Freelance Permit or Company in Dubai: Liability, Hiring, Tax and Who Will Pay Your Invoice (2026)

A decision guide for solo professionals in Dubai in 2026: the freelance permit routes across TECOM, DDA, DMCC and the cheaper northern zones, how the MOHRE work permit differs, the liability, hiring and visa limits nobody prices in, whether corporate clients will onboard you, the AED 1,000,000 turnover test for individuals versus the AED 375,000 taxable-income band, why a freelance permit can never get the free-zone 0% rate, VAT, Small Business Relief before it ends in 2026, year one and year two costs for both routes, converting later, and whether you can ever sell what you build.
Freelance Permit or Company in Dubai: Liability, Hiring, Tax and Who Will Pay Your Invoice (2026)

Expert-reviewed by BusinessDubai Business Setup Advisors. Written with guidance from licensed UAE company-formation consultants with 10+ years of experience, and fact-checked against official government sources before publishing. Last reviewed August 19, 2026.

Almost every guide frames this as a budget question: a permit is cheap, a company is expensive, so start cheap. That framing is wrong, and it is why we spend so much time unwinding structures that were correct for six months and useless by month nine. The real difference is not cost. It is liability, hiring, and who will pay your invoice.

A freelance permit creates no legal entity, so there is no limited liability and a claim reaches your personal assets. Its visa quota is one, which is you, so you cannot put an employee on it. And a growing number of UAE corporates and government-related buyers will not open a vendor account without a company trade licence and a tax registration number. None of those three appear in a price comparison, and all three decide whether the structure survives.

This is the decision article for the solo professional making the call once: designer, developer, consultant, marketer, photographer, trainer. Since 2013, our team has set up freelance permits and solo companies across Dubai and the northern emirates. This is a guide, not legal or tax advice on your situation.

What is a freelance permit, and what routes exist?

A freelance permit is a licence to trade as an individual in defined professional or service activities, issued by a free zone or a mainland authority, usually carrying a residence visa. It authorises you personally, not a company you own.

TECOM's GoFreelance covers Dubai Media City, Dubai Internet City, Dubai Knowledge Park and Dubai Design District [5]. The permit is market-reported at about AED 7,500 a year, but that is rarely the bill: these clusters generally require an in-cluster flexi or hot desk from about AED 12,000 a year, and the desk carries the visa allocation of roughly one to three [5][6]. The Dubai Development Authority issues a Freelancer or Sole Professional Licence at AED 7,500, plus AED 10 Knowledge Dirham and AED 10 Innovation Dirham per transaction, and the holder trades under their birth name, not a brand name [4].

There is also a mainland route people forget. DET issues professional and freelance licences, and the advantage is reach: it removes the free-zone client restriction and lets you work with any client in the UAE, including government and mainland corporates. Dubai's e-Trader licence at about AED 1,070 a year is a separate, narrower home-business registration, not a substitute for either.

RouteIndicative year one (AED)Notable condition
TECOM GoFreelance (DMC, DIC, DKP, d3)7,500 plus desk from 12,000In-cluster desk required, 1 to 3 visas [5]
DDA freelancer or sole professional licence7,500 plus 10 Knowledge and 10 Innovation Dirham per transactionBirth name only [4]
DMCC FreelanceUAEAbout 27,049 all-inLicence 4,020, JLT desk 16,000, card 1,805, visa 4,224, insurance 1,000 [6]
SHAMS (Sharjah)From about 5,750Cheapest mainstream creative route
RAKEZAbout 8,500 to 12,000Often a 2-year visa cycle
IFZAAbout 12,500 to 28,790Price tracks visa count
MeydanAbout 16,000 to 20,000Fast digital setup
twofour54 (Abu Dhabi)From about 8,000Abu Dhabi media cluster
DET mainland professional licenceQuote-dependentNo free-zone client restriction

All figures are market or agent-reported. No consolidated official fee schedule was retrievable, and packages change several times a year, so treat this as a shape, not a quotation.

How is the MOHRE freelance work permit different?

It is a different instrument, and confusing the two is the most common error we see. The MOHRE freelance work permit lets someone freelance while remaining on an existing sponsorship, usually an employer or a spouse. It authorises the work. It does not by itself grant residency.

