Abu Dhabi will issue freelancer licences for 48 types of activities, it was announced on Sunday.
UAE citizens, residents and non-residents may apply for the licences.
The Abu Dhabi Department of Economic Development said the new licences will allow people to work remotely, from home or from any other authorised location.
Retired people, housewives and students may also apply for the licence to carry out any of the 48 business activities.
But they must have relevant skills to get such a licence.
Employees working in the government or private sector can apply but they will need approval from their employers to avoid any conflict of interest.
Licence holders do not need office space to work. Non-residents can also apply for residence visas for themselves and their families after getting the licence.
The initiative will reduce the cost of doing business because companies can now hire freelancers temporarily when they need them for a project.