For Fund and Wealth Managers, the Test Is Your Licence

Most Qualifying Activities are defined by what a business does. Two are defined by what it holds. Fund management and wealth and investment management both end with the same condition, and it is a licensing condition rather than a tax one.

The two definitions, and the phrase they share

Article 2(3)(g) of Ministerial Decision No. 229 of 2025 says fund management services includes portfolio management, risk management, discretionary and non-discretionary fund management services and other services relating to the day-to-day management and operation of an investment fund by a fund manager appointed by the fund or its investors, including those activities delegated by an investment fund or its fund manager to an investment advisor or sub-advisor, that are subject to the regulatory oversight of the Competent Authority in the State.

Article 2(3)(h) says wealth and investment management services includes the activities of providing discretionary and non-discretionary investment management and advisory services, portfolio management and wealth and investment advisory services, that are subject to the regulatory oversight of the Competent Authority in the State.

What that means for an unregulated manager

A family office, a single-family investment company or an advisory business operating out of a general commercial free zone may do work that is indistinguishable from a regulated manager's. Under these two entries it does not qualify, because the condition attaches to regulatory status rather than to the substance of the work.

That is not the end of the analysis, and it is worth separating the questions. Income from transactions with a Free Zone Person that is the beneficial recipient qualifies without needing to be a Qualifying Activity at all. Holding shares and securities for investment purposes is a separate Qualifying Activity in its own right, with its own twelve-month test. An unregulated manager is therefore looking at different routes rather than at nothing.

The advantage regulation buys

There is a reason to care about the classification beyond the label, and it is the most commercially significant point in these two entries.

Transactions with natural persons are an Excluded Activity. For most free zone businesses that is a hard boundary: selling to an individual produces non-qualifying revenue, and the FTA's own examples break the de minimis cap on sums as small as AED 100.

Delegation is inside the definition

The fund management limb expressly reaches activities delegated by an investment fund or its fund manager to an investment advisor or sub-advisor. A UAE free zone entity acting as sub-advisor to an offshore manager is described directly, provided it is itself subject to the regulatory oversight of the Competent Authority.

The appointment wording matters too. The definition speaks of a fund manager appointed by the fund or its investors, which points at the mandate rather than at the group chart.

A coherent business, not a single mandate

The FTA guide applies a general qualification to every Qualifying Activity: the scope encompasses processes that form a natural and integral part of a coherent business conducted in relation to that activity, and a solitary activity may not constitute a Qualifying Activity at all. A single advisory engagement is weaker evidence than a managed book with mandates, people and a regulatory permission being used.

What to check

1. Confirm which entity holds the regulatory permission, and that it is the same entity earning the management or advisory revenue.
2. Check the permission is from a Competent Authority as defined — the Central Bank, DFSA, FSRA, SCA or an entity determined by the Minister — and not a commercial licence from the free zone authority.
3. Where the mandate is delegated, confirm the delegation is from an investment fund or its fund manager and that the delegate itself sits under that oversight.
4. For an unregulated manager, route the income deliberately: holding of shares and securities, or transactions with a Free Zone Person that is the beneficial recipient, or de minimis.
5. Where individual clients are served, confirm the activity is one of the four carved out of the natural persons exclusion before assuming that revenue qualifies.

Ministerial Decision No. 229 of 2025 repealed Ministerial Decision No. 265 of 2023 and takes effect from 1 June 2023. Regulatory permissions and their scope are a separate question from the tax analysis and should be confirmed with the relevant authority. Confirm the position for your own facts before relying on it.