It sits under Cabinet Resolution No. 1 of 2022 and Federal Decree-Law No. 33 of 2021 [6]. The applicant must be 18 or over, work in an approved profession, and hold a no-objection certificate if sponsored by an employer, and it cannot be used to compete with that employer or to work during their hours. Fees are cited at about AED 1,200 to 2,500 [6].

That decides the question for one group. If you already hold residency through a job or a spouse and want to invoice side clients lawfully, MOHRE is often the cheapest correct answer, and a free-zone permit is an expensive way to buy residency you already hold.

InstrumentGrants residency?Creates an entity?Typical use
MOHRE freelance work permitNo, layers on a sponsorship [6]NoSponsored resident invoicing side clients
Free-zone or DDA freelance permitYes, usually one visaNoSolo professional needing residency and a licence
Free-zone or mainland companyYes, scales with workspaceYes, a juridical personAnyone hiring or selling to enterprises

Common Mistake: Applying for a free-zone permit while already sponsored by a spouse, and paying for a residence visa and establishment card you do not need. Check the MOHRE route and your NOC position first. It often saves five figures in year one, though it gives you no entity.

What does a freelance permit not give you?

Three things, each a hard wall rather than an inconvenience: no limited liability, no ability to hire, and a visa quota of exactly one. None can be fixed by paying a higher permit fee.

No entity, therefore no limited liability. A company is a juridical person owning its own contracts, debts and risks. A permit is you, licensed. If a client sues over a failed project, a supplier goes unpaid, or a regulator issues a fine, the exposure runs to you personally. For a designer producing artwork that may be acceptable. For a developer touching payment systems, or a consultant advising on regulated matters, it is not.

You cannot hire anyone. Employing staff requires an establishment card tied to a licensed entity with a visa quota, and a permit has no such structure. This ends most freelance permits, because the growth path is one assistant, one junior, one second pair of hands.

One visa, but family sponsorship still works. The permit's quota is one, which is you, and people merge that with sponsoring dependants constantly. As a resident you can sponsor a spouse and children subject to the income test, cited at about AED 4,000 a month, or AED 3,000 with accommodation [7]. So: you can sponsor family, you cannot sponsor staff.

CapabilityFreelance permitCompany
Legal entity and limited liabilityNo, personal assets exposedYes
Employ staffNoYes, quota tied to workspace
Visa quota for the holder11 upward, scales with office
Sponsor spouse and childrenYes, subject to the income test [7]Yes, subject to the income test
Trade under a brand nameRestricted, birth name only on DDA [4]Yes, a registered trade name
Sell or transfer the businessNo, the permit is personalYes, via share transfer

Real Talk: Founders read "no employees" and hear a limit they will grow into later. It arrives at the worst moment, when a project is won and needs a second person next month. Converting takes weeks and usually collides with a live delivery. If a first hire is plausible within eighteen months, price the company now.

Solo consultant working alone at a desk in a Dubai co-working space

Can your clients actually pay you?

Nobody asks this before applying and everybody asks it after losing a contract. A permit is a valid licence, and small businesses, agencies and overseas clients pay against it without difficulty. Large UAE corporates and government-related entities are different, because their vendor onboarding is built around company documents.

The pattern reported consistently across advisory sources is that enterprise procurement wants a trade licence in the entity's name, a tax registration number, sometimes an establishment card, and increasingly a bank account in a matching business name. A permit holder can produce a licence number and a TRN once VAT-registered, but the documents do not map onto a form designed for companies, and the payment name is often a personal account. That mismatch is where onboarding stalls.

Be precise about how strong this claim is. We could not confirm any named UAE agency, ministry or listed corporate publishing a written policy excluding permit holders from its vendor register, so this is not a codified rule and we will not present it as one. It is a reported pattern, and the more procedure-bound your buyer, the more likely a permit stalls onboarding.

Common Mistake: Choosing the structure first and discovering the buyer's requirements second. Email the finance contact at your two largest target clients and ask what they need to register a vendor. If the answer includes a corporate account in the trading name, a permit will not clear it, and the mainland company setup route removes both problems in one step.

