Defence activities

Defence activities are classified as sovereign-linked functions. Under Ministerial Decision No. 229 of 2025, income derived from these activities is explicitly categorized as Excluded Income for Free Zone Persons to prevent the erosion of the tax base on government-funded security mandates and to maintain parity with non-FZ contractors.

Audit Red Flag

Mischaracterization of military hardware supply or defense-related technical services as 'Qualifying Services' or 'Distribution of Goods' to exploit the 0% regime.

Which UAE zones permit this activity?

Scout checks the current permission status for this activity across every UAE zone against your specific structure.