The UAE is one of the most sought after business destinations worldwide. It is a land of opportunity and embraces everyone with open arms. So whether you are a freelancer, self-employed or a businessman the country provides numerous options for everyone. One needs to follow certain requirements for business setup in UAE, which can’t be overlooked. Provided here are certain tips which will help you in maximizing opportunities and make this transition smooth.
What are your business options?
There are several ways of doing business in The UAE; however, some of the most popular options available with the entrepreneurs include:
- Sole Proprietorship
- Civil Company
- Limited Liability Company (LLC)
- Foreign Company Branch
- Free Zone Company
- Freelancers
One of the easiest ways of a self-employed person can do business in The UAE is as a freelancer. However he has an option of establishing a business as a sole proprietorship or a civil company, both options allow 100% foreign ownership. A single shareholder is allowed in the case of a sole proprietorship, whereas two or more shareholders are allowed if it’s a civil company.
Getting the right licence, is half the battle won
Broadly speaking licence fall under two main categories namely: A mainland licence and a free zone licence.
If an entrepreneur opts for a mainland licence, it will allow him to trade inside and outside the country without any restriction, but he will require a local partner for getting this license. Whereas if an entrepreneur opts for a free zone licence it will provide him with attractive tax options and 100 per cent ownership, but will him to trade with his free zone jurisdiction.
Free zone a popular option for the freelancer
If you plan to work as a freelancer then you can register in select free zones that offer you a choice of a freelance permit and visa. Some of the popular free zones are Dubai Internet City, Dubai Media City, Dubai Knowledge Park, Fujairah Creative City Free Zone, Ajman Free Zone and Ras Al Khaimah Economic Free Zone.
All one needs to do is to submit an application form to the relevant governing authority and other documents like passport copy, passport-size photo, curriculum vitae (CV) and a No Objection Certificate from your sponsor, if it’s applicable.
Rent an office
There are plenty of office spaces available on rent for a self-employed professional. However, if you plan to work as a freelancer you can opt for co-working spaces for which you can pay every month. It will be both cheaper and convenient for you.
Understanding the local tax system
An entrepreneur must understand the local tax system of the country. A lot of tax incentives, including zero corporate and personal tax are provided to the entrepreneurs who work in The UAE’s free zones. He also gets exemption from import and export duties, as well as from currency restrictions, not only this he can repatriate 100% of his profits.
However with the introduction of VAT by the UAE government, one needs to register if one’s income exceeds 375,000 AED but if one earns between 187,500 AED and 375,000 AED then VAT registration is optional. It is recommended to keep all receipts and records up-to-date to prove this if need be.
If you have any query related to becoming self-employed or starting a business in Dubai or anywhere across the UAE then please feel free to contact us at +971 4 4542366 or mail your query at info(at)flyingcolour(dot)com.
*Please note that this article has been published on 03/17/2021 per the federal policies and updates at the time of writing. For the latest info please talk to our consultant.