When does a freelancer actually pay corporate tax?

Only when business turnover exceeds AED 1,000,000 in a Gregorian calendar year. That is the entry test for a natural person, set by Cabinet Decision No. 49 of 2023, and it is measured on turnover, not profit [1][2]. Below it an individual has no corporate tax obligation from business activity at all.

This is the fact competitor content gets wrong most often, because two numbers are constantly merged. AED 1,000,000 is a turnover test on an individual: am I inside the corporate tax system at all? Cross it and you are a taxable person with registration and filing duties [1][2]. AED 375,000 is a taxable-income threshold answering a different question: what rate applies once I am in? Taxable income up to AED 375,000 is taxed at 0%, the excess at 9%.

QuestionFigureMeasured onWhat it decides
Am I in the corporate tax system as an individual?AED 1,000,000Turnover in a Gregorian calendar year [1][2]Whether you register and file at all
What rate applies once I am in?AED 375,000Taxable income0% below, 9% on the excess

The sequencing matters: the turnover test comes first, the rate band second. A freelancer billing AED 600,000 with AED 400,000 of profit is not a taxable person, so the AED 375,000 figure never becomes relevant. One billing AED 1,200,000 with AED 300,000 of profit is inside the regime and files, but pays 0% because taxable income sits under the band.

Three income types are excluded from the AED 1,000,000 calculation, and this changes who is caught: wage income, personal investment income and real estate investment income [1][2]. Salary, gains on a personal portfolio and rent on a personally held apartment are not business turnover.

Quick Math: A consultant earns AED 220,000 in salary, AED 90,000 in rent on an apartment she owns, and AED 640,000 in consulting fees. Adding those to AED 950,000 and worrying about the threshold is the mistake. Only the AED 640,000 is business turnover, so she is outside corporate tax that year. VAT is where she is far closer to the line.

The rule attaches to the person, not the permit. Holding a permit rather than a company changes nothing about the test or the rate, and the filing mechanics are the same either way, as our guide to how freelancers file tax returns walks through.

Why can a freelance permit never get the free-zone 0% rate?

Because Qualifying Free Zone Person status is available only to juridical persons, and a permit holder is a natural person. This is not about income level, activity or which zone issued the permit. A natural person is structurally outside the regime that produces the 0% rate.

The chain is short. Article 18 of the Corporate Tax Law defines a Qualifying Free Zone Person, Cabinet Decision No. 100 of 2023 sets the qualifying-income conditions, and Ministerial Decision No. 229 of 2025 sets the Qualifying and Excluded Activity lists [3]. The regime applies to Free Zone Persons that are juridical persons, incorporated entities such as an FZ-LLC or FZE. Someone holding a permit in DMCC, Dubai Internet City or SHAMS has a free-zone licence but has incorporated nothing, so no juridical person exists to hold the status. They are taxed under the natural-person rules instead: outside the system below AED 1,000,000 of turnover, above it at 0% up to AED 375,000 of taxable income and 9% beyond [1][2].

Real Talk: Some free-zone freelance pages borrow language from the zone's corporate 0% messaging, and a reader reasonably concludes the permit carries the same outcome. It does not, and it cannot. If an adviser tells you a freelance permit gets QFZP status or a 0% rate, that is a plain error about who the regime applies to. Ask them to point to the provision, then read Article 18 and Ministerial Decision No. 229 of 2025 [3].

One second-order point. Incorporating in a free zone gets you into the QFZP regime but not to 0%, because Qualifying Income is narrowly defined and most professional service revenue from mainland or overseas clients is non-qualifying, as our guide to free zone vs mainland for a software company documents. If 0% is your reason for incorporating, the honest answer is 9% either way.

When must you register for VAT?

Once taxable supplies exceed AED 375,000 over a rolling 12 months, and this applies identically to a permit holder and a company. VAT does not care about your structure, only your supplies, and it is the threshold most solo professionals cross first.

You have 30 days to register once the threshold is passed, with an AED 10,000 late-registration penalty risk. Voluntary registration starts at AED 187,500, worth taking early if you carry input VAT on equipment, software and professional fees. Once registered you charge 5% on UAE supplies, file returns and hold a TRN. An export of services to a recipient outside the GCC implementing states can be zero-rated, which beats being outside the system because input VAT stays recoverable.

