VERIFIED 2026 · FORMENZO
What is a Qualifying Free Zone Person (QFZP)?
A Qualifying Free Zone Person (QFZP) is a UAE free-zone company that meets the conditions to pay 0% corporate tax on its qualifying income. It must keep adequate substance in the free zone, earn qualifying income (such as transactions with other free-zone businesses or qualifying activities), maintain audited financial statements, comply with transfer-pricing rules, and not elect to be taxed at the normal 9%. Income that is not qualifying is taxed at 9%.
Formenzo publishes real, all-in 2026 figures, confirmed in writing, with no sales call. See the full Cost Index or the open price dataset (CC-BY).
Build your exact price →By the Formenzo Research Team · compare all 9 zones
How QFZP status changes the tax bill
QFZP treatment is not bought at incorporation — it is a set of tests the company keeps passing: genuine substance in the zone, audited accounts, transfer-pricing files and income that counts as qualifying. The rules are federal, so a licence from any of the nine zones in the Cost Index can support the status — a dearer licence buys no extra tax advantage.
Who picks this option
Planning around QFZP status makes sense where real profit sits inside the free-zone perimeter: traders selling mainly to other free-zone companies, groups running listed qualifying activities such as logistics, manufacturing or fund management, and holding structures with cross-border income. A consultant billing mainland clients usually gains little — that revenue is generally taxed at 9% either way.
Two things founders ask
Is the status automatic once the licence is issued? No. The company still registers for corporate tax, and every condition is tested for each tax period — an annual discipline rather than a box ticked at setup.
Does mainland revenue end the 0% rate? Not by itself: non-qualifying income is simply taxed at 9%, and a small tolerance exists. Past that threshold the entire status can be lost, so mixed revenue is worth a professional review — see accounting, tax & VAT.