A freelance permit lets you work in your own name as an individual, usually with a visa for yourself only and no staff. A company (for example an LLC or free zone company) is a separate legal entity that can hire, sponsor visas, sign larger contracts and take on partners. If you are testing an idea alone, a permit can be enough; if you plan to grow, employ or work with corporate clients, a company is usually the better fit.
What is a freelance permit?
In the UAE, “freelance permit” covers a few different things:
- Free zone freelance permits or licences, issued to individuals for listed professional, media, education and tech activities, often with a residence visa for the permit holder.
- Mainland professional or freelance licences issued in Dubai by the Department of Economy and Tourism (DET).
- The MOHRE freelance work permit, which lets someone work independently while already holding residence. It does not by itself create a business or give a visa.
Whichever version you choose, the permit belongs to you personally. It is not a separate legal person.
Side-by-side comparison
| Factor | Freelance permit | Company |
|---|---|---|
| Legal status | You as an individual | Separate legal entity |
| Liability | Your personal assets are exposed | Generally limited to the company (for LLCs and free zone companies) |
| Staff | Usually cannot employ | Can hire, subject to visa quota |
| Visas | Typically your own only | Quota depends on the licence and office |
| Activities | Limited list, mostly services | Wide range, including trading |
| Partners and investors | Not possible | Shares can be issued or transferred |
| Corporate clients and banks | Some prefer a company | Generally easier |
| Running cost | Usually lower | Higher, but more flexible |
How tax works for each
Corporate tax
Under Cabinet Decision No. 49 of 2023, an individual doing business falls within corporate tax only when their business turnover exceeds AED 1 million in a calendar year. Salary, personal investment income and personal real estate income are not counted. Once in scope, the normal rates apply: 0% on taxable income up to AED 375,000 and 9% above that, as of October 2026.
A company is a taxable person from incorporation and must register for corporate tax whatever its income. Small Business Relief may apply where revenue is AED 3 million or less, for tax periods ending on or before 31 December 2029, but a return must still be filed. Free zone companies may access the 0% rate on qualifying income if they meet the conditions; this is not available to individuals. Read more on our tax page.
VAT
VAT rules are the same for both. You must register when taxable supplies exceed AED 375,000 in the previous 12 months or are expected to in the next 30 days, and you may register voluntarily from AED 187,500.
When a freelance permit makes sense
- You work alone in a listed service activity, such as design, consulting, writing or IT.
- You want to test demand before committing to a company.
- Your clients are happy to contract with an individual.
- You do not need to sponsor staff.
When a company is the better choice
- You plan to hire, even one person, in the next year.
- You trade goods, import or sell online at scale.
- You want a partner or outside investor.
- You want to separate personal and business liability.
- You are aiming for government or large corporate contracts that ask for a company licence and tax registration.
- You may want to use the company for an investor-route residence visa for yourself and your family.
Mainland or free zone?
Both permits and companies can be set up on the mainland or in a free zone. Mainland structures can trade directly across the UAE market; free zone structures are often quicker and more cost-effective for service businesses. Tajnes offers Dubai Mainland, Abu Dhabi mainland, Dubai Free Zone, Dubai Free Zone Premium, Sharjah, Ras Al Khaimah and Ajman Free Zone options.
Can I switch later?
Yes. Many people start with a permit and move to a company once they grow. The permit and the company are separate, so switching usually means setting up the new entity, transferring your visa, opening a corporate bank account and closing the permit. Planning the switch around your visa dates avoids gaps.
Five questions to help you decide
- Who will pay your invoices? If your main clients are large companies or government bodies, ask whether they accept individual suppliers.
- Will you need help? Even one assistant or developer on payroll points towards a company.
- What is your risk exposure? If a mistake could lead to a large claim, limited liability matters.
- What visas do you need? Think about yourself, your family and any future staff.
- Where do you want to be in three years? If the answer includes partners, investors or a team, setting up a company early can save a later restructure.
There is no single right answer. Many successful businesses start small and scale up, while others save time by setting up the right structure from day one.
Next steps
Compare costs side by side with our cost calculator, see current offers, or book a consultation and we will help you choose the structure that fits your plans. Government and third-party fees are always shown separately from our service fee.
Frequently asked questions
Can I get a UAE visa with a freelance permit?
Many free zone freelance permits include a residence visa for the permit holder. The MOHRE freelance work permit does not grant residence by itself.
Can a freelancer hire employees in Dubai?
Generally no. If you need staff, a company licence is the usual route.
Do freelancers pay corporate tax in the UAE?
Only if business turnover exceeds AED 1 million in a calendar year. Then 0% applies up to AED 375,000 of taxable income and 9% above, as of October 2026.
Do freelancers need to register for VAT?
Yes, if taxable supplies exceed AED 375,000 over 12 months. Voluntary registration is possible from AED 187,500.
Is a freelance permit cheaper than a company?
Usually, yes. Use our cost calculator to compare current government and service fees.
Can I convert a freelance permit into a company?
You normally set up a new company and then close the permit, transferring your visa in a planned sequence.
General information, not legal or tax advice. Rules and fees change and authorities make all final decisions. T&Cs apply.