Two traps. The VAT threshold and the corporate tax band share the figure AED 375,000 and nothing else: one is a rolling test on supplies, the other a taxable-income band. And zero-rated supplies still count toward the threshold, which catches freelancers who assume overseas billing keeps them below the line.

Should you use Small Business Relief before it ends?

Yes if you are eligible and inside the corporate tax system, and the window is closing. Small Business Relief lets a resident person with revenue at or below AED 3,000,000 elect to be treated as having no taxable income, but only for tax periods ending on or before 31 December 2029 [8].

It is an election, made actively on EmaraTax for each period, not an automatic status, and it does not remove your duty to register and file. Every year we see clients who assumed it attached itself to their file. For a permit holder it only matters after you cross the AED 1,000,000 turnover test, since below that there is nothing to elect against [1][2], so the useful band is narrow: turnover between AED 1,000,000 and AED 3,000,000.

Pro Tip: Writing in 2026, for anyone on a calendar-year period this is the last eligible year, and no extension has been announced [8]. Plan the following year assuming it is gone, and model it at the full 9% above AED 375,000. Talk to a setup expert→

What does each route cost in year one and year two?

Year one favours the permit clearly, and the gap narrows in year two more than the marketing suggests. Most comparison pages stop at setup cost, which is the wrong place to stop.

StructureYear one indicative (AED)Year two direction
MOHRE freelance work permit1,200 to 2,500, no residency [6]Renews cheaply, never confers an entity
Cheapest permit with a visa (SHAMS, RAKEZ)5,750 to 12,000Cheapest to hold, 2-year visa cycles renew less often
Dubai permit with an in-cluster desk (TECOM, DMCC)19,500 to 27,049 [5][6]The desk, not the permit, is the recurring line
Free-zone company, solo15,000 to 30,000Similar shape to a Dubai permit with a desk
Dubai mainland company40,000 upwardEjari dominates and tracks the rental market

Year two changes the comparison, and we describe the direction rather than invent numbers, because published renewal schedules are thin and vary by zone.

Cost elementFreelance permit, year twoCompany, year two
Licence or permit renewalAnnual, similar to year oneAnnual, similar to year one
WorkspaceThe desk renews and is the larger lineOffice renews, mainland Ejari dominates
One-off setup costsFall away, establishment card renewsFall away, establishment card renews
Accounting and filingRises once VAT-registered or past AED 1mFrom the start, some zones require an audit
DirectionCheaper, but the gap narrowsDearer, but it buys capacity you can use

The permit saves real money in year one and moderate money after, and the saving is largest exactly when your revenue is smallest. Compare the incorporated routes on our free zone company setup page before assuming a company is out of reach, because a solo free-zone licence with a flexi-desk sits closer to a premium Dubai permit than most expect.

Based on our experience, the clients who regret the permit are never the ones who found it expensive. They found it cheap, stayed on it for two renewals, then rebuilt mid-project because a hire or a contract forced it. The ones who are happy treated it as a twelve to twenty-four month validation period with a known exit.

Business licence paperwork, invoices and a laptop on a desk in a Dubai office

Which activities can you not do on a freelance permit?

Service and professional work is in scope, and anything touching physical goods or a regulated profession is out. Permits cover activities an individual performs personally: media, technology, education, consulting, design and training.

ActivityAllowed on a permitNote
Design, branding, content and media productionYesCore scope of the media clusters [5]
Software development, IT and technical consultingYesCommon on TECOM and DMCC routes
Management, marketing and business consultingYesCheck activity wording with the issuer
Training and coachingYesSome training needs education-authority approval
Photography and videographyYesShoot permits are a separate layer
Trading goods, retail, import and exportNoRequires a commercial trade licence
Medicine, law, pharmacy, licensed financial adviceNoRegulated professions, own authorities
Anything needing employees to deliverNoNo hiring capability on a permit

Sector rules sit on top of the permit rather than inside it. If you shoot commercially, our guide to setting up a photography business covers the shoot-permit layer. If your income comes from platforms and brand deals, the content creator and YouTuber guide covers that model, and paid promotional posting needs the influencer licence permission. Confirm your activity code before you pay, because a permit issued for the wrong activity is the most expensive AED 7,500 in this article.

