Financial and Tax Considerations for Freelancers in Dubai

Author

Emma

Professional Development Specialist

As a freelancer or contractor, you have the world at your feet. Making the most of this flexibility is a must and few places are better to set up your remote workspace than Dubai.            

Dubai is a freelancer’s paradise. Year-round sunshine is a bonus, but there’s also diverse culture, forward-thinking infrastructure, and most of all: tax-free income. 

But, before you take the plunge and relocate to Dubai, self-employed professionals must get a good grasp on the financial and tax rules. 

This article aims to support independent consultants with expert advice on: 

• Tax laws (we’ve kept it simple and easy to understand) 
• How to set up your self-employed business
• Managing your money in the UAE

Let’s get you started on your journey to success as a freelancer in Dubai! 

Financial and tax considerations for contractors in Dubai

Let’s first cover everything you need to know about financial regulations and tax in Dubai. 

Personal income tax and VAT

One of the greatest perks for freelancers is the absence of personal income tax. Setting up as a consultant in Dubai means retaining your earnings and seriously boosting your income. 

There are VAT implications to be aware of though. As a freelancer, you must register for VAT if you exceed the income and taxable supplies threshold, set by the UAE’s Federal Tax Authority.   

If your earnings exceed AED 375,000/ GBP 83,000 you fall into the  mandatory VAT registration category. 

This means you must: 

• Charge a standard VAT rate of 5% on taxable services 
• Issue tax-compliant invoices to clients 
• Make VAT payments to authorities on time
• File VAT returns monthly or quarterly 

Freelance permit and business license

If you’re working independently in Dubai, you need a business licence. Let’s look at the most favored options for self-employed workers:

Freelance licence

The Freelance Work Permit UAE is the go-to business licence for independent consultants. It means you can provide your services to multiple clients, without setting up a company. 

Applying for the freelance work permit – A quick guide

1. Prepare your documents: Such as a valid passport, passport-sized photos, professional certifications, CV, portfolio, bank statements, and a No Objection Certificate (NOC) if applicable.

2. Pick a free zone: Choose from over 30 free zones in Dubai, each catering to specific industries.

3. Submit your application: Apply online via the chosen free zone’s website or through GoFreelance.ae.

4. Pay fees: Freelance visa costs start at approximately AED 7,500/ GBP 1,650

Your freelance work permit must be renewed annually and the same fees will apply.  

Other business licences

Depending on your business activity, you may need a different business licence. For instance, the Professional Licence is best-suited to independent pros who provide business consultancy, legal services, and healthcare. 

It’s a good idea to read up on the full Dubai business licence options, to see which category your services best fit into.     

Compliance with UAE financial regulations

To make sure you are working in line with Dubai’s financial regulations, it’s best practice for consultants to: 

• Keep accurate financial records 
• Invoice clients correctly with clear rates and payment terms 
• File timely VAT returns (where applicable) 
• Familiarise yourself with cross-border payment policies when working with international clients

Keeping these financial and tax considerations in mind will not only help you set up a freelance business in Dubai, but also set you up to thrive in your new venture.

Opening a bank account in Dubai as a freelancer

Why a local bank account is essential

Having a personal Dubai bank account will make your life easier as an independent consultant. It allows you to make quick and easy online transactions, plus receive client payments or a contractor salary without hassle.  

Steps to open a bank account in Dubai

Setting up a bank account in Dubai is easy. Here are the steps to follow:  

1. Research and select a bank that caters to freelancers – think about proximity, ATM accessibility, account types, and features such as minimum balance. 

2. Gather the necessary documents – you need proof of identity like a passport, Emirates ID, and freelance permit.

3. Submit an application – you need to submit your personal details to meet the bank’s Know Your Customer (KYC) policy. 

4. Complete the process and activate your new bank account once approved.

Considerations when choosing a Dubai bank

Be aware that some banks require a minimum balance of AED 3000 (circa GBP 650) to open an account. Some may also require you to maintain a minimum balance. 

