Sep 5

Beyond Trading: Treasury, Distribution, and the De-minimis Rule for QFZPs

While the headlines focus on commodities, MD 229/2025 also clarified Treasury services, Distribution activities, and the de-minimis rule. These updates provide both opportunities and risks for Free Zone entities.

📌 Practical Examples

  • Treasury companies can now qualify when investing their own funds (self-investment), not just when lending to group entities.
  • Distributors in JAFZA selling packaged goods to Dubai retailers or public benefit entities still qualify, as long as sales are made from a Designated Zone.
  • A Free Zone trader with 10% consulting revenue fails the de-minimis test, because non-qualifying revenue must be ≤5% or AED 5m.

Why This Matters

The de-minimis rule is unforgiving — once breached, the QFZP status is lost not just for that year, but for the next four years. Treasury and distribution activities are powerful opportunities, but must be structured correctly and documented carefully.

Key Takeaways

  • Treasury = Qualifying when to related parties or for self-investment.
  • Distribution from Designated Zones counts when sales are to resellers or PBEs.
  • The 5% / AED 5m test is a cliff-edge — breach it once, lose QFZP for 5 years.

How Fastlane Tax Consultancy Can Help

We help you design operations to stay within the qualifying boundaries:

  • · Revenue Mapping: We test all revenue streams against the de-minimis rule before you file.
  • · Activity Segregation: If you risk breaching limits, we help restructure non-core services into a separate entity.
  • · Treasury Documentation: We build files showing how related-party loans or self-investments meet QFZP conditions.
  • · Distribution Proofs: We gather reseller/PBE evidence to show mainland transactions remain qualifying.

With Fastlane, you avoid the hidden traps that could wipe out your QFZP status.

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