Setting up as a freelancer in the UAE

24 May 2017 Category :
A freelancer working in Dubai

For thousands of people it’s a long-held dream – throw off the shackles of your nine-to-five and become your own boss. For many, it’s more than a dream. Just last year, Forbes reported that freelancers now make up approximately 35% of the US workforce, while in the UK freelancers contributed a staggering GBP 119bn to the economy in 2016.

Here in the UAE figures are harder to come by, but it’s a similar picture. Dubai’s largest freelance marketplace Nabbesh saw its membership double to 73,000 between 2013 and 2014, rising to over 90,000 by 2016.

Maybe you’re just off the plane with a great plan. Or you’ve been working out here for a while but want to start a lucrative new sideline in your own time. Or perhaps you’re ready to dive right in and go it alone full-time. Whichever applies to you, there are some things to consider before you make the leap. Like any labour market, the UAE has some guidelines and quirks, and getting up to speed on them will save you time, money and frustration in the long run.

So, let’s take a look at what you need to know. 

Freelancing in the UAE

Freelancing means working for yourself, as an independent contractor, and is completely legal in the UAE as long as you hold the necessary licence. You’re establishing yourself as a one-person company, working as an individual but doing business in your own name, which is slightly different to establishing a startup company. That said, many entrepreneurs start out freelancing and upgrade to a company setup once they get established, which is easy to do in the Emirates.

Freelancer at work in UAE

Freelancing means working for yourself, as an independent contractor, and is completely legal in the UAE as long as you hold the necessary licence.

It goes without saying that you need the right skills, passion, drive and business savvy to make a success of your plan. Freelancing can be stressful and lonely at the start, and isn’t for everyone. You need a strong idea and the determination to start getting clients on board and reeling in business.

But if you have what it takes, and prepare well, the UAE is a great choice. Dubai is a hotbed for freelancers just now, with an unprecedented number of businesses making use of freelance services across a range of industries. Even back in 2013 Bayt.com was reporting that over half of the region’s companies were outsourcing work to freelancers. This trend has continued, with Nabbesh observing a 40% increase in the hire of freelancers in a single quarter at the start of 2016.

What’s more, your decision to go it alone is actively supported by the UAE government, which has taken a number of steps to make setting up alone a viable choice for entrepreneurs in the country. These include business support forums and accelerators for startups and solo-entrepreneurs, and positive encouragement for businesses that want to use freelance services. A big step was the introduction in 2014 of the entrepreneur visa, which is available whether you’re offering your own services or establishing a new company. Before this, visa restrictions required foreign nationals to provide a definite offer of employment before entering the country to work. This is something many freelancers can’t do, either because they don’t yet have a pipeline of client work, or for other reasons such as their expat tax status. So, the entrepreneur visa has been a great boost for freelancing in the Emirates.

And more and more free zones are starting to offer freelance permits. This not only cuts down on admin – you can apply directly to the free zone which will then take care of your business licence and registration for you – but also gives the budding freelancer access to great networking opportunities and other benefits. Most freelance permit packages allow freelancers to base themselves in the free zone, either renting office space or using a flexi-desk, surrounded by other businesses who themselves might need the freelancer’s services.

Business registration and visa applications come at a cost, so you’ll need a financial buffer until you’re up and running. The cost of living in the UAE – particularly Dubai – is famously high, so you’ll want to be confident your freelance business can support you in the long run. But provided you have a good plan, you’ve researched your potential clients and you’re armed with the right skills and market knowledge – and provided you don’t overstretch yourself in the early stages – you’ve got every chance of making a success of it. 

So how do you get started? Here’s what you need to know.

1. Quick easy setup: You can apply for your freelance permit in two ways: either direct to the Department of Economic Development (DED), or from one of the country’s numerous free zones. While neither route is especially difficult, the free zone option is probably easier, and comes with other benefits such as 0% corporate and personal tax and 100% repatriation of profits. The application process is simple: your company name is simply your own name, and your licence is usually issued in 7-10 days.

