UAE Free Zone Qualified Free Zone Person (QFZP)

📅 Last reviewed: November 3, 2026📋 By: UAE Freezone Compare Research Team

UAE Free Zone Qualified Free Zone Person (QFZP) — Complete 2026 Guide to 0% CT Rate

UAE free zone companies can qualify for a 0% Corporate Tax rate as a Qualified Free Zone Person (QFZP). Here is the complete 2026 guide.

In this guide:

Definition: A UAE free zone company that meets all the conditions to benefit from the 0% CT rate on Qualifying Income
Rate: 0% on Qualifying Income; 9% on Non-Qualifying Income (same as standard UAE CT)

1. Adequate Substance: Must have adequate substance in the UAE free zone (real economic presence)
2. Qualifying Income: Must derive Qualifying Income (income from free zone transactions or specified activities)
3. Compliance: Must comply with UAE CT law; file tax returns; maintain proper books
4. Not elect to standard CT: Must not have elected to be subject to standard 9% CT
5. Not a Disqualifying Revenue: Must not derive Disqualifying Revenue (income that would strip QFZP status)

Income from transactions with other free zone persons
Income from qualifying activities with any person (non-UAE, or specified qualifying activities)
Passive income from UAE investments (dividends, interest) from non-UAE or qualifying sources

Income from UAE mainland customers: Generally non-qualifying; subject to 9% CT above AED 375,000 threshold
Exceeds de minimis: If non-qualifying income exceeds 5% of total revenue OR AED 5M, QFZP status is lost entirely for that year

Employees: Adequate number in the free zone
Office/premises: Adequate UAE address (even virtual office may qualify for small companies)
Decision-making: Core income-generating activities managed from free zone