Short answer: a freelance permit is for working as yourself; a company licence is for running a business. The UAE Government portal describes the freelance work permit as a permit for individuals who provide services independently, without an employer sponsor or an employment contract. A company licence creates a separate entity that can hire, sign contracts in its own name and sponsor visas within its quota.
Side by side
| Point | Freelance permit | Company licence |
|---|---|---|
| Who holds it | You, as an individual | A company you own |
| Hiring staff | Not the model | Yes, within visa capacity |
| Partners | No | Yes, as shareholders |
| Visas | Your own residence where your permit route allows it | Investor or partner visas, employees, dependants |
| Corporate tax | A natural person is taxed only if business turnover exceeds AED 1 million in a calendar year (FTA) | The company must register for corporate tax (FTA) |
| Activities | Services from an approved list | Services, trading and more, subject to licensing |
| Banking | Bank decides; options can be narrower | Corporate account; bank decides |
When a freelance permit fits
- You are a consultant, designer, developer, trainer or similar, and you bill your own time.
- You do not plan to hire or bring in partners soon.
- You want a simpler start and can live within the permit's activity list.
Established freelancers can also look at the five-year Green visa. GDRFA lists a freelance permit from the Ministry of Human Resources and Emiratisation, a bachelor's degree or specialised diploma, and self-employment income of at least AED 360,000 a year for the previous two years or proof of financial solvency. Green visa holders can sponsor family (u.ae).
When a company licence fits
- You will hire, add partners, or sponsor residence for more people than yourself.
- You trade goods or need activities outside a freelance list.
- Clients want to contract with a company, or you want to keep business and personal matters separate.
- You want something you can grow, invest in or sell later.
Lexoford service fees are Starter AED 3,999 (licence + 1 visa), Business AED 4,999 (licence + 3 visas + Small Business Relief (SBR) eligibility check) and Premium AED 7,999 (licence + 5 visas + CT + VAT; ERP included). Free-zone and government fees are paid at cost on top. See company formation, the cost calculator and mainland vs free zone.
How Lexoford helps
We coordinate both routes through visa services and company formation. If a freelance permit fits you better, we will say so. We do not guarantee permits, visas or bank accounts, and we are not a law firm or tax adviser; see what we don't guarantee and our corporate tax overview.
FAQ
Can I switch from a freelance permit to a company later?
Yes, usually by forming a new company. Many founders start freelance and set up a company once they hire or add partners. Plan the switch around renewal dates so you do not pay for both longer than needed, and move client contracts to the company in writing.
Do freelancers pay UAE corporate tax?
Only above the threshold. The FTA says a natural person doing business is subject to corporate tax only if business turnover exceeds AED 1 million in a calendar year. Salaries and personal investment income do not count as business. Check your position with a qualified tax adviser.
Can a freelancer sponsor family?
It depends on your residence route. Holders of the Green visa can sponsor family members, according to the UAE Government portal. On other routes, family sponsorship follows the standard income and housing rules. Immigration decides each application.
Is a freelance permit always cheaper?
Usually cheaper to start, not always cheaper overall. A permit has fewer moving parts, but if you soon need staff, partners or extra visas, forming a company later means paying setup twice. Compare both routes over two to three years before you choose.