Access to talent is important to any economy, more so for a diversifying one. Growing businesses need specialist providers with scalability to take on small assignments and flexibility to turn around quickly at competitive rates. Equally, individuals need a freelance-friendly environment, whether starting off as their own boss or moving from many years in a full-time role to working for themselves. Freelance permits have been recently introduced within the UAE to help the economy diversify by creating a pathway for individuals to start their own businesses, if they wish, and build a pool of talent to innovate and create. We explore the development of freelancers in the UAE.
Freelancers and the pandemic
The pandemic accelerated our acceptance of remote and flexible working. So, whilst freelance permits were available in the UAE since 2018, more options to go freelance became available in 2020 during the pandemic. The UAE has sought to provide the greatest clarity and regulation around freelancers in the Middle East region, creating an attractive base for international freelancers with a time zone convenient to Europe, Africa, and Asia together with no personal taxes. The pandemic has also been an opportunity for many to re-evaluate what is important to them and achieve greater balance. With the variety of activities available, together with places to reflect, the UAE is a location to achieve a greater balance towards wellbeing. These factors make it unsurprising that Dubai already ranks eighth in the “best cities in the world for being a freelancer” in a recent survey.
In what sectors are freelance talent available?
Accessing freelance talent and freelance opportunities in the UAE is very easy as there are now multiple online platforms where businesses seek freelancers. Freelance talent includes everything from young creatives to experienced senior executives, so in all probability, there will be someone out there to match a business’ need. But in which specialist areas can individuals obtain a freelance license or permit? Originally, freelance permits were issued in three broad sectors, namely Media, Technology and Education. However, in November 2020, Abu Dhabi created the freelance license, including 48 activities from project design and management services to legal consultancy. This significantly enhances the UAE economy by enabling a wide range of freelancers to operate without the need for significant overheads and so provide businesses with very competitive rates. The authorities issuing freelance permits and licenses are:
- Abu Dhabi Department of Economic Development (ADDED)
- Abu Dhabi - Twofour54 from The Media Zone Authority.
- Dubai Development Authority (DDA) – Media (Dubai Media City), Tech (Dubai Internet City) and Education (Dubai Knowledge Park).
- Ajman Free Zone (AFZA).
- Umm al Quwain Free Zone
- Creative City Fujairah
- Ras Al Khaimah Economic Free Zone Authority (RAKEZ).
The annual cost of a freelance permit or licence varies from just under US $200 to approximately US $5,000, depending upon the issuing authority and the personal circumstance of the freelancer, but it is important to understand what the fees include. Some fees quoted do not include the cost of an Immigration file (Establishment Card) or visa charges. Also, some permits have annual renewal costs whilst others are renewed every three years. The actual process for obtaining a freelance permit or license is reasonably easy and quick. A freelance permit or license enables the individual to sponsor their dependent family with residence visas.
Points to consider for both businesses and freelancers
For most businesses across the world, the pandemic has brought a significant amount of uncertainty which naturally cause some internal projects to be deferred. Businesses need to remain competitive by having robust infrastructure, which is a continuous investment. It is worth considering progressing some internal infrastructure projects using freelancers as, from past knowledge, the global economy rapidly grows after shrinkage. It is best to be ready.
Having sufficient working capital and managing cash flow are equally important. Wherever possible, include a fee payment structure with 50% in advance and another stage payment at part completion. Set prices, which provide a realistic return and avoid the temptation to discount to an unsustainable level as for many, it is difficult to increase prices for existing customers, which may become the core of your recurring income. Whilst freelancers are not required to have business premises, understandably, freelancers cannot employ people. For many, operating as a freelancer will be the goal, for others it may be a low cost and simple way to test the market before transitioning to a company in the UAE.
For more information about freelancer permits, please click here to download a copy of BDO’s Guide to doing business in the UAE.