When starting a business in the UAE or Dubai, you will be confronted with two options: to get a trade license or freelance permit. The difference between the two options is immense and what you choose could affect your business venture to establish in the future. A commercial lawyer in Dubai highly recommends that you first understand the difference between a trade license and a freelance permit.
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| Company Formation in UAE |
What is a trade license?
A trade license allows you to conduct import, export, and trading services in the UAE. It allows you to access UAE’s diverse industries.
If you wish to apply for a trade license, you would need to first determine the legal structure and name of your company. Next, decide what business activities your company would undertake. Apply for initial approval and once you get a confirmation, you can then register your company and start working.
If you need help in getting a trade license, you might want to seek the help of legal consultants in Dubai.
What is a freelance permit?
A freelance permit allows you to work as a sole practitioner in the UAE. As the name suggests, working as a freelancer means you would be working alone. Freelancing is a common way of starting a business in the UAE.
Setup cost
Between freelance permit and trade license, the former is expected to be inexpensive. The yearly fee for a freelance permit is Dh7,500. If you need a visa to complement your license, you might need to spend another Dh3,250.
On the other hand, a trade license could cost around 15,000 AED to 50,000 AED depending on your business.
Thus, if you don’t have a huge starting capital, you might as well settle for a freelance permit first.
Number of employees
As mentioned above, a freelance permit allows you to work alone, but it won’t allow you to hire other employees. If you want to go solo, then a freelance permit is the way to go.
However, if you are planning to expand your business, then a trade license is needed. Thankfully, there’s an option where you can upgrade your freelance permit to a trade license in the event that you want to take on staff in the future.
You can speak to business setup consultants in Dubai to know exactly how to accomplish this.
Are you planning to set up a company in the UAE?
- Legal Documents for Every Startup
- Need a lawyer for small business?
- Importance of Hiring a Business Lawyer
- How to Set Up a Business in Dubai
For a quick and easy process of company formation contact or visit us today!
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