Car rental companies drive Dubai’s growth. You simply can’t travel around the United Arab Emirates (UAE) without a car. Tourists, visitors, business people – and UAE residents alike – rely on rental cars for personal and business transport. With Dubai and the UAE’s world-class road infrastructure, it is easy and convenient traveling around the Emirate by vehicle.
This article will help you learn about the benefits of starting a car rental business in Dubai, the startup costs involved in your own car rental business, and the steps needed to open a vehicle rental business in the UAE.
Partnering with a company setup specialist such as Trade License Zone will help your business plan evolve into a successful car rental business. Make use of our business setup and consultancy services so you can concentrate on your car fleet, your rental car service, and your potential customers by creating your own sustainable, legal business entity.
Benefits of Creating a Car Rental Business in Dubai
Dubai offers the ideal business location for tourists and business travelers. This Emirate is the gateway to the Middle East, Africa, and Europe. Not only does Dubai boast world-leading road infrastructure, ports and airports, but it has a thriving local target market for your new business venture to exploit.
Since COVID-19 interrupted the world in 2020, tourists and business travelers are now returning to Dubai once again. Pre-COVID-19, the country saw over 20 million tourists a year (with this number growing yearly by 10%). This growth is returning as more and more countries open their borders for travel.
One of the biggest trends in recent years has been the wide adoption of ride-hailing services such as Uber. These have impacted the sales of new vehicles in the UAE as more foreign nationals are happy to make use of public transport, ride-hailing services, and also prefer to simply rent cars for extended trips. This is also how and why businesses rent vehicles: it is often more cost-effective to occasionally hire a specialist vehicle instead of buying such a vehicle for rare usage.
The major mode of transport used by tourists, foreign nationals, and business travelers is rental vehicles. The benefits of a rental car business in Dubai are many. If you’re looking into starting your own business in the car rental industry, now is the right time.
Steps to Start a Car Rental Business in Dubai
If you’re wondering how to start a car rental business in Dubai, we’ve outlined 6 simple steps to build your rental car company successfully.
Step #1: Partner with Trade License Zone
Partnering with a local business setup agency such as Trade License Zone is the first step in starting a car rental business in Dubai. The UAE has implemented innovative free zones to stimulate and support industries with specific regulations. By choosing the right legal structure and business model, you can apply for a trade license in a relevant Dubai free zone establishment for maximum benefits and local government support.
Our specialists at Trade License Zone will manage all aspects of your company registration and setup process and guide you on the various governmental and municipal trade regulations for operating a car rental business in Dubai.
Step #2: Choosing the Right Business Location (h3)
Your rental car fleet is your business. For that, you’ll need a physical premises for your office and fleet of cars. It is also a prerequisite for business insurance and other governmental regulations for your trade license. Choosing a strategic location is vital to attract potential customers and retain customers, with the most ideal locations near an airport or major transport hub.
Signing a rental agreement – with all the necessary administration that entails – is a critical step in securing your trade license. We at Trade License Zone can help you manage this step with ease and confidence.
Step #3: Setting up a Business Structure
The United Arab Emirates created its trade zones to better manage and support specific industry types. The two main classes of trade zones in Dubai are Mainland Companies and Free Zone Companies. A Mainland Company allows you to trade within Dubai and across the UAE, but you’re limited to only owning 49% of the business’s shares. The laws require a UAE national partner to own a 51% share of all foreign-owned Mainland Companies.
A Free Zone Company is set up in one of Dubai’s more than 40 special economic zones. These free zones offer benefits to foreign entrepreneurs such as 100% business ownership and the authority to repatriate all the profits.
If you decide to go the Free Zone Company route, you’ll need to follow a few extra steps to secure your trade license: you’ll need to open a branch or use a distributor to trade directly within the UAE target market. A Mainland Company setup, on the other hand, allows you to trade within the UAE market with no extra steps needed.
At the same time, you need to determine the type of trade license for your new startup. To do business in the UAE, you’ll need to register for a new company and apply for a trade license for your business activity.
It is important to consult company formation specialists to make sure your chosen business model, structure, and activity align. All businesses of this nature must register with the Dubai Department of Economic Development (DED). Additionally, car rental businesses must ensure their business activity and business entity conforms to the UAE’s legal business entity requirements for ‘Car Rent and Passenger Transport’.
Step #4: Choosing a Company Name
Trade License Zone can help you choose and register your car rental business name with the UAE’s Registry Office. The business name must adhere to the UAE’s strict naming regulations. Business names cannot include any offensive or blasphemous language, nor any references to Allah or Islam. If you wish to include your name in your company name, you must use it in full rather than just your surname or initials. We’ll also check that your chosen name is available to be registered.
Step #5: Applying for a Trade License
To trade as a car rental business in Dubai (and the rest of the UAE), you’ll need to apply for a Commercial License. This type of trade license is also known as a general trading license or a business license. These are the most popular trade license types issued in Dubai.
Commercial Licenses serve as both regulation and protection for companies operating in Dubai. It qualifies these businesses for various business support structures specific to industries, such as startup incubators, banking support, as well as business-specific trade incentives.
When you apply for a Commercial License, you will need the following documents:
- Completed application form
- Passport copies of the proposed business owner/owners
- Two colour passport size photos of the proposed business owner/owners
You’ll also require the approval of the Road Traffic Authority (RTA). For this, your employees may require RTA training in order to gain accreditation with the UAE’s business laws for car rental business and passenger transport services.
Contact Trade License Zone to make use of their highly experienced specialists to guide you on every step of the process in applying for your trade license. It is as easy as telling us a little about your business and sending us the required documents to get your application process started.
Step #6: Applying for your Visa
When your trade license has been granted and you’ve applied for a new visa for yourself, you can sponsor visas for your spouse, other direct family members, or domestic worker to join you in Dubai. There is a caveat, though: the number of visas you’re eligible to sponsor is determined by the size of your car rental business, business structure, and your personal assets and personal money.
As with the trade license application process, the visa application process is straightforward. As company setup experts, we can help you complete all these steps successfully without costly errors or delays.
Car Rental Business Costs in Dubai, UAE
When you consider how to start a car rental business in Dubai, you need to consider the costs involved before you begin trading. You’ll need to factor in the cost of your trade license, your premises, the RTA authorizations, and the cost of your fleet of cars.
Once you’ve factored those costs into your business plan, and you apply for a business auto loan, business loan, business insurance, and rental contract, you’ll have a better idea of the car rental business costs in Dubai. If you select a Commercial Mainland trading license, your setup costs will range from AED 15,000 to AED 20,000.
However, to get an accurate cost of company formation, it is best to contact Trade License Zone. We can assist you with all documentation and applications, and make sure all approvals are in place with a company setup package that best suits your needs and budget.
Working with Trade License Zone
Business setup in the UAE is straightforward, but it remains a complex process – even if you think you know what you’re doing. When you partner with Trade License Zone, we will save you from unnecessary delays or rejections and make the entire process a streamlined one.
When you work with the specialists at Trade License Zone, all you need to provide is some basic documentation and a little information about the nature of your business. Then, sit back and let the experts take care of the rest – managing your trade license and visa applications, communicating with all relevant departments and authorities, and reporting back when you’re ready to trade. It really is that simple.