Working as a freelancer in a thriving business hub like Dubai can rightfully be intimidating. However, one area you cannot ignore if you want to run a freelance business successfully is your finances. You must be able to manage your finances in order to stay afloat effectively. Managing your finances does not have to be a challenge. In this article, we have compiled some valuable tips to help you navigate the financial aspects of freelancing in Dubai.
Setting Up Your Finances
We are starting from the very beginning, which involves setting up your financial system.
Consult a Financial Advisor
The first and best step you can take when setting up your finances is to consult a financial advisor. Trust us, it is worth it, especially if you are not familiar with Dubai’s tax laws. Receiving guidance from a professional advisor or accountant well-versed with Dubai’s rules and regulations is the key to setting a strong foundation for your finances. https://www.amary.ai/ is a perfect example of the financial guide you need.
Get a Permit or License
To operate a freelancer business legally in Dubai, you will need a permit or license. Get one first before you start running your business to avoid future issues.
Open a Business Account
Your business and personal finances should be separate. Create an account solely dedicated to finances related to your freelance business. This will help you track your business income and expenses more easily and accurately.
Managing Your Finances
After successfully establishing a financial system, it can fall apart if you do not manage it properly. Here are tips on how you can do that.
Create a Budget
Get an estimate of your monthly income and expenses and build your budget around it. For example, you can allocate 50% for expenses, 30% for wants, and 20% for savings or to cover any debt. This simple system is highly effective and can be tweaked to suit your priorities.
Track Your Expenses and Income
Monitor the flow of income both into and out of your business account. This is to help you identify areas where you need improvement and help you make well-informed financial decisions.
Set Aside Funds to Cover Taxes
As a freelancer operating in Dubai, you are required to pay corporate tax if you are earning more than AED 375,000 per year. Set your required amount aside to ensure it does not affect your business. As earlier advised, a financial advisor can help you remain compliant.
Have an Emergency Fund
Aside from your regular savings, have an emergency fund set aside just in case. It should contain enough funds to support up to 3-6 months of living expenses. This will be helpful in case of emergency expenses or drops in income. You can also make some investments against your future.
Stay Organized
Lastly, remain organized. Have an accurate record of your income, expenses, and all financial statements. This will prevent confusion and losses, and also prevent you from missing deadlines and damaging your reputation.
Successfully managing your finances is possible even in a bustling city like Dubai. By following these tips, you can manage your finances, reduce financial stress, and build a thriving freelance business in Dubai.
