Why free zone is its own discipline.
Every UAE free zone has its own authority, its own regulations, its own audit requirements, and its own definition of what activities qualify for the 0% Corporate Tax rate. A free-zone entity that gets the rules right pays no federal tax and minimal authority fees. One that gets them wrong loses QFZP for five tax periods and faces audit findings that can drag through the rest of its trade-licence cycle.
What's included.
- QFZP eligibility test documented annually under Cabinet Decision 100 of 2023, Article 4 — substance, qualifying income, transfer pricing, de minimis
- Substance documentation — employee schedules, asset register, expenditure proportionality, premises evidence
- Authority-specific audit reports where the free zone mandates audited financial statements
- Free-zone-to-mainland conversion advisory (and vice-versa) when restructuring is warranted
- License-renewal coordination with timing windows for compliance documents
- Authority correspondence handling — responses to information requests, audit findings, compliance queries
Free zones we work across.
| Authority | Audit required? | Notes |
|---|---|---|
| DMCC | Yes — annual | Audited FS within 6 months of year-end. Strict. |
| JAFZA | Yes — annual | Audited FS required at licence renewal. |
| DIFC | Yes — annual | DFSA-registered firm required for certain activities. |
| ADGM | Yes — annual | FSRA-registered firm required for certain activities. |
| IFZA | Optional | Required only for certain activities or by request. |
| RAKEZ | Optional | Required for certain activities or 100+ staff. |
| Meydan, SAIF, Hamriyah, KIZAD | Varies | Activity-dependent and changing. |
The substance test that catches everyone.
"Adequate substance" under Article 4(1)(a) of Cabinet Decision 100 means: sufficient employees, sufficient assets, and sufficient operational expenditure — proportionate to the activity. A flexi-desk and one part-time PRO is not substance for a free-zone holding company with USD 10M of declared income. Authorities are increasingly checking this — and so will the FTA when CT audits begin in earnest.
We help you put the right substance in place before the FTA asks — and we document it so that when they do ask, the answer is on file.