Compulsory social security activities

Under Ministerial Decision No. 229 of 2025, compulsory social security is categorized as an Excluded Activity for Qualifying Free Zone Persons. This is because it involves transactions with natural persons and constitutes a sovereign function typically reserved for Government Entities. Forensic audit must ensure that any administrative fees charged by a Free Zone entity for managing these funds are not erroneously treated as Qualifying Income.

Audit Red Flag

Misclassification of private commercial insurance or voluntary pension schemes as 'compulsory' to exploit sovereign immunity or exempt status

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