Dubai: The freedom of being your own boss … but is the freelance permit the right fit for you? If you are a professional, with a strong network of clients and are looking to shift from a full-time job to a life of freelancing, the UAE has several options available.
However, you may have certain questions regarding the benefits of getting a freelance permit, as opposed to setting up your own limited liability company (LLC), or which free zone authority you should apply to and why?
Gulf News spoke with business set up consultants in the UAE to find out when having a freelance work permit makes sense and the limitations that an aspiring freelancer should keep in mind when applying for a permit.
What is a freelance work permit?
A freelance work permit may be issued by an economic department, like the recently announced freelance permit announced by the Abu Dhabi Department of Economic Development (ADDED), or more often by a free zone. For example, free zones in Dubai’s Media City, Abu Dhabi’s twofour54 and Ajman Creative City offer freelance permits, along with other emirates in the UAE.
Is freelance permit the same as freelance visa?
A freelance permit is essentially a work permit, which is necessary for any individual to legally work in the UAE.
For any expatriate to live in the UAE, whether they are working or not, a visa is essential. However, it is not mandatory to be on a freelance visa if you are working on a freelance permit.
For example, if you are on a family visa, sponsored by your parent or spouse, you can stay on the family visa and only apply for a freelance permit. Similarly, if you are employed full-time by a UAE-based employer and are on their employment visa, you can work part-time to pursue a passion or supplement your income by applying for a freelance permit. In some cases, the permit issuing authority may ask you to submit a No Objection Certificate (NOC) from your visa sponsor as part of the required documents.
How does a work permit differ from a business licence?
If you are working part-time as a freelancer, with a full-time job taking care of your primary source of income, the work permit can help you work legally as an expert in your field.
However, if freelancing is going to be your only work engagement and primary source of income, it is important to understand the pros and cons of applying for a freelance work permit as opposed to setting up a business registered under your name.
“A freelancer permit allows an individual to conduct listed commercial business activities in free zones. The permit allows them to conduct these activities on their own name, rather than a company name,” Paul Prendergast, Head of Revenue and Strategy at Creative Zone, a business set-up consultancy, told Gulf News.
A freelancer permit allows an individual to conduct listed commercial business activities in free zones. The permit allows them to conduct these activities on their own name, rather than a company name.
The permit identifies you as a sole practitioner and enables you to conduct your business in your birth name as opposed to a brand or company name.
So, a freelance work permit is slightly different in status compared to having a limited liability company (LLC) or a sole propietorship, where you set up a business under a trade name. This can have repercussions on the banking options available to you as well as the types of contract you can sign. Here are some basic limitations to consider, in case you are thinking of applying for a freelance permit.
On a free zone work permit, your work options are slightly more limited
The first rule of thumb to keep in mind is that if you have been given a work permit by a free zone authority, you cannot work with a mainland company unless you are delivering your services digitally. If the nature of your work requires you to deliver the service physically in the mainland, you will need a permit issued by the economic department, and not a free zone.
So, if the type of product or service you provide requires that it be delivered physically, and not digitally, then what are your options?
“A freelancer can deliver services to companies registered in the same free zone, in other free zones within UAE and to any company registered outside the UAE. To deliver a service to a company registered in the mainland, they are required to deliver their service digitally and are not allowed to deliver the service physically in the mainland,” Prendergast added.
You cannot be hired by individuals
Also, it is important to note that under the freelancer permit, you cannot be hired for ‘freelance gigs’ by individuals.
Paul Bryson, Group Commercial Director at Virtuzone, a business setup and company formation specialist in the UAE, said: “Under the freelance work permit, you are only allowed to engage with companies within that free zone, not with the general public. So, if I was having a wedding and I knew a photographer friend, who has a freelance work permit, I could not legally engage him. We can only legally engage with a company, someone who has a commercial trade licence,” Bryson said.
Under the freelance work permit, you are only allowed to engage with companies within that free zone, not with the general public. So, if I was having a wedding and I knew a photographer friend, who has a freelance work permit, I could not legally engage him. We can only legally engage with a company, someone who has a commercial trade licence.
Prendergast further clarified how this, too, highlighted the difference between working on a freelance permit as compared to a business licence.
“A trade licence is given to an entity or a business. Once you have a trade licence, you are allowed to work with individuals or corporates. A freelance work permit, on the other hand, only allows you to work with corporates. So, if a wedding is going to happen at a hotel in Internet City, the freelancer can sign a contract with that hotel, as he or she is authorised to work within the free zone,” Prendergast said.
