Plan contractor hiring in the United Arab Emirates

مؤسسة فردية

Sole establishment

A licensed sole establishment can be the natural-person supplier when the relevant economic authority permits that form and activity. The individual remains the business owner, so use the licensed name consistently on the agreement, invoice and payee profile. Collect the trade or professional licence and confirm its issuing authority, expiry and activity description. Ownership and local-service-agent conditions can vary with nationality, activity and emirate, so the licence is stronger evidence than a generic description of the form. For VAT, all sole establishments owned by the same natural person share one registration profile and their activities are combined for the threshold test.

Sources: UAE Government, steps to start a mainland business, Federal Tax Authority, VAT registration service

شركة الشخص الواحد ذات المسؤولية المحدودة

Limited Liability One Person Company (OPC)

A one-person LLC is a separate UAE juridical supplier owned by one natural or legal person. Federal company law limits the owner's ordinary liability to the capital stated in the memorandum, subject to the law's exceptions. Its registered name must carry the prescribed one-person company wording, and the company itself should sign, invoice and receive payment. Ask for the commercial licence, incorporation record and signatory authority, then match them to the tax registrations. The company form separates the supplier from its owner for contracting purposes.

Sources: Federal Decree-Law No. 32 of 2021 on Commercial Companies

منشأة منطقة حرة

Free Zone Establishment (FZE)

A Free Zone Establishment can supply the service only through the form and activity licensed by its own free-zone authority. UAE government guidance lists the FZE among possible zone entities and warns that every zone does not register every form. Collect the incorporation or registration record, current licence, authorised signatory evidence and tax numbers in the FZE's exact name. Avoid importing a Dubai or another zone's conditions into this sovereign entry. Free-zone incorporation also does not make all income subject to 0% corporate tax. The entity must satisfy the current Qualifying Free Zone Person conditions for the specific transaction and tax period.

Sources: UAE Government, starting a business in a free zone, Ministerial Decision No. 229 of 2025 on Qualifying and Excluded Activities

الإشراف والتوجيه

Supervision and direction

The federal boundary is whether the individual works for wages under the customer's supervision and direction. Classification follows the performed arrangement. Labels and licences serve as supporting records rather than a status decision. A service contract should define deliverables, milestones and objective acceptance while leaving the contractor control over method, work sequence and ordinary schedule. Staff rosters, mandatory permission for leave, continual manager instructions, employee performance ratings and disciplinary steps point toward employment. Security access, confidentiality rules and agreed delivery meetings can protect the customer without creating daily command. Recheck the classification when scope or operating practice changes, especially if one individual works continuously inside the customer's reporting structure.

Applied by: Federal Decree-Law No. 33 of 2021 defines a worker as a natural person authorised to work for a licensed establishment under the employer's supervision and direction. Use that federal test only after ruling out the financial-zone regimes. DIFC Employment Law states its own application conditions. ADGM states that it is exempt from the UAE Federal Labour Law and applies its Employment Regulations 2024 to ADGM registered entities and their employees.

What it weighs

• Who controls the method, work sequence and ordinary daily schedule
• Whether the agreement buys defined results or makes the person continuously available
• Whether leave requires managerial approval or only delivery coordination
• Whether instructions protect a result or direct the individual's manner of work
• Whether poor performance triggers contract remedies or employee discipline
• Whether the individual appears inside the customer's reporting and appraisal structure
• Whether the work is attached to a mainland, free-zone, DIFC or ADGM establishment

Sources: Federal Labour Law, current consolidated text, Labour Law Executive Regulation, DIFC Employment Law 2019, current consolidated PDF, ADGM Employment Affairs Office, Employment Regulations 2024

الرخصة الاقتصادية أو تصريح العمل الحر

Economic licence or freelance permit

This local record identifies the person authorised to carry on the service activity. Mainland suppliers use the relevant emirate's economic authority, free-zone entities use their zone authority, and a freelancer provides the applicable permit. Match the issuer, legal form, licensed name, activity, expiry and signatory to the contract. Initial approval is insufficient because it does not authorise practice. The supplier handles filings and renewals.

Who needs it: The named UAE supplier needs the licence or permit required by its emirate or free-zone authority for the particular service and legal form.

Sources: UAE Government, steps to start a mainland business, UAE Government, starting a business in a free zone, ICP, Green Residence Guide

رقم التسجيل الضريبي لضريبة القيمة المضافة

VAT Tax Registration Number (TRN)

A UAE VAT TRN identifies the supplier that reports the taxable service. Verify it when the contractor claims registration and use the same legal name on the payment profile. Mandatory and voluntary thresholds are separate. One natural person's sole establishments share a TRN and aggregate their activities. The FTA can register activity without a trade licence, so keep the TRN and economic licence as distinct onboarding checks.

