UAE Corporate Tax Rules Strike the Right Balance for Foreign Investors in the Trump Era

The United Arab Emirates (UAE) has taken a significant step forward in its corporate tax policy, unveiling new rules that aim to attract foreign investment while maintaining global competitiveness. These regulations, introduced through Cabinet Decisions No. 34 and 35 of 2025, clarify tax obligations for foreign investors in Qualifying Investment Funds (QIFs) and Real Estate Investment Trusts (REITs). Against the backdrop of shifting global tax policies under U.S. President Donald Trump‘s administration, these measures position the UAE as a leader in fostering a business-friendly environment. Simplified Taxation for Foreign Investors The UAE’s new corporate tax framework introduces much-needed clarity for foreign investors. The rules define when a “nexus” or taxable presence is established for non-resident investors in QIFs and REITs. Previously, the lack of clear guidelines created uncertainty, deterring potential investments. Under the updated regulations: A nexus is established either on the dividend distribution date (if at least 80% of income is distributed within nine months of the financial year-end) or on the date of ownership acquisition (if this threshold is not met). For QIFs exceeding a 10% real estate asset threshold, only 80% of real estate income will be subject to UAE corporate tax. Breaches in ownership diversity