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Becoming a freelancer in the UAE has become a popular option for many professionals seeking to take control of their careers and earn a higher income. With its strategic location, thriving economy, and attractive tax laws, the UAE has established itself as one of the top destinations for individuals looking to work independently.

Located in the heart of the Middle East, the UAE is known for its bustling cities, stunning architecture, and luxurious lifestyle. But beyond its glitz and glamour lies a business-friendly environment that offers unique opportunities for freelancers. The country boasts a diverse economy with strong sectors such as oil and gas, finance, tourism, construction, and technology. This diversity opens up a wide range of job opportunities for freelancers in various industries.

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Key takeaways

  • If individuals continue to receive salaried income in the UK, they can still request a freelance visa in the UAE. Having the advantage to reclaim UK tax, as a UAE tax resident.
  • Small business relief rates available until 2026, so the 9% corporate tax rate doesn’t apply at first.
  • Get access to an Emirates ID, providing you with flexibility in the UAE to request varied services from the authorities; such as opening a bank account.

Legal Requirements for Freelancer Visa in the UAE

To become a freelancer in the UAE, there are several requirements that must be met:

Trade licence

Having a trade licence is a legal requirement for doing business in the UAE. According to the Department of Economic Development (DED) in Dubai, all businesses, including freelancers, must have a valid trade licence to operate legally. This includes obtaining necessary permits and permissions, registering with relevant authorities, and following local laws and regulations.

Secondly, having a trade licence provides credibility to freelancers and their work. It shows potential clients that they are registered with the government and have met certain standards to conduct business. This can help build trust and attract more clients.

Moreover, having a trade licence allows freelancers to get freelance permits and operate freely within the country without any restrictions. Without a trade licence, freelancers may face penalties or even risk deportation if caught working illegally.

Another important reason is that having a trade licence allows freelancers to access certain benefits and services offered by the government. For example, they can open bank accounts, apply for loans or credit cards, obtain visas for their family members, and access healthcare facilities.

Valid passport

A valid passport serves as an essential form of identification for freelancers in the UAE. It is required when applying for a residence visa, which is necessary for long-term stay and employment or freelance license in the country. Without a residence visa, freelancers may face legal consequences such as fines or deportation.

Moreover, a valid passport allows freelancers to travel freely in and out of the UAE without any restrictions or delays. This is especially important for those who may need to leave the country for work or personal reasons.

Additionally, having a valid passport shows that the freelancer has gone through proper identity verification processes. This helps maintain the integrity of the UAE’s business environment and ensures that only qualified individuals are able to work within its borders.

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Medical insurance

Firstly, as a freelancer, you do not have the luxury of benefits provided by an employer such as health insurance. This means that if you were to get sick or injured, you would be responsible for paying for all medical expenses out of pocket.

Additionally, having medical insurance helps protect freelancers from unexpected and high healthcare costs. Without insurance, a freelancer may face financial strain and potential bankruptcy in case of a serious illness or injury.

Moreover, having medical insurance can also improve access to quality healthcare services. With the rising cost of healthcare in the UAE, having insurance can help freelancers afford necessary treatments and medications.

Furthermore, many clients and companies in the UAE require freelancers to have medical insurance as it shows responsibility and reliability on the part of the freelancer. It gives clients peace of mind knowing that their hired freelancer is covered in case of any health-related issues.

Financial prudence

Earning above £75,000 is beneficial before considering the freelance setup, due to the setup and ongoing costs which are paid for.

Furthermore, accountancy support is crucial for freelancers in the UAE to ensure that all tax laws and regulations are followed accurately and to avoid any penalties or fines. A higher income can make it easier to afford ongoing accountancy support, which will ultimately save time and hassle in the long run.

Overall, aiming for an income above £75k when considering freelancing in the UAE is recommended as it can set you up for success and provide financial stability in your venture. However, it’s important to note that this may vary depending on your specific field of work and individual circumstances.

You can always schedule a quick, introductory meeting with our team, to understand if you have sufficient income.

Application form

In order to obtain a freelance visa, it is necessary for individuals to submit an application form to the authorities. This form outlines important information about the individual, including their personal details and reason for requesting the visa. However, going through this process on your own can be daunting and time-consuming.

That’s where RHJ Group comes in. Our team of experienced professionals will not only guide you through the entire application process, but we will also complete and submit the application form on your behalf. This not only saves you time and effort, but it also increases your chances of a successful application. With our expertise and support, you can rest assured that your freelance visa application will be handled efficiently and effectively.

