The difference between Trade License and Freelancer License

Dubai has become one of the fastest-growing economies today across the globe. As a result, many freelancers around want to be part of this roaring market. Nevertheless, starting a business and getting a trade license, might be difficult for entrepreneurs. In addition, they have to choose between a trade license and a freelance license.

In order to set up a business in Dubai, you have to have a valid license from the concerned authority. This rule also applies or independent professionals and freelancers who need a free zone work license and residence visa from the UAE.

In this article, you will learn everything you need to know about the difference between a trade license and a freelancer license in Dubai. Let us see:

1. What is a trade license?

2. What are the benefits of a trade license?

3. Why should you get a trade license?

4. Things to consider before applying for a trade license in Dubai

5. What are the categories of a trade license?

6. What is a freelancer license ?

7. How can you apply for a freelance license?

8. What are the benefits of having a freelance license in Dubai?

9. How can you avoid fraud when getting a freelancer license?

10. How can Connect Business Center help you get more information about a trade license and freelancer license?
11. What is difference between trade license and commercial license?

1. What is a trade license?

It is mandatory to hold a trade license for a business. A trade license (business authorization letter) is a legal document issued by a local municipality that provides authorization (authority) to a person or a party to commence business operations. A business license is granted only if the business corporation complies with all the rules and regulations of the respective State in which the business is located by the Security Officers.

The application is filed with the commissioner in the corporation 30 days before the commencement of business. During this process, the company has to submit all the mandatory documents.

The main purpose of the trade license is to control the locations by restricting people from executing certain types of businesses from their home locations or virtual offices. This way, maintaining the business environment and locality environment.

2. What are the benefits of a trade license?

There are many benefits you can get from a trade license such as permitting you access to join certain professional groups. Otherwise, you would not be able to join these groups, which may include business oriented-groups and investment groups.

Trade licenses give you the right to talk about your company as a legitimate company. Investors and clients will be much more likely to build a relationship with you if you have a trade license.

2.1 Legal Entity

A business needs to have a business license in order to treat it as a legal entity. This can be very beneficial when it comes to marketing your business.

2.2 Demand Rules and Regulations

As stated by the municipal authority in which the business is situated.

2.3 A measure of competence

With a business license, a business can operate in a commercial location, without fear of closure. It provides a demonstration of confidence and competence in the business and the entrepreneur.

3. Why should you get a trade license?

If you want to start a business, keep in mind you will need a trade license before you begin the whole process that comes along with it. In this manner, it will act as a type of permission slip that gives you the ability to carry out your operational processes. You will need to acquire this license at least three months before you intend to commence your business activities.

In addition, it will allow you to prove that the activities your company is carrying out are not going to present any type of health hazard. To sum up, it shows that your company is not going to perform any actions that would be considered a nuisance.

In terms of the fees, the cost will depend on the state or zone that you are applying for. Hence, bear in mind that some cities have their own fees you will have to pay.

A license department that specializes in granting businesses the authority to conduct certain activities grants the trade license. You can talk to our business consultants to help you with the process.

4. Things to consider before applying for a trade license in Dubai

We have already seen the benefits of getting a trade license. However, there are some things you should know before applying for one. Let us see: 

• You have to apply for a trade license before you start conducting business.
• You must renew your license on an annual basis, and within 30 days of its expiration date.
• The person must be 18-years-old or older to get a trade license.
• A clean criminal record (there may be exceptions to this).
• You have to execute required legal work, such as reporting income and expenses.

You have to complete all the proper steps to get a trade license because it can help you from being penalized. It can be offensive in the UAE not to have a trade license. Therefore, if you do not have a trade license when you are supposed to, then it means you are operating an illegal business, which can lead to hefty fines and penalties.

In addition, you do not want your personal taxes to be entwined with your business taxes, a trade license helps separate the two. You will have the opportunity to take advantage of a vast range of business deductions. Indeed, there are several business tax deductions that you can benefit from.

In case you need help with acquiring a trade license, do not hesitate to contact us.  

5. What are the categories of a trade license?

You can find different types of trade licenses:

5.1 Industry license

An industry license is for small, medium, and large-scale manufacturing factories. It generally exists to protect the public and to uphold professional standards. In most cases, it requires renewals and many individual licenses carry continuing education requirements.

