The Qualifying Activity You Can Perform for Yourself

Read the list of Qualifying Activities and one entry is drafted differently from the rest. Manufacturing, distribution, logistics and headquarter services all describe something done for a counterparty. Treasury and financing services to Related Parties or for its own account describes something a company can do entirely inside itself, and that difference turns out to matter a great deal.

What the activity covers

Article 2(3)(j) of Ministerial Decision No. 229 of 2025 says treasury and financing services to Related Parties or for its own account includes the provision of cash and liquidity management, financing, debt management, and financial risk management and related advisory services, including centralised payment and collection activities.

Centralised payment and collection is the phrase that brings a group payments hub inside the activity by name, rather than leaving it to be argued. Cash pooling, intercompany lending, hedging the group's currency and rate exposure, and the advisory work around all of it are described directly.

Why for its own account is the important half

The FTA Free Zone Persons guide closes a route that free zone companies reach for constantly. Where a company holds surplus funds not needed immediately but retained for identified future working capital requirements, the investment of those surplus funds is not considered an ancillary activity.

Its worked example is deliberately small. A free zone company deposits working capital in an interest-bearing account and earns AED 100 of interest. That AED 100 cannot be ancillary, but it can arise from the Qualifying Activity of treasury and financing services. The sum is trivial; the classification is not, because non-qualifying revenue is measured against the lower of 5% of total revenue or AED 5,000,000, and a small company can breach on very little.

It also survives an Excluded Activity that would otherwise catch it

Finance and leasing activities are an Excluded Activity. On its own that would be fatal to an intra-group financing function, which is finance and leasing in any ordinary sense of the words.

Article 2(2)(d) resolves it. The Excluded Activity for finance and leasing applies without prejudice to the Qualifying Activities in paragraphs (c), (e), (j) and (k) — trading of Qualifying Commodities, ships, treasury and financing services, and aircraft financing and leasing. Paragraph (j) is cross-referenced in full, including the words or for its own account.

The substance cost of taking this route

Claiming the activity brings its own substance requirement, and the guide is explicit that it cannot be met by relabelling. The core income-generating activities for treasury and financing services must be carried on in the Free Zone or Designated Zone, and substance is assessed in relation to each activity rather than company-wide.

And the pricing, where the lending is intra-group

Financing to Related Parties is a related party transaction, so the interest rate is a transfer pricing position rather than a commercial preference. Compliance with the arm's length principle is a condition of Qualifying Free Zone Person status, which makes an undocumented intercompany loan rate a status risk rather than an adjustment risk.

What to check

1. Identify every interest and investment income line, however small, and decide which activity it is claimed under — the ancillary route is closed to surplus funds.
2. Where treasury is relied on, evidence it as an activity: a policy, identified people, and decisions being taken rather than an account earning interest passively.
3. Confirm the substance for treasury is separate from the substance supporting the main activity, with no employee counted twice.
4. Price intercompany lending on an arm's length basis and document it, because the whole of that revenue is related party revenue.
5. For a group payments hub, note that centralised payment and collection activities are named in the definition and record the function accordingly.

Ministerial Decision No. 229 of 2025 repealed Ministerial Decision No. 265 of 2023 and takes effect from 1 June 2023. The FTA guide predates it and cites the earlier decision. Confirm the position for your own facts before relying on it.