Professional references

In order to work as a freelancer in the UAE, individuals will need to provide proof of employment from an employer or a contract that clearly outlines the services they will be providing. This is a crucial step in obtaining the necessary work permits and visas required for freelancers.

Having a letter from an employer is typically seen as more straightforward, as it clearly states who the individual will be working for and what their role and responsibilities will be. However, for those who do not have an offer of employment from a specific company, having a well-drafted contract is equally important. This document should include details such as the scope of work, payment terms, and duration of the project or service provided.

It’s worth noting that having these documents not only helps with obtaining necessary permits but also establishes credibility and professionalism for freelancers working in the UAE. It shows that they are serious about their work and have secured legitimate job opportunities. Therefore, it’s essential for individuals planning to freelance in the UAE to have these documents ready when applying for necessary permits to ensure a smooth process.

Assistance with the legal requirements

All of the above might appear complicated, fortunately RHJ Group offers assistance every step of the way in this process. From helping individuals obtain a trade licence and providing guidance on obtaining medical insurance, to offering financial advice and assisting with the application form.

RHJ Group is dedicated to helping aspiring freelancers successfully navigate the employment visa application process. Plus if you need support between the UAE and another country, such as the UK, in which they both hold a double tax agreement; our team can provide this support too! Why not schedule a free, introductory meeting with our UAE team; and discuss obtaining a freelance visa – or think about opening a sole company instead.

laptop, workstaion, office

Tax Considerations for Freelancers in the UAE

In the UAE, freelancers are subject to certain tax considerations that they must be aware of when conducting their business. The tax system in the UAE is relatively straightforward, with no income tax for individuals and a low corporate tax rate of 9% for companies. However, there are still important tax thresholds that freelancers must consider in order to stay compliant with the law.

Value added taxation

One key consideration for freelancers in the UAE is the value-added tax (VAT) threshold. VAT is a consumption tax that is levied on most goods and services in the country at a standard rate of 5%. As per the UAE VAT Law, freelancers are required to register for VAT if their annual taxable supplies exceed AED 375,000 (approximately USD 100,000). This means that once a freelancer’s annual income reaches this threshold, they must register for VAT and charge it on their services. It is important for freelancers to keep track of their income and monitor their progress towards this threshold to avoid any penalties or fines.

Corporate tax rates

Another important aspect for freelancers to consider is the corporate tax threshold. While there is no individual income tax in the UAE, companies are subject to a flat corporate tax rate of 9% on profits generated outside designated free zones. Therefore, if a freelancer operates as a company rather than as an individual, they must ensure that their annual profits do not exceed AED 375,000 in order to qualify for the lower corporate tax rate. It is worth noting that designated free zones offer incentives such as exemption from corporate tax, making them an attractive option for freelancers looking to reduce their taxes.

Other tax considerations

Additionally, freelancers may also have other indirect taxes to consider such as excise duties on certain goods such as tobacco and energy drinks. These taxes vary depending on the product but can range from 50% up to 100%. Freelancers should be aware of these duties when purchasing goods for their business or providing services that involve the sale of these products.

In conclusion, freelancers in the UAE must be mindful of the various tax thresholds and regulations in order to remain compliant with the law. These include VAT thresholds, corporate tax thresholds, and other indirect taxes such as excise duties. It is crucial for freelancers to stay informed about any updates or changes to the tax laws in order to avoid any penalties or fines. Seeking professional advice from a tax consultant can also be beneficial for freelancers looking to navigate the tax system in the UAE.

calculator, calculation, insurance

Business relief from tax

The UAE has always been a hub for innovation workers who wish to expand or learn more about the business world, with its booming economy and strategic location. When the global pandemic occurred it had a significant impact on how businesses could operate, in response to this, the UAE government introduced measures to support businesses and freelancers. By offering business tax relief until 2026.

So what’s the tax rate?

One of the key initiatives taken by the UAE government is the exemption of corporate tax rates for small businesses and freelancers. Under normal circumstances, companies in the UAE are subject to a 9% corporate tax rate. However, with this new relief program, small businesses and freelancers can take advantage of a 0% corporate tax rate until 2026. This means that these entities will not have to pay any corporate taxes on their profits, allowing them to reinvest their earnings into their business and help it grow.

