Emirates R&D Council Pre-Approval: What We Know, What We Don't, and What to Do Right Now

Why Pre-Approval Matters

Under Ministerial Decision No. 24 of 2026 and Cabinet Decision No. 215 of 2025, the UAE R&D Tax Credit is not a self-assessed relief that businesses can claim simply by filing a tax return. Pre-approval from the Emirates R&D Council is a mandatory condition. Without it, no credit can be claimed — regardless of how much qualifying expenditure a business has incurred.

This is fundamentally different from the UK R&D tax credit regime, where companies self-assess their eligibility and file claims within their corporation tax return. The UAE regime places a gatekeeper function with a specialist government body: the Emirates R&D Council.

The practical consequence is straightforward but high-stakes: the quality and completeness of the pre-approval application will determine whether a business accesses the credit at all. Businesses that have structured their R&D activities carefully and documented them well will be best placed to succeed. Those that apply without preparation risk rejection.

What We Know From the Legislation

Although the pre-approval portal itself has not been published, the legislation — specifically MD 24/2026 — sets out the framework within which the Emirates R&D Council will operate. Drawing on the published text, there are several clear requirements that any pre-approval application must address.

Project Scope and Frascati Compliance

The UAE R&D Tax Credit applies to expenditure on Research and Development activities as defined by the Frascati Manual — the internationally recognised OECD framework for R&D classification. This means qualifying activities must demonstrate all five Frascati criteria:

1. Novel — "It is novel, in that it aims to produce new findings." (MD 24/2026, Art. 3(1)(a)) The work is aimed at generating new knowledge or applying existing knowledge in a new way.

2. Creative — "It is creative, involving original concepts or hypotheses." (MD 24/2026, Art. 3(1)(b)) The work involves original concepts or hypotheses.

3. Uncertain — "It is uncertain, in that the outcome or means of achieving it are not known in advance." (MD 24/2026, Art. 3(1)(c)) The outcome cannot be determined in advance using current knowledge.

4. Systematic — "It is systematic, following a plan and budget." (MD 24/2026, Art. 3(1)(d)) The work is conducted in a planned, methodical way with records kept.

5. Transferable / Reproducible — "It is transferable or reproducible, such that its results can be applied or replicated in other contexts." (MD 24/2026, Art. 3(1)(e)) Results can be shared or replicated.

Any pre-approval application will almost certainly require a project narrative that demonstrates these criteria. Businesses should be able to articulate, in writing, exactly how their R&D activities satisfy each of the five Frascati tests. Vague descriptions — "we developed new software features" or "we improved our processes" — will not be sufficient.

Minimum Qualifying Spend Threshold

The legislation sets a minimum qualifying R&D expenditure of AED 500,000 per project per tax period. This is not a total business spend threshold — it applies project by project. A business with five separate R&D projects must demonstrate that each individually crosses the AED 500,000 threshold. Projects that fall below this level are not eligible, regardless of their scientific merit.

Staffing Thresholds and Credit Rate

The credit rate a business can claim depends on both its qualifying expenditure and the number of qualifying R&D staff employed. The three tiers under MD 24/2026 are:

The credit is calculated by applying each rate to the portion of qualifying expenditure that falls within the corresponding band. Both the expenditure threshold and the staff threshold must be met simultaneously for each tier. A separate minimum of AED 500,000 of qualifying R&D expenditure per project per tax period also applies (CD 215, Art. 5(3)(b)).

Both conditions must be satisfied simultaneously — spend alone or headcount alone is not sufficient. This dual condition is arguably the most misunderstood aspect of MD 24/2026, and it is almost certain to feature prominently in the pre-approval process.

The AED 5 Million Expenditure Cap

The total qualifying R&D expenditure per Qualifying Entity or Tax Group per tax period is capped at AED 5,000,000. This cap applies to the expenditure — not to the credit itself. The maximum credit that can arise from AED 5,000,000 of qualifying expenditure, calculated through the tiered structure, is AED 2,000,000 (AED 150,000 at 15% on the first AED 1M, plus AED 350,000 at 35% on the next AED 1M, plus AED 1,500,000 at 50% on the remaining AED 3M).

What We Don't Yet Know

Honest assessment requires acknowledging what remains unclear. The following questions will only be answered once the Emirates R&D Council publishes the portal and any associated guidance:

• The precise format of the application form — whether it is structured, narrative, or a combination of both

• The evidence standard required — what level of technical detail will satisfy the Council

• Processing timeframes — how long pre-approval will take and whether retroactive approval is possible for activities already under way

• Sector-specific guidance — whether the Council will publish guidance for particular industries (software, biotech, energy, etc.)

• Annual renewal requirements — whether approval is granted per project once or renewed annually

• The appeals process — what recourse a business has if pre-approval is refused

RDvault is monitoring the Emirates R&D Council's publications closely and will update clients as soon as the portal launches or pre-guidance is published. Businesses should not wait for the portal to start preparing.

