Qualifying Free Zone Person UAE: Pay 0% Corporate Tax on Qualifying Income

Introduction: The End of the “Zero Tax” Myth

For decades, the UAE’s free zones were synonymous with zero taxation. Businesses flocked to Dubai, Abu Dhabi, Sharjah, and other emirates specifically to enjoy this tax-free environment.

But with Federal Decree-Law No. 47 of 2022 and the rollout of Corporate Tax from 1 June 2023, the landscape has changed fundamentally. Free zone companies are no longer automatically exempt. Only those that qualify as a Qualifying Free Zone Person (QFZP) can enjoy the 0% corporate tax rate, and only on their qualifying income. Note that QFZP status is different from being a fully exempt person under UAE corporate tax law — exempt persons (government entities, investment funds, pension funds, etc.) are not taxable at all, while QFZPs are taxable persons who pay 0% on qualifying income.

Everything else? Taxed at 9%. Free zone companies that own UAE real estate or earn rental income from UAE-based properties should also note that such income is typically classified as Excluded Income, not qualifying income — see our guide: UAE Corporate Tax on Rental Income 2026.

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