The UAE governments aim to grow

This move by the UAE government is aimed at stimulating economic growth and supporting the local business community during these challenging times. By providing relief from corporate taxes, small businesses and freelancers can save significant amounts of money that they can use to sustain their operations or expand their business activities. This not only benefits these entities but also contributes towards creating a more stable and prosperous business environment in the UAE. Additionally, this measure showcases the government’s commitment to supporting entrepreneurs and fostering an entrepreneurial culture within the country.

dubai, emirates, burj khalifa

Double taxation benefits in the UAE

Becoming a freelancer in the UAE can be a great opportunity for individuals looking to expand their career and explore new opportunities. However, many people may hesitate to make this move due to concerns about taxation and financial implications; but there are double tax treaties which can be utilised.

Reclaiming UK tax

It is important for individuals to understand that even if continuing to have salaried employment in the UK and pay taxes, our team of UK accountants will be able to claim back any taxes paid. This is because once an individual becomes a freelancer in the UAE, they are considered a tax resident of the country. This means that they are subject to UAE tax laws and are no longer required to pay taxes in the UK. As per the double taxation agreement between the two countries, individuals can avoid being taxed twice on their income by claiming back any taxes paid in one country while working in another.

Double taxation agreement benefits

Moreover, it is worth noting that the UAE has double taxation agreements with many other countries as well. This means that individuals from various countries who choose to freelance in the UAE can also benefit from similar tax regulations. Our team of experts are well-versed with these agreements and can provide consultation services to help individuals explore their options.

More taxation benefits

In addition to tax benefits, freelancing in the UAE offers many other advantages such as a low cost of living, high-quality infrastructure, and diverse job opportunities. With our extensive experience and knowledge of both UK and UAE tax laws, we aim to help individuals make informed decisions about their freelance careers by providing them with reliable information and personalised advice.

In conclusion, freelancing in the UAE can be a lucrative option for those looking for new opportunities or seeking greater financial stability. Our team strives to assist individuals in making this transition seamlessly by providing top-notch accounting services and consultation on taxation matters. With our support, individuals can confidently take steps towards becoming successful freelancers while maximising their earnings through efficient tax planning strategies.

buildings, illuminated, water

Accountancy obligations to meet as a freelancer

As a freelancer in the UAE, it is important to recognise that even though you may not have a traditional business structure, there are still tax obligations that must be fulfilled. This is where hiring an accountant, such as RHJ Accountants, can greatly benefit you.

Dealing with taxes can be a daunting and time-consuming task, especially for those who are not familiar with the laws and regulations of the UAE. An accountant can help simplify this process by ensuring that all your tax obligations are met in a timely and accurate manner.

Bookkeeping management

One of the main responsibilities of an accountant is bookkeeping. This involves keeping track of all your financial transactions, including income and expenses, throughout the year. By maintaining proper bookkeeping records, you will have a clear understanding of your financial standing and will be able to make informed decisions for your business.

VAT obligations

Another important aspect of tax obligations is VAT registration and returns. Since the implementation of VAT in the UAE in 2018, it has become mandatory for businesses to register for VAT if their annual turnover exceeds AED 375,000. An accountant can assist you with this process and ensure that your VAT returns are filed correctly and on time.

Additional accountancy requirements

In addition to these services, an accountant can also provide valuable advice on tax planning strategies that can help minimise your tax burden while staying compliant with UAE laws. They can also help you identify any potential deductions or credits that you may be eligible for.

Overall, as a freelancer in the UAE, hiring an accountant is crucial for fulfilling your tax obligations and ensuring that your business operates smoothly without any legal issues. It’s always better to have a professional on your side to navigate through the complex world of taxes so that you can focus on what you do best – running your business successfully.

downtown, dubai, uae

Summary

Becoming a freelancer in the UAE can be a daunting process, with various legal and administrative requirements to navigate. However, with the help of RHJ Group, the process can be made easier and more efficient.

From start to finish, RHJ Group offers comprehensive support for freelancers looking to establish themselves in the UAE market. This includes assistance with registration and licensing procedures, as well as ongoing support even after the registration process is complete. With RHJ Group by your side, you can confidently pursue your freelance career in the UAE without worrying about the complexities of setting up and maintaining your business.

Following an introductory meeting with our team, we can provide you with a comprehensive breakdown of the services we can provide; including all associated fees. Plus if you need further support in your home country before setting up as a freelancer in the UAE, just ask!

We’re always on hand to provide clients with the support they need; and most of all to help create a more tax efficient plan for the future.

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