How to Prepare Right Now

The good news is that the most important preparation work can be done today, without access to the portal. The quality of a pre-approval application will be determined primarily by the strength of the underlying project documentation. Businesses that invest time now in building strong documentation will have a significant advantage.

Step 1: Define Your R&D Projects Clearly

The first task is to identify and clearly define each qualifying R&D project. A "project" in the R&D tax context is not a commercial deliverable or a client engagement — it is a discrete scientific or technological investigation aimed at resolving a specific uncertainty.

For each project, document:

• The technological or scientific uncertainty being addressed

• The baseline of existing knowledge at the project start date

• The specific hypothesis or approach being tested

• How the project advances knowledge beyond the baseline

• The planned methodology and experimental approach

• The outcome of the work (even if the outcome was negative)

Step 2: Map Staff to Projects

The staffing threshold requirements make staff allocation critically important. For each project, document which employees are working on qualifying R&D activities, what proportion of their time is dedicated to R&D, and the basis on which that allocation has been determined.

Timesheets — or at minimum, a well-documented methodology for estimating time allocation — will be essential. Businesses that currently have no time-recording system for R&D staff should implement one immediately.

Step 3: Quantify Qualifying Expenditure by Project

Each project must individually cross the AED 500,000 minimum expenditure threshold. Businesses should build a project-level expenditure schedule that maps each cost category — staff costs (plus the 30% overhead uplift), consumables, subcontract fees, and cost-contribution arrangements — to specific projects.

Keep all supporting invoices, payroll records, contracts with subcontractors, and any grant documentation. The 7-year record-keeping requirement under MD 24/2026 runs from the end of the Tax Period or Fiscal Year to which the R&D activities relate (Art. 12(1)), not from when the claim is filed.

Step 4: Prepare a Project Technical Report

Based on experience with R&D tax regimes in other jurisdictions, pre-approval applications typically require a technical narrative for each project. This narrative should be written by — or in collaboration with — the technical staff who actually performed the R&D, not by finance or tax teams alone.

The technical report should cover:

• Project background and commercial context

• The specific scientific or technological advancement sought

• Why existing solutions or knowledge were insufficient

• The experimental methodology employed

• Iterations and pivots during the work

• Results achieved and knowledge generated

Step 5: Identify Relevant Staff Credentials

The Emirates R&D Council may request evidence that employees classified as R&D staff are genuinely engaged in qualifying activities. This could include CVs, academic qualifications, professional certifications, job descriptions, and employment contracts. Prepare these documents now.

The Cost of Being Unprepared

UAE businesses that wait for the portal to launch before beginning their preparation will face two significant risks.

First, if the portal requires documentation that spans the current tax period — timesheets, project records, expenditure schedules — businesses that have not been recording this information contemporaneously will struggle to reconstruct it. Retrospective reconstruction of project records is always weaker than contemporaneous documentation and will be viewed with scepticism by any reviewing body.

Second, with competitors in the advisory market moving quickly to establish their UAE R&D tax practices, businesses that engage early with a specialist adviser will benefit from structured preparation guidance. Those that leave it until the portal launches will be competing for adviser time with every other UAE business in the same situation.

What RDvault Recommends

RDvault's recommendation is straightforward: treat the pre-approval preparation as an ongoing workstream from today, not a one-off filing exercise when the portal eventually launches.

Specifically:

• Implement time-recording for all staff engaged in R&D activities

• Define and document each R&D project with reference to the Frascati criteria

• Build a project-level expenditure schedule, updated monthly

• Prepare draft technical narratives for your two or three largest projects

• Review your subcontractor and cost-contribution arrangements to confirm they meet the UAE rules

• Engage a specialist adviser to review your documentation before submission

When the Emirates R&D Council portal goes live, well-prepared businesses will be able to submit on day one. Unprepared businesses will spend months catching up — potentially missing the first filing window altogether.

Ready to prepare your UAE R&D Tax pre-approval application?

RDvault specialises in UAE R&D Tax Credits. The team has 16 years of R&D tax experience across UK and UAE regimes and can help structure your projects and documentation well before the portal launches.

See how it works  |  How to claim  |  Speak to the team

Summary

The Emirates R&D Council pre-approval portal has not yet been published. When it launches, UAE businesses will need to demonstrate that their R&D projects satisfy the Frascati Manual criteria, meet the minimum AED 500,000 per-project expenditure threshold, and satisfy the staffing headcount conditions for the relevant credit rate tier.

The most important preparation a business can do right now is build robust project documentation: technical narratives, staff time records, project-level expenditure schedules, and evidence of staff credentials. Businesses that begin this work today will be positioned to submit their pre-approval applications quickly and confidently when the portal opens.

RDvault is monitoring the Emirates R&D Council's publications and will publish updated guidance as soon as the portal launches. Contact the team to discuss preparing your documentation now.