On top of this, there are other factors to consider to make sure you find the best account for you: 

• Transaction fees
• International payment handling 
• Online banking features 
• Reputation of the bank

Practical tips for managing finances as a freelancer in Dubai

Financial planning is essential for all of us trying to stay ahead of life’s curveballs. But when you’re freelancing overseas, it’s more important than ever to keep a good grip on your finances. 

Here are our tips for managing your money in Dubai: 

Budgeting and expense tracking

Set clear goals for what you want to earn and save, and keep track of what you spend each month. 

A simple spreadsheet showing the cost of your rent, bills, and typical outgoings (yes, even your daily coffee!) will help you see where your money is going. This visibility will keep you on track to budget wisely. 

Keep in mind that your freelancer income is likely to fluctuate. It’s a good idea to build an extra buffer into your budget to account for this and see you through the leaner months. 

Planning for retirement and savings

Dubai doesn’t have a pension system for freelancers so any retirement plan you contribute to needs to be self-funded. 

Building this into your budget will keep you on track and help you make sustainable payments into a pension or long-term savings pot each month.  

Working with an accountant or financial advisor

Seeking advice from a finance professional is a good idea to have complete peace of mind around your money. 

An accountant or financial advisor can ensure your compliance with Dubai’s regulations. They can support you with VAT returns (if applicable), and keep you up to speed with any changes to income tax obligations. 

They can also be a safe pair of hands to help with your financial planning and budgeting to ensure you get the most bang for your buck. 

How independent professionals can maximise financial opportunities in Dubai

Dubai presents a wealth of opportunity for freelancers & contractors to tap into. Here are our top tips for turning these opportunities into success: 

Make the most of Dubai’s tax-free environment

Tax-free income is a major perk. Consider using the money you would have paid as tax to reinvest into your business. This could mean a new or updated website, online advertising, expanding your skills through training courses, or diversifying your services.

Build a network for financial growth

Dubai offers fertile ground for freelancers to build a strong network. 

We recommend tapping into its dynamic coworking spaces, attending professional events, and joining the readily available freelance communities. 

By connecting with other professionals you’ll find support, valuable information sharing, as well as opportunities to meet new clients.  

Lean on digital tools for financial management

Find some solid financial tools to help with your money management. 

From platforms like QuickBooks Solopreneur for managing money and tracking expenses, to Bonsai for supporting your task management and invoicing. Using digital tools will not only help you keep everything in line, but also free you up to focus more time on clients and projects. 

The Hightekers’ solution

For independent consultants relocating to Dubai, there are a host of customised solutions from Hightekers that can simplify your journey and maximise your freelance earnings.  

Partnering with Hightekers ensures your compliance with Dubai regulations. We also take care of invoicing and account management so you can focus on growing your business. What’s more, you can access employee-style benefits while remaining self-employed and join a powerful network of independent professionals. 

Kickstart your Dubai relocation!

Freelancing in Dubai provides endless opportunities for growth and a boost to your earnings. With tax-free income and an active business scene, independent professionals are well placed to thrive. 

Just don’t forget to keep the key considerations in mind. From VAT registrations and having the right business licence, to opening a Dubai bank account and managing your money like a pro. Be sure to do your homework and plan strategically to get ahead of the challenges. 

Why not also consider partnering with a specialist managing company like Hightekers. 

We’ll take all the hassle (and most of the admin) out of your relocation to Dubai. So all that’s left for you to do is focus on your flourishing freelance career in the UAE.

Kickstart your Dubai relocation with Hightekers today!

Author

Emma

Professional Development Specialist

A seasoned career development specialist based in Bristol, where she helps international professionals manage the complexities of establishing their independent careers in the UK. With over a decade of experience in talent management and professional mobility, she leads initiatives to support freelancers and independent consultants across various high-skilled sectors. When she's not advising professionals on their career journeys, you might find Emma exploring Bristol's street art scene or cheering on her beloved Bristol City FC!