PUBLISHED 2026 · SCENARIO COMPARISON · FORMENZO

What is a Qualifying Free Zone Person (QFZP)?

A Qualifying Free Zone Person (QFZP) is a free-zone company that keeps the 0% corporate-tax rate on its qualifying income by meeting all of the FTA's conditions: adequate substance, qualifying income, transfer-pricing compliance, audited financial statements, no election into the standard rates, and the de-minimis limit. Its taxable income that is not qualifying is taxed at 9% without the AED 375,000 standard band, and 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.

Build my estimate →Get a quote on WhatsApp →
RELATED

By the Formenzo Research Desk · compare all 9 zones

The six conditions, all of which must hold

  1. Adequate substance in the UAE — real people, premises and activity in the zone, not a paper address.
  2. Qualifying income — depends on the activity, counterparty and beneficial-recipient facts under the FTA rules; customer geography alone does not decide it.
  3. Transfer pricing — arm's-length pricing with related parties, plus documentation.
  4. Audited financial statements — mandatory for a QFZP.
  5. No election out — the company has not chosen to be taxed at the standard rates.
  6. De-minimis limit — non-qualifying revenue stays under the lower of 5% of total revenue or AED 5 million. Breach it and QFZP status is lost for that tax period and the following four.

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.