PUBLISHED 2026 · SCENARIO COMPARISON · FORMENZO

Is a UAE free-zone company tax-free?

A UAE free-zone company is not automatically tax-free. A QFZP is 0% only on qualifying income and 9% on taxable income that is not qualifying, without the AED 375,000 standard band. A free-zone company that is not a QFZP follows the standard 0% up to AED 375,000 of taxable income and 9% above it. A QFZP cannot elect Small Business Relief.

Compare published 2026 scenarios first. Final authority line items, eligibility and availability are confirmed in writing after review and before payment.

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By the Formenzo Research Desk · compare all 9 zones

How to read the QFZP rules

QFZP treatment depends on the full facts: qualifying activities and income, adequate substance, transfer-pricing compliance, audited financial statements, no election into standard rates, and the de-minimis test. Customer geography alone does not determine the result.

Two rate paths

A standard Taxable Person is 0% up to AED 375,000 of taxable income and 9% above it. A QFZP is 0% on qualifying income and 9% on taxable income that is not qualifying, without the AED 375,000 standard band. QFZPs cannot elect Small Business Relief.

Most free-zone juridical persons should check their registration and filing obligations with the FTA. This is general information, not tax advice.