5.2 Shop license

It is for trades such as the sale of firewood, cracker manufacturer, candle manufacturer, barbershop, laundry (dhobi) shop, etc. You will need this license if your business employs people who may be casual workers, full-time employees, contract-based, etc., to regulate the work conditions and ensure to protect workers’ rights.

Therefore, it is mandatory to register under the Shops and Establishments Act.

5.3 Food establishment license

It is mandatory in almost all instances where food is commercially handled or served to the public. Establishments such as hotels, food stalls, canteen, restaurants, the sale of meat & vegetables, bakeries, etc. Bear in mind, they require some establishments to submit plans and specifications to the licensing agency.

5.4 Documents you need for applying for a trade license

Let us see some of the documentation for the application for the trade license:

• Address of the business
• Applicant´s ID
• Layout plan of the office

6. What is a freelancer license?

It is a permit in Dubai that allows you to work as an independent contractor. It is perfect for those who are on their spouses or parents’ visa and only require a license to operate as a freelancer.

A freelance license enables you to earn money by running jobs independently without being committed to an employer. There are many jobs you can do as a freelancer such as blogging, graphic designer, translator, journalist, etc. In this manner, you get to live and work in Dubai and is renewable every three years. You can check our post about how shared workplaces help freelancers.

7. How can you apply for a freelance license?

You can apply through different sectors such as media, education, or tech. In case you are perusing professions like acting, screenwriting, advertising, journalism, or web development, you are eligible for a freelance license.

Firstly, you must know what freelance activities you can carry out in the UAE. Therefore, you can check out an entire list of freelance Permit activities you could do on our website. In addition, the process will depend on your profession.

The application process is very simple and the first thing you must do is apply for the freelance license in the UAE through Connect Business Center. Keep in mind, you will need some documents such as a bank reference letter, CV/resume, recent photograph, visa copy.

Those who are applying for the education sector must send proof of academic qualifications, certified by the Ministry of Foreign Affairs. In the case of the media, they must submit a portfolio or sample of their work.

When they approve your application, you will receive an email within 10-15 days after you have sent it. Afterward, you must sign the documents, pay the fees, and receive an email with your freelance license in Dubai.       

7.1 Freelance license application  

The moment you receive your license, you get access to our platform and avail a number of government or corporate services.

7.2 Cost of the freelance license

Costs can vary for the freelance license and establishment card depending on the free zone where you will register.

• Establishment card: AED 2,000
• The freelance permit: AED 7,500
• Freelance employment visa within the UAE:  AED 4,960  and AED 6,340 (Express)
• Freelance employment visa in Dubai outside the UAE: AED 3,330 and AED 3,900 (Express)

However, additional costs may apply whether you need a 1-year or 3-year license. You can check the expiry date of your freelancer license online.

8. What are the benefits of having a freelance license in Dubai?

A freelancer license can give a wide range of advantages. Let us look at some of them:

8.1 Flexibility

It may be the ideal choice for those who want to work for multiple companies in different sectors.

8.2 Affordability

With this license, you can provide your services at a more competitive price. Connect Business Center offers a package where set up costs are much lower and there is no need for office space, allowing more freelancers to enter the market.

Once you obtain the freelancer license, you can the freedom to work as an independent contractor for companies across the UAE. In addition, you can easily get office space for rent in Dubai.

9. How can you avoid fraud when getting a freelancer license?

You need to know there are tons of online advertisements that promote freelancer licenses packages on social media platforms and company websites. However, these advertisements offer a “freelancer license” or opportunities to make the process easier without leaving your home, which in most cases ends up being a fraud.

They usually encourage people to omit information or lie in their application, promise you permanent residency in the UAE in exchange for a payment, require you to buy products promising that the process will be faster, and ask you for access to your email and social accounts.

10. How can Connect Business Center help you get more information about trade licenses and freelancer licenses?

Our platform provides freelancer licenses and connects individuals and companies with many freelancers around the globe. With us, you could take your freelance career to the next level by getting your freelancer license and start having a great quality of life in Dubai.

With Connect Business Center, you can participate in big projects, find excellent earnings and work in great facilities.

Would you like to contact Connect Business Center to obtain more information about the trade license and freelancer license? If you have any questions, email us at info@connectbusinesscenter.com, and you will talk to one of our representatives who will answer your questions.

If would like to send your resume or CV, you can enter thetalentpoint.com. Resumes sent to contact@thetalentpoint.com will not be stored. Do not hesitate to contact us now.