Splitting a business to stay under AED 3 million
Can I open a second company so each stays under AED 3 million for Small Business Relief?
The situation
The rules target artificial separation of a business to get the relief. If the FTA sees one business split across entities mainly for the relief, it can deny it.
The law
- Ministerial Decision 73 of 2023 as amended by Ministerial Decision 131 of 2026: Small Business Relief for revenue up to AED 3 million, tax periods ending on or before 31 December 2029
- Art 50, Federal Decree-Law 47 of 2022: General anti-abuse rule
What it means for you
Genuine separate businesses with their own staff, customers and purpose are fine. Example: a single trading business split into two companies with the same staff and clients, each at AED 2 million, is high risk. A trading company and a separate restaurant owned by the same person are separate businesses.
What to do
- Write down the commercial reason for each entity.
- Keep separate staff, customers and books.
- Do not shift invoices to stay under the line.
- Take advice before restructuring.
We can do this for youCorporate Tax return with Small Business Relief for SMEs and freelancers with revenue up to AED 3 million: AED 2,250