UAE Unveils Updated Corporate Tax Rules for Free Zones in 2025
UAE’s Free Zones: New Tax Rules Reshape the Game in 2025
The UAE has never shied away from rewriting the rules to stay ahead. Now, it’s doing it again. In a surprise move, the Ministry of Finance issued Ministerial Decisions No. 229 and 230 of 2025, introducing new tax rules that could redefine Free Zone businesses’ operations.
The changes are not just technical updates.
They mark a turning point in the understanding of corporate tax treatment, bringing clarity on qualifying activities while quietly expanding the scope of who falls under the regime.
This isn’t just another policy update for a nation where Free Zones are more than just business hubs. They fuel diversification, attract foreign capital, and secure the UAE’s role as a global player.
It’s a recalibration of the country’s long-term strategy.
Key Changes in Qualifying Activities and Tax Scope
The 2025 update isn’t just a tweak—it’s a clean slate.
Ministerial Decision No. 265 of 2023 is out. In its place comes Decision No. 229 of 2025, which rewrites the definition of qualifying activities inside the Free Zones.
The shift is bold.
Qualifying Commodity Trading has been expanded far beyond its earlier limits.
Businesses dealing in industrial chemicals, environmental commodities such as carbon credits, and associated by-products now fall within scope.
Perhaps the most striking move is removing the “raw form” restriction. No longer confined to unprocessed commodities, the new rules open the door to metals, minerals, energy products, agricultural goods, and their by-products.
But there’s a catch.
To qualify, transactions must carry the weight of transparency, backed by a Quoted Price from a recognised commodity exchange or Price Reporting Agency. Without that seal of credibility, the tax benefit won’t apply.
Treasury and Financing Services Clarification
If commodities were the headline change, treasury and financing services are the quiet power play.
The Ministry has now spelled out what counts as qualifying treasury activities, ending months of speculation among multinationals and holding companies.
The clarification goes deeper than expected. Self-investment and intra-group financing for related parties are now officially recognised as qualifying activities. This single move positions Free Zones as trading hubs and financial nerve centres for global businesses.
The winners are clear: holding companies and multinational groups that have long sought to centralise their treasury operations in the UAE. The Free Zones became more attractive than ever, combining regulatory clarity with real tax advantages.
Recognised Price Reporting Agencies
The update goes beyond who trades and into how those trades are valued.
Ministerial Decision No. 230 of 2025 sets out, for the first time, a list of recognised Price Reporting Agencies and exchanges that Free Zone firms must use.
On the surface, it’s a technical detail. In practice, it’s a guardrail. The Ministry is closing the door on inflated numbers or vague valuations by linking transactions to prices from trusted global benchmarks.
For businesses, the message is clear: play by international pricing rules or risk losing the tax break. This move is designed to build confidence in the UAE’s system while keeping Free Zones competitive on the world stage.
Impact on Free Zone Business Environment
On paper, the update looks like another technical tweak.
In reality, it’s a reminder of why Free Zones matter to the UAE’s economy in the first place. They aren’t just business parks but magnets for investment, job creation, and new industries. The latest rules give that role a firmer footing.
By syncing with international tax practices, the UAE is trying to walk a fine line: keep its corporate tax regime competitive while ensuring global investors see it as credible. It’s a balancing act; low rates mean attraction, but recognised standards mean trust.
One detail stands out.
The decision to include environmental commodities, such as carbon credits, ties Free Zone incentives to the UAE’s green agenda. Growth and sustainability used to be separate debates. Now, at least in policy terms, they’re colliding. And for businesses weighing their next move, that collision could shape investment decisions more than they expect.
Practical Implications for Businesses
For Free Zone companies, the changes bring both relief and a warning. Relief is because the fog around tax planning is finally lifting. Managers now know what counts as qualifying activity, what doesn’t, and how to stay inside the safe zone.