Can you open a corporate bank account?

Sometimes, and it is harder than with a company. This is bank-dependent rather than rule-based, and it is the most common frustration permit holders report in their first quarter.

Traditional UAE banks assess economic substance, and a permit presents thinly: no incorporation documents, no shareholder register, no memorandum of association, often no office. Some banks will onboard permit holders from well-regarded zones with a clean file and a residence visa, but rejections and long waits are common enough that you should not assume access.

Most freelancers end up on a digital or neobank business account, which onboards faster and tolerates the structure better, at the cost of narrower trade finance and the occasional procurement form that expects a traditional bank. A company licence does not guarantee a traditional account either, but it improves the file, which is why our guide to opening a corporate bank account is worth reading before you choose, not after a third rejection.

What ongoing compliance does each route carry?

More than the permit's simplicity suggests, and the gap between routes is smaller here than anywhere else. Both renew a licence annually, both renew a residence visa, both register for VAT at the same threshold, and both file returns once registered.

A permit holder's recurring stack is permit and desk renewal, establishment card and visa renewal, health insurance, VAT registration and returns past AED 375,000 of taxable supplies, and corporate tax registration and filing past AED 1,000,000 of turnover [1][2]. A company adds an establishment card with a real visa quota, sometimes an audited financial statement, payroll under the Wages Protection System once staff are hired, and corporate tax registration from the outset. Renewals, tax registration, bookkeeping and annual filings are the recurring work our post-setup services team handles on either route.

A permit is simpler to obtain, not simpler to run. If you chose it expecting to escape bookkeeping, that saving disappears at the first threshold you cross, which is why we set the accounting up from month one and keep registrations, elections and renewals inside the same post-setup services engagement.

How do you convert to a company later?

You can, and it is a well-worn process rather than an unwinding. The standard pattern is to establish the company alongside the live permit or immediately after cancelling it, then move your residence visa across.

The parallel route sets up the company while the permit is live, keeps you invoicing without a gap, then cancels the permit once the new licence and establishment card are issued. It costs more for a short overlap and is safer if you have live contracts. The sequential route cancels first, which is cheaper but creates a window with no valid licence, and that window is exactly when a client wants an invoice. Most free zones require about 30 days' notice to cancel a permit, which founders forget when promising a company invoice by month end.

StepWhat happensPractical note
Choose the structureFree zone or mainland, sized to the hiring planBuy the quota you will need, not today's
IncorporateNew licence, establishment card, bankRun in parallel if you have live contracts
Move the residence visaTransfer, or cancel and reapplyAbout AED 1,000 to 2,000
Cancel the permitNotice, clearance, final settlementMost zones want about 30 days' notice
Re-paper client contractsNovate or reissue in the company nameDo this before the first company invoice

Pro Tip: The step everyone skips is re-papering contracts. Existing agreements name you personally, so invoicing from the company against a contract you signed as an individual creates exactly the mismatch procurement and auditors flag. If you know you will convert, the cleaner answer is often to skip the permit, and our free zone company setup page sets out what a solo licence costs. Talk to a setup expert→

Can you ever sell what you build?

Not on a freelance permit. This is the exit question, almost never raised in comparison content, and it is a real difference in what each route leaves behind after five years of work.

A permit is personal to the holder and not transferable. It authorises you to work, so there is nothing to sell, assign or inherit. Build a client book over five years and a buyer cannot acquire the vehicle; at best they hire you or buy assets. A company is different in kind, because shares are property that can be sold, transferred, gifted or inherited. Federal Decree-Law No. 20 of 2025 amended the Commercial Companies Law to add multiple share classes and clearer drag-along, tag-along and succession mechanics, the tools a small company needs to bring in a partner or exit cleanly.