Who needs it: A UAE-resident supplier whose taxable supplies and imports cross the mandatory threshold, or a supplier accepted for voluntary registration, needs the VAT TRN.

Sources: Federal Tax Authority, VAT registration service

رقم التسجيل لضريبة الشركات

Corporate Tax Registration Number

A Corporate Tax Registration Number identifies the supplier in the federal business-tax system. A natural person needs it after relevant calendar-year business revenue exceeds AED 1 million, while taxable companies follow their own timeline. Match the FTA record to the licence and contract. The supplier self-assesses corporate tax through its return. The foreign payer should not deduct the 9% rate from the invoice.

Who needs it: A taxable UAE juridical person and a natural person above the AED 1 million relevant business-revenue threshold need the federal registration number.

Sources: Federal Tax Authority, corporate-tax registration service, Ministry of Finance, corporate tax in the UAE

Mandatory VAT registration

AED 375,000 of taxable supplies and imports over the previous 12 months, or expected over the next 30 days

A UAE-resident contractor crosses the mandatory VAT threshold when aggregated taxable supplies and imports exceed AED 375,000 in the previous 12 months or are expected to exceed it in the next 30 days. Review the supplier's total activity, rather than the value paid by one foreign customer. Zero-rated supplies remain taxable supplies for registration analysis. For a natural person, combine all sole establishments under the same owner and TRN. Crossing the test creates the supplier's FTA registration duty. The foreign buyer should request the resulting certificate and updated invoicing treatment, while leaving the registration filing and VAT return to the contractor.

Sources: Federal Tax Authority, VAT registration service

Voluntary VAT registration

AED 187,500 of taxable supplies, imports or taxable expenses over the previous 12 months, or expected over the next 30 days

A UAE-resident business can seek voluntary VAT registration after the stated AED 187,500 test is met. The base includes taxable supplies, imports or taxable expenses and uses the previous 12 months or next 30 days. This explains why a contractor can hold a valid TRN below the AED 375,000 mandatory level. Verify the certificate instead of estimating turnover from the registration alone.

Sources: Federal Tax Authority, VAT registration service

Natural-person corporate-tax registration

More than AED 1 million of UAE business or business-activity revenue in a calendar year

A natural-person contractor registers for corporate tax after total relevant business revenue exceeds AED 1 million in a calendar year. Salary, private investment income and real-estate investment income are excluded from that revenue test. Registration is due by 31 March of the following calendar year. Once within corporate tax, the ordinary rate bands apply to taxable income: 0% up to AED 375,000 and 9% above it. Keep the two amounts separate. AED 1 million tests gross business revenue and registration. AED 375,000 divides taxable-income rate bands after expenses and tax adjustments. Neither amount authorises the foreign payer to withhold 9% from an invoice.

Sources: Federal Tax Authority, corporate-tax registration service, Federal Tax Authority, natural-person corporate-tax bulletin, Federal Corporate Tax Law

Qualifying Free Zone Person de minimis test

Non-qualifying revenue no higher than the lower of 5% of total revenue or AED 5 million in the tax period

A free-zone supplier seeking Qualifying Free Zone Person treatment must keep non-qualifying revenue within the lower of 5% of total revenue or AED 5 million for the tax period. The current qualifying-activity list is specific. A foreign customer and a free-zone address do not make general consulting or another service automatically qualifying. Ask the supplier to confirm how the contract income is treated and preserve that response with its licence and corporate-tax record. Failure of a qualifying condition removes the status from the start of that tax period and for the following four tax periods, so a prior 0% assumption can become stale.

Sources: Ministerial Decision No. 229 of 2025 on Qualifying and Excluded Activities, Federal Corporate Tax Law

Mandatory e-invoicing revenue phases

AED 50 million dividing the 1 January and 1 July 2027 implementation dates

From 1 January 2027, a person in the UAE e-invoicing system with revenue equal to or above AED 50 million must implement it; appointment of an accredited provider is due by 30 October 2026. A person below AED 50 million appoints a provider by 31 March 2027 and implements by 1 July 2027. Ask which revenue phase covers the contractor, record its date and update invoice receiving beforehand. The dates apply only to a person subject to the system, so confirm any exclusion rather than assigning a phase from revenue alone.

Effective from: 2027-01-01

Sources: Ministerial Decision No. 66 of 2026 amending e-invoicing implementation, Ministerial Decision No. 244 of 2025 on e-invoicing implementation