The United Arab Emirates is one of the fastest-growing economies today across the globe. However, when it comes to starting a business and obtaining a trade license, entrepreneurs often find it difficult to choose between a trade licence or a freelance licence. If you are unsure which one to go for, consider the various factors both types have to offer.
To set up a business in Dubai, an entrepreneur or investor must obtain a valid licence from the concerned authority. This rule is also for independent professionals and freelancers who need a free zone work licence and residence visa from the UAE.
Let us understand the difference between a Trade licence and a Freelancer licence.
A freelancer is an independent professional and self-employed individual who offers services independently. They are the sole owner and practitioners of their business and start it in their name.
A trade licence in the UAE is a general business licence essential to carry out various businesses and trades in the same or different industries. The business activities may be related to trading goods and products, imports, exports, and services. Additionally, even investors in wholesale business should possess a valid trade licence to function smoothly. A trade licence is an authorised document issued by the relevant authorities to business owners and entrepreneurs to run their business activities locally and internationally.
|Obtaining a trade licence is comparatively complicated and requires a lot of paperwork and approvals.||
Acquiring a freelancer licence is much easier than acquiring a trade licence. Fewer documents and approvals are needed.
|The cost of obtaining a trade licence is higher.
|The cost of a freelancer licence is lower compared to a trade licence. The UAE provides some very lucrative freelance permit packages for freelance professionals.|
|Companies can hire employees under a trade licence.
|A freelance licence does not allow hiring employees. Only the named person in the licence is allowed to work in the business. In case the freelancer wants to hire employees or expand its business, it will need to upgrade it to a trade licence.|
|A trade licence is issued to entrepreneurs in any sector.||A freelancer licence is issued only to a limited set of domains.|
If you have big plans and money is not a constraint to invest in a business, and need multiple people to accomplish your tasks and work on big projects, then it is advised that you opt for a trade licence; it will give your business and work more credibility and reputation. However, if the cost is the primary constraint and you are not able to handle big projects, you should consider a freelancer licence.
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