Exit questionFreelance permitCompany
Can the vehicle be sold?No, the permit is personalYes, via share transfer
Can you take on a partner?NoYes, share issue or transfer
Share classes to keep controlNot applicableYes, under Federal Decree-Law No. 20 of 2025
Drag-along and tag-along protectionNot applicableAvailable under the 2025 amendments
On death or incapacityThe permit endsShares pass under succession mechanics
What a buyer acquiresYour time, and some assetsThe entity, its contracts and its goodwill

If you are building something you intend to sell, or that should survive you, the permit is the wrong container however well the cost comparison reads.

How big is the UAE freelance market really?

Growing quickly, and less measurable than the internet suggests. Several figures circulating in setup-agency content trace to no official source, and we would rather tell you what is not published than repeat a number that looks authoritative.

What is evidenced is genuine. Freelance registrations across MENA rose 142% from 2022 to 2023 according to reporting in The National, and Abu Dhabi's ADDED freelancer licence expanded from 48 approved activities in 2020 to 100 by August 2024, a signal that regulators are widening the work an individual can be licensed to do.

What does not exist is a total. No official count of freelance permits issued in Dubai or the UAE for 2025 or 2026 is published by MOHRE, DET or the Dubai Statistics Center that we could locate. Two claims recur in agency content, that freelancers are over 10% of the workforce and that the segment grows at 17% a year, and neither traces to an official body.

So which should you actually pick?

It comes down to three things and almost nothing else: whether you will hire, who your buyers are, and whether liability exposure is material. Cost belongs in the decision, but fourth.

Your situationRouteWhy
Solo consultant under AED 1,000,000, small and overseas clientsFreelance permitCheapest route with residency, outside corporate tax below the turnover test [1][2]
Designer or developer planning a first hire within 18 monthsCompanyA permit cannot carry an employee
Agency-style operator targeting enterprise or government buyersMainland companyOnboarding expects a company licence, TRN and matching account
Already on a spouse or employment visa, invoicing side clientsMOHRE work permitAuthorisation to work without paying twice for residency [6]
Work carrying real professional liability exposureCompanyA permit puts personal assets behind every claim
Building something you intend to sell or pass onCompanyOnly shares are transferable, under the 2025 amendments
Testing a market for 12 to 24 months with a known exitFreelance permit, deliberatelyFine as validation if the conversion is planned
Chasing the free-zone 0% rateNeither, on that basisA natural person cannot be a QFZP at all [3]

Real Talk: The worst version of this decision is the founder who picks the permit on price, wins a large corporate client in month seven, cannot get onto their vendor system, cannot hire the person the project needs, and cannot convert fast enough to save either. All three were foreseeable from one question: who will pay my invoices, and what will they ask for? If the answer is onshore, the DET route on our mainland company setup page removes the client restriction and most procurement friction.

Real Client Stories

The developer who could not be onboarded. A backend developer on a Dubai media-cluster permit won a project with a large UAE group in his second quarter. Their vendor system needed a trade licence in a company name, a TRN and a corporate account in the matching name, and his personal account stopped the registration. We ran a parallel free-zone incorporation, re-papered the contract, then cancelled the permit. He kept the client and lost six weeks of billing to a problem visible before he applied.

The consultant who counted AED 310,000 that was never business income. A management consultant on a spouse visa was about to register for corporate tax because her combined income looked close to AED 1,000,000. Her figures included salary from a part-time role and rent from an apartment she owns personally, neither of which is business turnover for the natural-person test. Her business turnover was well under the threshold, so no registration was required. She did need to look hard at VAT.

The designer who was promised 0%. A brand designer chose one free-zone permit over a cheaper one because a sales conversation implied it carried the zone's 0% treatment. A natural person cannot hold Qualifying Free Zone Person status at all, so that was never available on any permit from any zone [3]. She was under the turnover test anyway, so her tax position was unchanged, but she paid a premium for a benefit that did not exist.

Make this call on the right facts

The comparison that matters is not AED 7,500 against AED 20,000. It is whether you will hire, whether your buyers will onboard you, whether a claim can reach your personal assets, and whether you can ever sell what you build. The tax picture is simpler than the internet claims: below AED 1,000,000 of turnover a natural person is outside corporate tax entirely, above it the 0% band runs to AED 375,000 of taxable income, and the free-zone 0% regime is closed to individuals [1][2][3].

