persons. This change aims to enhance the UAE's appeal as a base for holding companies and supports its broader goal of maintaining a fair, transparent, and competitive tax regime.
The decision is part of the UAE's continued efforts to align with international tax standards while supporting investment-friendly policies that strengthen its global economic position.
News Source: Emirates News Agency
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