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The UAE is a booming economy and is growing rapidly across the globe. However there often arises a difficulty for entrepreneurs in deciding whether to choose a trade license or a freelance license to start its business. This can be decided by taking into consideration various factors of both the licenses.

For business set up in Dubai, the entrepreneur needs to obtain a valid license from the necessary authority or you can also become a freelancer if you apply for a free zone work permit and residence visa from UAE.

Let us understand the difference between Trade license and freelance license:

What is a freelance permit?

A freelancer is a self-employed person who is offering a certain service. He/she is a sole practitioner and starts the business in their own name. 

The free zones which allows freelancing in Dubai are:

  • Dubai Design District
  • Dubai Media City
  • TwoFour54
  • Dubai production city

What are the steps involved to obtain a freelance license?

  • Apply with one of the above-mentioned free zones
  • Submit the application along with your passport copy
  • Pay the requisite fees
  • Collect the certificate for a freelancer visa approved by the UAE free zone
  • The freelance license will be issued in 7-10 days

What is a Trade license?

It’s a general license that allows one to carry out multiple trading activities that are in the same or different industries in the UAE. The activities include imports, exports, trading of products, and services. Anyone who is willing to do a wholesale business must have a trade license. Having a trade license can help you in conducting your business activity locally, as well as internationally 

What are the steps involves in a trade license?

  • Select the legal structure and trade name for the company
  • Determine the business activities to be carried out
  • Apply for initial approval
  • Draft the Memorandum of Association (MOA) and other documents from the necessary authorities
  • Choose the location for your business
  • Submit the application to the Department for Economic Development (DED)

Difference between 

Freelance License Trade License
Obtaining a freelance license is relatively easier with fewer documents Obtaining a trade license is a relatively complex task
Freelance license costs are lower. There are lucrative freelance permit packages for professionals in the UAE. The cost of obtaining a trade license is higher when compared to a freelance license.
A freelance license allows only the named person to work in the business. Incase the freelancer wants to hire employee then he has to upgrade it to a trade license A trade license allows hiring employees 
A freelance permit can be issued only to a limited set of domains A trade license can be issued to any sector the entrepreneur is willing to explore.

Bottom line:

If you are looking to work with big companies or government agencies then it is advisable to choose a trade license; as it brings transparency and credibility to such organizations. However, if the cost is your major factor to consider then you can opt to work as a freelancer. 

Looking to start a business in Dubai? Contact MSZ Consultancy. We are one ofthe leading business consultancy in Dubai. Our team of professionals will not only assist you on how to establish business in Dubai but will also guide you with understanding the types of company formation, license procedure,  more. Get in touch with us today!

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