Since 2013, BusinessDubai.ae has completed 700+ company registrations across the UAE, including freelance permits and solo structures for consultants, developers, designers and creative professionals. We will check whether a MOHRE permit solves your case for a fraction of the cost, size the permit or company against your hiring plan, test your clients' onboarding requirements, and give you an itemised comparison. Talk to a setup expert→

Frequently Asked Questions

What is a freelance permit in Dubai?

A licence to work as an individual in defined professional or service activities, issued by a free zone or mainland authority, usually with a residence visa. It licenses you personally and creates no company [4][5].

How much does a freelance permit cost in Dubai?

Market-reported figures put TECOM GoFreelance at about AED 7,500 plus a desk from AED 12,000, the DDA licence at AED 7,500, DMCC FreelanceUAE at about AED 27,049 all-in, and SHAMS from AED 5,750 [4][5][6].

Does a freelance permit give me limited liability?

No. With no separate entity there is no corporate veil, so a claim, judgment or fine arising from your work reaches your personal accounts and assets directly.

Can I hire employees on a freelance permit?

No. Employing staff requires an establishment card tied to a licensed entity with a visa quota, and a permit provides no such structure. A first hire means a company, and converting takes weeks.

How many visas does a freelance permit give me?

One, which is yours, and the quota does not extend to staff. Cluster desks are sometimes described as covering one to three visas, but that allocation belongs to the workspace product [5].

Can I sponsor my wife and children on a freelance permit?

Yes. Family sponsorship is a resident's right, separate from the business quota, subject to the income test cited at about AED 4,000 a month, or AED 3,000 with accommodation [7].

What is the MOHRE freelance work permit?

A permit authorising freelance work while you remain on an existing sponsorship such as an employer or spouse. It sits under Cabinet Resolution No. 1 of 2022 and Federal Decree-Law No. 33 of 2021, with fees cited at about AED 1,200 to 2,500 [6].

Does the MOHRE freelance permit give me a residence visa?

No, and this is the key distinction. It is an authorisation to work layered on a sponsorship you already hold. With no UAE residency you would still need a sponsor or a route that grants a visa [6].

Do I need an NOC for a MOHRE freelance permit?

Yes if you are sponsored by an employer. You must be 18 or over and work in an approved profession, and the permit cannot be used to compete with your employer or to work during their hours [6].

Do freelancers in Dubai pay corporate tax?

Only above AED 1,000,000 of business turnover in a Gregorian calendar year. Cabinet Decision No. 49 of 2023 makes that the entry test for a natural person, so below it there is no obligation [1][2].

Is the AED 1,000,000 threshold the same as AED 375,000?

No, and confusing them is the commonest error in freelancer tax content. AED 1,000,000 is a turnover test deciding whether an individual is in the corporate tax system. AED 375,000 is a taxable-income threshold deciding the rate once in [1][2].

Does salary count toward the AED 1 million freelance threshold?

No. Wage income, personal investment income and real estate investment income are excluded from the natural-person calculation. Only business turnover counts [1][2].

Can a freelance permit holder get the free-zone 0% corporate tax rate?

No, in any zone, at any income level, for any activity. Qualifying Free Zone Person status is available only to juridical persons, and a permit holder has incorporated nothing [3].

Why can a natural person not be a Qualifying Free Zone Person?

Because the regime, under Article 18 of the Corporate Tax Law with Cabinet Decision No. 100 of 2023 and Ministerial Decision No. 229 of 2025, applies to Free Zone Persons that are juridical persons. A permit is a licence, not an entity [3].

Do freelancers need to register for VAT in the UAE?

Yes, once taxable supplies exceed AED 375,000 over a rolling 12 months. You have 30 days to register and risk an AED 10,000 late-registration penalty. Voluntary registration starts at AED 187,500, identically for permits and companies.

Can a freelancer zero-rate VAT on overseas clients?

Often yes. An export of services to a recipient outside the GCC implementing states can be zero-rated, which beats exemption because input VAT stays recoverable. Zero-rated supplies still count toward the threshold.

Is the VAT threshold the same as the corporate tax band?

They share the figure AED 375,000 and nothing else. One is a rolling 12-month test on taxable supplies triggering VAT registration. The other is a taxable-income band inside corporate tax.

