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Which is the Best: Trade License vs. Freelance Permit

By Sakshi Srivastava - 15 Apr 2022 Last Updated: 26 Apr 2022
Which is the Best: Trade License vs. Freelance Permit

Working as a professional in Dubai necessitates the acquisition of a trade license or a freelance permit. With Dubai's emergence as one of the world's fastest-growing business hubs, the number of freelancers and entrepreneurs has increased in recent years. This wave of modernization and globalization in Dubai also resulted in the establishment of various business zones – the mainland zone and the Freezone.

In the following discussion, we will go over all of the important information you need to know about the application process for these licenses as well as the various benefits they provide. We'll also go over some other important details about both documents that you should be aware of.

So, read carefully to ensure you make the best decision for your profession.

What is Freelance permit?

A freelance work permit Dubai identifies you as a self-employed or freelancer. So, if you are a sole practitioner running a business in your own name, you must apply for this permit. If your business is primarily online and does not require any employees, such as content writing, then a freelance work permit is ideal for you.

However, when your earnings reach the taxation limit or you begin working for large corporations that require a TRN, or Tax Registration Number, you will run into problems. This is due to the fact that TRN does not apply to freelancers. Additionally, freelancers are not permitted to open a corporate bank account in Dubai.

Why should you obtain a Freelance Permit in the Dubai?

Obtaining a freelance license in Dubai is relatively simple, with only a few documents and processes required. While the freelance permits may become restrictive if you start earning a lot of money and your income becomes taxable, you may need a trade license until then.

Furthermore, the Dubai government provides a number of lucrative packages for freelance work permits. If you want to work as a freelancer in Dubai without a freelance work permit, you must have a resident visa as well as a work permit. You should also keep in mind that you must renew your freelance permit on an annual basis, and the cost of this renewal varies by region.

Aside from this fee, you will need to provide supporting documentation in order to obtain a freelance work permit in Dubai. Some of the most common are listed below, but depending on the type of work you do, you may also need some additional documents.

Documents required obtaining a Freelance Work Permit in Dubai:

  • Business Plan
  • Copy of the current sponsor's NOC
  • Degree transcripts or a CV profile (attested as per the standard procedure for international usage)
  • Passport Copy

Why not apply for a Freelance Permit?

Below are the Several reason for not applying in Freelance Permit

  • As soon as a freelance permit is issued to a person, you will never be able to hire any kind of employee.
  • Only a few industries, namely media, fashion, and education, are eligible for a freelance permit.
  • As a freelancer, you will not be issued a TRN by the Federal Tax Authority. As a result, you may never be able to work with large corporate setups.

What exactly is a Trade License?

A Trade License enables a business to engage in various trading activities, hire employees, and obtain various licenses and numbers related to taxation and various types of trading. In the UAE, traders can work in one or more industries as well as engage in major trading activities such as import and export. They are not restricted to a few categories, as freelancers are.

A general trade license is required if you want to work as a wholesaler. However, regulated products such as beverages, frozen goods, and pharmaceuticals, among others, necessitate special approval from the authorities. Overall, one of the advantages of trade license is the ability to operate locally, nationally, and internationally.

Why should you obtain a Trade License in Dubai?

Dubai trade license allows you to operate more freely and does not stifle your growth. Employees can be hired whenever you need them. You can collaborate with any type of business organization, including large corporations. If you work as a freelancer, you must deregister as a freelancer and apply for a trade license in Dubai once your business grows. So, in a nutshell, the trade license shortens the process.

A trade license allows you to conduct business across the country and even internationally. You can trade within the free zones, on the mainland, and with any other business organization.

Your credibility as a businessman grows, and you become more trustworthy. This also demonstrates that you have a refined business structure, which strengthens your case as a vendor when working with large organizations.

How to Acquire a Trade License in Dubai?

Following are the steps to acquire Trade License in Dubai:

  • Decide on a business domain and name.
  • Outline the company's operations (10 activities are allowed on one license)
  • Submit the applications, pay the fee, and complete any additional requirements, such as attestations.
  • Determine a business location and obtain a lease contract.
  • Finally, submit the application to the Department of Economic Development (DED)
  • Pay the various fees and obtain the business license.

Conclusion

A trade license is a better option if you intend to launch a large setup with multiple employees and more functionality. A freelance work permit, on the other hand, is better suited if you lack proper vision, funds, and are still unsure of the type of workforce you require. We hope this discussion is beneficial to all of our readers. Please contact Dhanguard to get your Trade License or Freelancer Permit.

Dhanguard provides the business setup and company formation services in Dubai, UAE with the guidance of our professional team of consultants. Faster and hassle-free company setup in Mainland and Freezone in UAE.

Dhanguard provides faster and hassle-free Trade License with minimum paper work. With the guidance of our professional team of consultants you will get General trading license, Freelance license, Etrader license, Event Management License, Travel Agency license in Mainland and Freezone in UAE.

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