But the warning is just as sharp. The zero percent corporate tax rate isn’t automatic—it has to be earned. Firms must prove they follow the new rules, from pricing trades with recognised benchmarks to sticking within the updated activity list. Miss the mark, and the benefit disappears.
There’s an opportunity too. The broader scope of commodity trading and more explicit treasury rules give multinationals more room to work outside of the UAE. For some, that could mean turning Free Zone offices into full-scale financial hubs rather than simple trading desks. For others, it may just mean less uncertainty when planning the year.
Either way, the ground has shifted.
UAE’s Strategic Vision and Economic Diversification
Free Zones have always been central to the UAE’s push to look beyond oil. They attract capital, talent, and industries that might otherwise bypass the region. The new tax updates don’t change that role; they double down on it.
Officials are making the case that the country can be competitive and credible. Low rates on one hand, alignment with global standards on the other. It’s a tricky balance, but the UAE thinks it can pull it off.
Investors will hear more than numbers in this announcement. The inclusion of green commodities and the tighter pricing rules are signals. The government is betting that businesses will see the UAE not just as a tax-friendly hub but as a place to grow under a framework the rest of the world trusts. Whether that bet pays off is now up to the market.
ADEPTS’ Role in the Shift
For companies in the Free Zones, the new tax rules are not just another memo; they’re a puzzle that needs decoding fast. That’s where ADEPTS has been stepping in.
The firm has built a reputation for guiding startups, SMEs, and multinationals through corporate tax registration, VAT health checks, and compliance filings. However, recent ministerial decisions have expanded its role.
Clients are now leaning on ADEPTS not only for paperwork but also for strategy: how to structure cross-border operations, manage treasury functions, and ensure that a zero percent rate actually sticks.
From advising on recognised pricing to keeping businesses aligned with qualifying activity rules, ADEPTS is positioning itself less like a consultant and more like a partner; one that helps firms stay compliant without losing sight of growth.
Conclusion
Free Zones have always been the UAE’s calling card, and these new tax rules raise the stakes again. Instead of vague guidelines, businesses now have sharper lines to follow — and sharper chances to lose out if they ignore them.
The early movers will lock in the advantages, while the slow ones may end up tangled in compliance costs. This is not just about tax breaks anymore; it’s about trust, transparency, and proving the UAE can run with the toughest global standards without losing its edge.
2025 isn’t a finish line. It’s the opening round in a long game where the UAE is betting big on being the region’s safe, competitive, and future-proof business hub.
References
- Abdou, Mahmoud. ‘Ministry of Finance Issues Two Ministerial Decisions on Qualifying Activities and Excluded Activities in Free Zones for Corporate Tax Purposes and on Recognised Price Reporting Agencies’. Ministry of Finance – United Arab Emirates, 3 Sep. 2025, https://mof.gov.ae/ministry-of-finance-issues-two-ministerial-decisions-on-qualifying-activities-and-excluded-activities-in-free-zones-for-corporate-tax-purposes-and-on-recognised-price-reporting-agencies/.
- ‘Free Zones’. Ministry of Economy and Tourism UAE, https://www.moet.gov.ae.
- Ministerial Decision No. (265) of 2023 Regarding Qualifying Activities and Excluded Activities for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. https://mof.gov.ae/wp-content/uploads/2023/11/27.10.23-EN-Ministerial-Decision-No-265-of-2023-Regarding-Qualifying-Activities-and-Excluded-Activities.pdf.
- ‘الإمارات العربية المتحدة – وزارة المالية’. Ministry of Finance – United Arab Emirates, https://mof.gov.ae/.
- Qualifying Activities and Excluded Activities for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. https://tax.gov.ae/Datafolder/Files/Legislation/Corporate%20Tax/MD-No-265-of-2023-Regarding-Qualifying-Activities-and-Excluded-Activities-en.pdf.
- ‘UAE Clarifies Free Zone Tax Regime with Rules on Activities and Pricing’. Khaleej Times, https://www.khaleejtimes.com/business/uae-clarifies-free-zone-tax-regime.