2. Wide variety: One of the most enticing things about freelancing in the UAE is the wide range of fields in which you are allowed to operate. Freelance permits are issued for almost all DED-listed business activities, but if you wish to obtain a freelance permit from a free zone, your business activity must be related to the free zone’s area of focus. For instance if you want to set up in Dubai Media City Free Zone, you need to be working in the media or a related industry.

Freelance permits are issued for almost all DED-listed business activities, but if you wish to obtain a freelance permit from a free zone, your business activity must be related to the free zone’s area of focus.

3. No need for office space: Freelancing gives you total freedom. Not only can you be your own boss and choose when you work and for whom, but you don’t need to be tied to an office. You can work from home if you wish, or rent a desk or office facilities from one of the free zones.

4. No NOC required from local sponsor: Another factor behind the growing popularity of freelancing in the Emirates is that it’s possible to do so without obtaining a No Objection Certificate (NOC) from a local sponsor. The majority of free zones don’t require an NOC, whether you’ve just arrived in the UAE or have been here for some time.

5. Sponsorship of dependants: Freelancing may not always be a steady job but that doesn’t mean you can’t have family with you. Once your own visa is secure, providing you meet the salary requirements, you’ll be able to sponsor family members too (or employees if you’re setting up a company). In general, though, it’s easier for a man to sponsor dependants than for a woman, unless she’s working in certain defined professions (such as the medical sector) in addition to the minimum salary restrictions.

6. No auditing or book-keeping: Few of us like paperwork, especially if we have to do it all ourselves. Fortunately, freelancers in the UAE are not always required to submit official accounts or be subject to an audit – the ideal setup for the busy entrepreneur.

7. Corporate bank account: It’s not just the licence and visa applications which are straightforward: getting your corporate bank account organised is also a breeze. The UAE is home to plenty of large, reputable financial institutions – both local banks and global names – that readily welcome freelancers. Plus, if you set up in a free zone, you’ll often be put in touch with the most relevant bank to your needs as part of the standard setup service.

8. Upgrading to full company setup: There are some who never want to give up freelancing, and will only ever take on as much work as they can manage themselves. Others see freelancing as the first step on the ladder to expanding their business and setting up a company. The good news is that it is easy to upgrade your freelance business licence to a company licence. And there are many benefits to upgrading, including the fact that you can apply for multiple visas. Also, many free zones allow you to set up a company without the need for upfront share capital. 

The freedom of freelancing

Freelancing can be a lucrative and rewarding path, but it’s not easy. Sure, being your own boss is great. You’re not answerable to anyone and you can work how you want, when you want. But that’s also the challenge: the buck stops with you. You need to be highly focused, self-motivated and driven: there’s no one else cracking the whip to make sure you deliver.

You need to be highly focused, self-motivated and driven: there’s no one else cracking the whip to make sure you deliver.

And you need to wear many hats. Sure, the core of your business will be your area of expertise – say, technology, writing, accountancy, or design – but you’re also likely to be a one-person marketing, sales, accounts, and IT department. And, since you can’t do everything by yourself, you’ll need first-class networking and communication skills, to ensure you’re always coordinating with the right people at the right time to get things done.

If you think this sounds like you, then what are you waiting for? Discover the joys and freedoms of freelancing, and realise the dream of being your own boss.

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About the author: Neil Petch, Chairman at VirtuGroup
About the author: Neil Petch, Chairman at VirtuGroup

With a history of business successes, Neil Petch is well known in the UAE and beyond as a visionary entrepreneur with a passion for helping others establish and grow their own businesses. Neil founded Virtuzone in 2009 and quickly established it as the region’s leading company formation expert, before launching VirtuGroup, a holding company that has a wider mandate of supporting startups from establishment; to successful market entry; and all the way through to exit.