With millions of tourists visiting Dubai annually, and a large population ready to step into the new world. There is one opportunity that no one seems to talk about: a car rental business in Dubai. According to media reports, the UAE car rental market is projected to grow to over $2 billion by 2025. And right now it seems like a golden opportunity for anyone to cash in, so we thought to create a comprehensive guide that outlines the steps to open a car business in Dubai, legal requirements, open a bank account, etc. Here is everything you need to know.
Also Read: A Comprehensive Guide : Cost of living in Dubai?
Why Start a Car Rental Business in Dubai?
I mean, why cars in the first place? Well, here is the reason.
- Booming Tourism: Believe it or not, but Dubai attracts over 20 million tourists annually, that’s a lot of people who need a transport medium for their daily commute.
- Expatriate Population: A major chunk of Dubai’s residents are expatriates who often opt for rentals due to high car maintenance costs, parking fees, and short-term stays.
- Business-Friendly Environment: The 0% income tax rate is just a cherry on top.
- World-Class Infrastructure: If you have not seen it, you have not seen it. Dubai has some of the world’s best extensive road networks.
- Diverse Market Needs: From budget-friendly cars to luxury vehicles, there is a market for every type of commuter in Dubai.
How Does Renting a Car in Dubai Work?
Renting a car in Dubai is quite a simple process, which is regulated by the Roads and Transport Authority (RTA). Here are the things that you need to keep in mind.
- Eligibility: Renters must be at least 21 years old, and must hold a valid driver’s license.
- Booking Process: Majority of customers book vehicles online or in person, so you need to figure out your booking process first.
- Vehicle Standards: Cars must not be older than two years, it should be insured, and equipped with GPS for safety.
- Business Role: business owners must provide well-maintained vehicles, a transparent contracts to its employee, and 24/7 customer support for any relatable issue.
Also Read: Open a Non-Resident Bank Account in the UAE- Complete Guide
How to Start a Rent a Car Business in Dubai?
Setting up a car rental business in Dubai is not as challenging as you think, however there are technicalities in setting up business in Dubai.
- Choose a Business Location:
- Mainland business setup: Allows direct trading across the UAE. Recent regulations permit 100% foreign ownership for car rental activities, eliminating the need for a local sponsor in some cases.
- Freezone business setup: Offers 100% ownership, 0% tax, and simplified setup in areas like Meydan Free Zone or Dubai Airport Free Zone, but may require a distributor for local market access.
- Select a Legal Structure:
- Sole Proprietorship: Suitable for small operations but limits visa sponsorship.
- Limited Liability Company (LLC): Ideal for partnerships, offering liability protection and flexibility for hiring.
- Register the Business:
- Choose a compliant trade name (avoiding offensive or restricted terms) and verify availability with the Department of Economic Development (DED).
- Apply for a professional or commercial license under activity code “7710001” (Car Rent and Passenger Transport).
- Secure RTA Approval:
- Obtain RTA permits, ensuring vehicles meet age and safety standards.
- Install SIRA-approved GPS tracking systems.
- Set Up Operations:
- Lease a minimum 150-square-meter office and garage space in areas like Al Quoz or Deira.
- Acquire a fleet of at least 10 vehicles, as mandated by RTA for the first year.
Also Read: UAE E-Channel System: Streamlining Immigration and Residency in 2025
Documents Required for Setting up Dubai Car Rental Business
- To register and operate legally, prepare the following:
- Proof of insurance for all vehicles.
- Passport and UAE visa copies of the owner(s).
- Ejari contract for office and garage space.
- No Objection Certificate (NOC) from a local sponsor (if applicable for mainland setup).
- Business plan outlining operations and financial projections.
- Completed DED application form for the professional license.
- RTA application form and vehicle registration documents.
Conclusion
Starting a car rental business in Dubai may turn out to be a profitable venture, driven by the city’s tourism, large residential population, and business-friendly policies. However, you must conduct a thorough market research, and must get necessary professional licenses to establish yourself. Here, Universes Consulting can help you build your brand in Dubai with great ease and compliance. With careful planning and execution, your car rental business is just one step away.