Whether you’re freelancing, working as a contractor, or running your own business, being self-employed in the UAE brings numerous opportunities, such as securing lucrative business deals and accessing funds that help get your venture off the ground.
However, it also brings with it some requirements that shouldn’t be overlooked. Here are key tips for the self-employed in the United Arab Emirates to ensure you maximise the opportunities available to you.
1. Understand Your Business Options
The UAE allows several ways for entrepreneurs to do business in the country, including:
- Sole Proprietorship
- Civil Company
- Limited Liability Company (LLC)
- Foreign Company Branch
- Free Zone Company
As a self-employed person in the UAE, it’s easiest to set up as a freelancer, but you may also choose to establish your business as a sole proprietorship or a civil company, both of which allow 100% foreign ownership.
In a sole proprietorship, a single shareholder is allowed, whereas a civil company allows two or more shareholders.
A commercial or industrial company can also be an option, but if you are an expat, you will need to have a local partner, which can be a UAE national or a corporation.
Companies like Virtuzone offer a corporate nominee service, where they take on the role of your local partner, allowing you to retain 100% control of your company.
Whatever business structure you fall into, it’s recommended that all self-employed workers have professional indemnity insurance in place to protect them. When you’re just starting out, an expensive lawsuit is the last thing you need.
2. Make Sure You Get the Right Licence
Licences fall into two main categories: a mainland licence, which allows you to trade inside and outside the country without any restriction, but will require you to find a local partner; or a free zone licence, which offers attractive tax incentives and 100% ownership, but allows you to trade only within your free zone jurisdiction.
TIP: If you’re coming to the UAE from overseas, you’ll also need to have a visa that is sponsored by the jurisdiction you work in, and you will need a medical check and health insurance too.
3. Free Zones for Freelancing
If you’re looking to work as a freelancer, then you can register in select free zones that offer a freelance permit and visa. These free zones include Dubai Internet City, Dubai Media City, Dubai Knowledge Park, Fujairah Creative City Free Zone, Ajman Free Zone, and Ras Al Khaimah Economic Free Zone.
This can be done by submitting an application form to the relevant governing authority, as well as other documents, such as your passport copy, passport-size photo, curriculum vitae (CV), and a No Objection Certificate from your sponsor, if it’s applicable.
4. Have a Base
There are plenty of offices to rent in some of the more business-focused emirates and areas for the self-employed, or you may be able to work from a client’s office. If you are freelancing, then you could think about using a co-working space, which you usually pay for on a monthly basis. A co-working space is a great way to have a more flexible way to work.
5. Understand How the Tax System Works
The UAE’s free zones bring a lot of tax incentives, including zero corporate and personal tax. You are also exempt from import and export duties, as well as from currency restrictions. Plus, you can repatriate 100% of your profits.
However, the introduction of VAT in the UAE means you’ll need to register if you earn more than AED 375,000. If you earn between AED 187,500 and AED 375,000, then VAT registration is optional. Make sure you keep all receipts and records up-to-date to prove this.
6. Understand the Business Scene and Connect
Some of the biggest sectors in the UAE are oil and gas, industrial, IT, construction, and finance. However, the UAE also holds many opportunities for those looking to work in tourism, media, design, and fintech, with many multinational companies having a base here.
If you’re new to the UAE, it’s a good idea to learn about the business culture as much as you can. When attending trade shows or reaching out to potential clients, personal connections are key. Be prepared to discuss personal matters ahead of business, and remember that exchanging gifts when first meeting new clients is often the norm.
Being self-employed in the UAE can help you access new markets and clients, as well as new streams of investment to propel your venture.
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