DIFC Fintech Startup Case Study

The Challenge

PayFlow Technologies* is a DIFC-licensed fintech startup providing payment processing solutions to businesses across the GCC. With the introduction of UAE Corporate Tax, the company faced a complex situation: maintaining their Qualifying Free Zone Person (QFZP) status to benefit from the 0% CT rate while scaling their business operations.

*Company name changed for confidentiality

The stakes were high. With projected taxable income of AED 25 million, losing QFZP status would mean a CT liability of AED 2.25 million. The company needed to:

Continuously monitor their revenue composition (qualifying vs. non-qualifying activities)
Ensure de minimis thresholds for mainland revenue weren't exceeded
Maintain proper documentation for all transactions
Prepare for potential FTA audits with complete records
Track transfer pricing compliance for related party transactions

"The QFZP rules are intricate, and one wrong move could cost us millions. We needed a system that could monitor our status in real-time, not just at year-end when it's too late to course-correct."
- CFO, PayFlow Technologies

The Solution

PayFlow Technologies implemented TaxSey's Free Zone compliance module, specifically designed for companies seeking to maintain QFZP status. The platform provides continuous monitoring and proactive alerts.

QFZP Monitoring Dashboard

Real-time Metrics Tracked

Qualifying activity revenue %
Non-qualifying income threshold
De minimis limit tracking
Substance requirements checklist

Automated Alerts

Approaching 5% de minimis threshold
New transaction classification needed
Related party pricing review due
Substance documentation reminder

Key Features in Action

Revenue Classification Engine

TaxSey automatically classifies each revenue stream based on QFZP qualifying activity definitions. When PayFlow launched a new B2B payment product, the AI immediately flagged it for review, allowing the finance team to confirm it qualified before recognizing significant revenue.

Proactive Threshold Alerts

In Q3, PayFlow's mainland-sourced revenue unexpectedly increased due to a large enterprise client. TaxSey's alert system notified the CFO when they reached 3.5% of the 5% de minimis threshold, allowing them to restructure the contract to preserve QFZP status.

Audit-Ready Documentation

Every transaction is automatically tagged with its QFZP classification, supporting documentation, and audit trail. When the FTA requested information, PayFlow generated a complete compliance package in minutes rather than weeks.

"The Q3 alert probably saved us AED 2 million in taxes. Without TaxSey's real-time monitoring, we wouldn't have caught the threshold issue until year-end, when it would have been too late."
- CFO, PayFlow Technologies

The Results

Maintained 0% CT Rate

PayFlow successfully maintained QFZP status through their first full tax year, benefiting from the 0% CT rate on qualifying income. This represented savings of over AED 2 million compared to the standard 9% rate.

Operational Efficiency

The finance team reduced time spent on QFZP compliance tracking from an estimated 15 hours per week to just 2 hours for review and exception handling. The automated classification handles 95%+ of transactions without manual intervention.

Investor Confidence

During their Series B fundraise, PayFlow's ability to demonstrate robust tax compliance processes gave investors confidence in the company's governance and risk management practices.

Looking Forward

As PayFlow continues to scale, they're using TaxSey's scenario planning tools to model the tax implications of expansion into new markets and product lines. The platform helps them make strategic decisions that optimize both growth and tax efficiency.