Article (2)
Conditions for Exemption of Mutual Fund from Corporate Tax
1. Without prejudice to the conditions set out in Article (10.1) of the Corporate Tax Law, a
Mutual Fund, not including a Real Estate Investment Trust ("REIT"), shall meet all of the
following conditions in order to apply to the Authority to be exempt from Corporate Tax as a
Qualifying Mutual Fund:
a. The main business or business activities conducted by the Mutual Fund shall be
Investment business activities, and any other business or business activities conducted by
the Mutual Fund shall be ancillary or incidental.
b. No single investor and its related parties shall own the following:
1. More than 30% (thirty percent) of the ownership interests in the Mutual Fund,
where the Mutual Fund has less than ten investors.
2. More than 50% (fifty percent) of the ownership interests in the Mutual Fund, where
the Mutual Fund has ten or more investors.
c. The Mutual Fund shall be managed or advised by an Investment Manager that has a
minimum of three investment professionals.
d. The investors shall have no control over the day-to-day management of the Mutual Fund.
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Cabinet Resolution of 2024 Concerning the Conditions for Qualifying Mutual Funds for the Purposes of Federal
Decree-Law of 2022 Concerning the Corporate and Business
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2. For the purposes of applying paragraph (a) of Clause (1) of this Article, the following shall be
observed:
a. Where Business or Business Activities of a resident Investment Manager are assigned to a
resident Mutual Fund, the Taxable Income of the Investment Manager shall be adjusted
to include the income assigned to the Mutual Fund, in accordance with Article (20) of the
Corporate Tax Law.
b. Business or business activities of an Investment Manager that are assigned to a resident
Mutual Fund shall be considered to be Investment Business activities where they meet at
least one of the following conditions:
1. To be subject to Corporate Tax in the State through the Investment Manager.
2. To be undertaken by an Investment Manager that would meet the conditions under
Clause (1) of Article (15) of the Corporate Tax Law, had the reference to the Non-
Resident Person in that Clause was related to a Resident Person.
c. Other Business or Business Activities that the Mutual Fund conducts shall be considered
as ancillary or incidental if the aggregate revenue of such Business or Business Activities
combined does not exceed 5% (five percent) of the total revenue of the Mutual Fund in
the same Fiscal year.
3. The Mutual Fund shall be considered to have met any of the ownership interest conditions
under paragraph (b) of Clause (1) of this Article as the case may be, in the first two Fiscal years
of the establishment of the Mutual Fund if there is sufficient evidence to demonstrate the
intention of the investors to meet these conditions after the first two Fiscal years, as
determined by the Authority.
4. Where a Mutual Fund does not meet the conditions under Clause (3) of this Article, the
Mutual Fund shall cease to be treated as an Exempt Person from the beginning of the third
fiscal year of its establishment.
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Cabinet Resolution of 2024 Concerning the Conditions for Qualifying Mutual Funds for the Purposes of Federal
Decree-Law of 2022 Concerning the Corporate and Business
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