UAE Ministerial Decision 229/2025: the new Free Zone Person regime

The third generation of free zone regulations broadens qualifying activities and tightens substance requirements.

What changes

Ministerial Decision 229/2025, published in September 2025, replaces the MD 265/2023 framework and rewrites eligibility to maintain the 0% Corporate Tax as Qualifying Free Zone Person (QFZP).

Expanded qualifying activities

Newly added:

Commodities trading (including derivatives on physical commodities).
Treasury and intragroup financing (subject to documented substance).
Ship holding, management and leasing services.
Distribution from a designated zone to the rest of the world and the mainland, not only to other free zones.

Substance: the tightening

Adequate FTEs proportional to activity volume (suggested ratio not published but assessed case-by-case).
Minimum OPEX proportional to qualifying revenue.
Outsourcing permitted only within the free zone or between related QFZPs.

Revised de-minimis

Non-qualifying revenue threshold remains 5% or AED 5M (whichever is lower), now computed on gross revenue and contaminating the entire entity if exceeded.

LatAm implications

Colombian and Mexican groups channelling regional trading through DMCC, JAFZA or IFZA must:

Re-map business lines to the new catalogue.
Document substance with auditable metrics (payroll, office, decisions).
Evaluate migrating treasury functions to the UAE entity.