What is Small Business Relief and can a freelancer use it?

It lets a resident person with revenue at or below AED 3,000,000 elect to be treated as having no taxable income. For a permit holder it only matters above the AED 1,000,000 turnover test [1][8].

When does Small Business Relief end?

It is available only for tax periods ending on or before 31 December 2029, and no extension has been announced [8]. On a calendar-year period, 2029 is now the last eligible year.

Do I have to elect Small Business Relief, or is it automatic?

You must elect it actively on EmaraTax for each tax period, within your return. It is not applied automatically, and it does not remove your duty to register and file [8].

Which is cheaper in year two, a freelance permit or a company?

The permit stays cheaper, but the gap narrows because one-off setup costs fall away on both sides and workspace becomes the dominant line. Published renewal schedules are thin, so confirm with your issuer.

What activities are not allowed on a freelance permit?

Trading physical goods, retail, import and export, and regulated professions such as medicine, law, pharmacy and licensed financial advice. Permits cover service and professional work only.

Can I open a corporate bank account with a freelance permit?

Sometimes, and it is bank-dependent rather than guaranteed. Traditional banks assess economic substance and a permit presents thinly, so many freelancers use digital or neobank products instead.

Will corporate clients accept a freelance permit?

Smaller and overseas clients generally will. Large UAE corporates and government-related buyers often want a company trade licence, a TRN and a matching corporate account. No published policy excluding permit holders could be confirmed, so treat it as a reported pattern.

Do I need a TRN to invoice a UAE company?

Only if you are VAT-registered, which is mandatory above AED 375,000 of taxable supplies over a rolling 12 months. Procurement systems often request a TRN anyway, which is not the same as the law requiring one.

How do I convert a freelance permit into a company?

Set up the company alongside the live permit or after cancelling it, then transfer your residence visa or cancel and reapply. Transfer is cited at about AED 1,000 to 2,000, and most zones want about 30 days' notice.

Can I sell my freelance permit?

No. The permit is personal to the holder and not transferable, so a buyer has nothing to acquire. Company shares can be sold, and Federal Decree-Law No. 20 of 2025 added share classes and clearer drag-along, tag-along and succession mechanics.

Which should a solo consultant in Dubai choose in 2026?

A freelance permit if you are under AED 1,000,000 of turnover, will not hire, and sell to small or overseas clients. A company if you plan a hire, target enterprise or government buyers, carry liability exposure, or want to sell later.

References

[1] UAE Cabinet Decision No. 49 of 2023: the AED 1,000,000 turnover test for natural persons and the excluded wage, personal investment and real estate income. Cabinet Decision No. 49 of 2023 (PDF)

[2] PwC Middle East, analysis of Cabinet Decision No. 49 of 2023 for natural persons. PwC analysis (PDF)

[3] UAE Ministry of Finance, Ministerial Decision No. 229 of 2025 on Qualifying and Excluded Activities, applying the Qualifying Free Zone Person regime to juridical persons. Ministerial Decision No. 229 of 2025 (PDF)

[4] Dubai Development Authority, freelancer and sole professional licence: AED 7,500 plus the Knowledge and Innovation Dirham, and the birth-name condition. DDA freelancer licence

[5] TECOM GoFreelance, permits across Dubai Media City, Dubai Internet City, Dubai Knowledge Park and Dubai Design District. GoFreelance

[6] Fragomen, freelance licence in the UAE in 2025: MOHRE work permit conditions, zone pricing and permit routes. Fragomen insight

[7] Khaleej Times, UAE freelance visa rules, family sponsorship and the income test. Khaleej Times explainer

[8] UAE Ministry of Finance, decision on Small Business Relief: revenue at or below AED 3,000,000, tax periods ending on or before 31 December 2029. Ministry of Finance announcement

Get started with BusinessDubai

Ready to set up your business in Dubai?

From trade licence and visas to corporate banking and tax registration, our specialists handle your entire company setup end to end — with transparent, fixed fees and no surprises. Book a free, no-obligation consultation and get a clear plan and quote today.

Trusted since 2013 · 100% foreign ownership · Fast, fixed-fee setup
Business setup consultants in Dubai ready to help you start your company