Freelance permit costs do not include visa costs
It is also important to note that a freelance work permit, while seemingly affordable, only allows you the eligibility to apply for a visa. Once you have applied for a freelance work permit, you can then choose to apply for a visa as well, if you wish to do so.
The costs of the visa, Emirates ID and health insurance are not included and need to be factored in separately, to understand the complete financial cost of living as a freelancer.
Can I apply for a freelance permit on a visit visa?
Yes, you can. In fact, you can even apply for the work permit if you are not currently in the UAE. Once you have submitted your documents for a freelance work permit and the authority approves it, they can then issue an entry permit, with which you can arrive in the UAE. The authority will then be able to assist you with the visa application process.
If you are already in the UAE on a visit visa, you can apply for the work permit and then, similarly, apply for your visa, for which the permit issuing authority will be able to assist you.
A question to ask – is this a sole proprietorship licence?
Some free zone authorities offer a sole proprietorship licence, instead of a freelance work permit, which is slightly different.
This may require you to shift your visa to the free zone’s visa, as is the case with Abu Dhabi’s TwoFour54.
When is a freelancer permit best for you?
So, if the work permit does not include visa costs and if you can only work with corporations and not individuals, when does it make sense to apply for one?
According to the experts who spoke with Gulf News, the permit is ideal for professionals in the media, technology and education industries, who are able to set up an active network of clients and are not necessarily looking to be bogged down by the demands of a full-time work contract.
“It is one of the most popular permits that is issued in the UAE, and is primarily for people who would not like to go for a full-time job, and would like to legally practise what they are good at, as having a trade licence is slightly more expensive,” Prendergast said.
“It is also a great option for anyone living outside the UAE, who wants to come here for a short-term contract, or someone who wants to pursue a side hustle,” he added.
Create a business plan for your permit
While this is only a requirement for certain free zones, it is a good practice to have a business plan in place, before you apply for a freelance permit. The plan should include the contracts you already have in place, as well as the contracts that may be lined up, to provide a clear idea to the authority issuing the permit how you are eligible for it.
What are ‘economic activities’ and how can you choose the ones that suit your needs?
Each economic authority or free zone will have a list of economic activities that are available to freelancers to choose. You can choose one, two or three activities from the list, depending on your requirements.
What are the options available for freelancers?
The following authorities offer freelance work permits, or trade licences in some cases, in the UAE.
NOTE: The cost listed is only for the issuance of the freelance work permit and does not include visa, Emirates ID and health insurance costs.
Abu Dhabi Department of Economic Development
Cost – Dh530
Validity – Two years
Professionals from over 48 economic activities can register for the freelancer permit. There are certain documents, including a No Objection Certificate from your sponsor in certain cases, which you would need to provide to apply for the permit.
To register, call Abu Dhabi Department of Economic Development (ADDED) on 02 815 8888 or register a new account with the Abu Dhabi Business Centre on www.adbc.gov.ae or through the smartphone app - ‘AD Business Centre’, available for Apple and Android devices.
Cost – Dh7,500
Validity – One year
The gofreelance.ae platform provides applicants to apply for a freelance permit for tech, media and education activities and work in free zones operated by TECOM, like Dubai Internet City, Dubai Media City or Dubai Knowledge Park.
You can apply for the permit by visiting the website - https://gofreelance.ae/application/index.php
Abu Dhabi’s twofour54
Cost – Starting from Dh4,500. However, Abu Dhabi’s Media Zone Authority waives the licence costs for the first two years. This means you would only need to pay for the visa- and Emirates ID- related costs.
Validity – One year
Abu Dhabi’s twofour54 is a sole proprietorship licence, and allows applicants to choose from more than 60 media-related categories, from pre-production, production and post-production, to PR, marketing and creative design. To apply, visit https://freelancer.twofour54.com/Soleprop/Login.aspx
Ras Al Khaimah Free Zone authority (RAKEZ)
Cost – Dh6,100
Validity – One year
The permit allows the freelancer to choose from over 90 economic activities in the media, education and technology sector. You can choose a one-year or two-year work permit. To submit all the required documents, visit https://rakez.com/en/Join-Us/Getting-Started
Ajman Free zone
Cost – Dh6,000
Validity – One year
Ajman Free Zone (AFZA) offers Freelance Licence package with over 40 economic activities, where the freelancer can set up a business with 100 per cent ownership and an investor visa valid for three years. You can start your registration process here. https://www.afz.ae/start-your-business
Fujairah Creative City
Cost – Dh11,000
Validity – Two years
Fujairah Creative City offers a freelance business licence, which allows professionals to set up a company under several media, consultancy and education based activities. You do not even need to be a UAE resident to be able to apply for the licence. https://www.creativecity.ae/about/packages