Dubai is known for its state-of-the-art infrastructure, diversity and equal employment opportunities. It is fully equipped with all the facilities that make a city world-class and more. Often termed the futuristic city, Dubai is a paradise for investors – both local and foreign. The real estate market, import/export and healthcare firmly hold their position as the most lucrative businesses but others are not far behind. The Automobile market, for instance, is considered one of the viable options for comparatively low-investment businesses. Speaking of the automobile business, it is a good option to start a car rental business in Dubai.
Car Rental Business in Dubai
Dubai is a top tourist destination for people around the world. Millions of people visit the city every year and they require transportation for exploring the city. Although public transport in Dubai is one of the best in the country and covers the whole of the city, people also prefer to rent cars. With rental vehicles, people have the leverage to make as many stops as they want and extend their stay at places they find interesting. Additionally, the city is also known for hosting major auto events like Automechanika Dubai 2021 and many more, making it a hub of motorsports.
Luxury vehicles and sports cars are not an unfamiliar sight in Dubai and many car rental services offer advanced vehicles for rent. Apart from tourists, locals also rent a car in Dubai for the airport and hotel pickups, making grand entrances at events and for many other reasons. People, at times, even opt for long-term rentals instead of purchasing a car. If you decide to start a car rental business in Dubai, you can expect a good audience for it.
How to Start a Car Rental Business in Dubai
A large number of expats and tourists who might opt for rental vehicles instead of buying a new one makes it a viable option to start a car rental business in Dubai. Furthermore, zero percent income tax makes it more intriguing. Listed below is the process you need to follow and the required documents to start a car rental business in Dubai:
SELECT THE LOCATION
The first step to starting a car rental business is to decide on a location. Ideally, for rental car business, you would want a space big enough to accommodate the large fleet of vehicles. You also have the option to choose between the mainland and the freezone. While free zones are a cost-effective option, you may have to use a distributor or open a branch to trade directly within the Emirates market.
DEFINE YOUR BUSINESS
It is an important step if you have decided to start a car rental business in Dubai. You must thoroughly define the services you will offer. Failure to do so can result in hefty fines. You are not allowed to offer unlicensed services within the city. The services can be selected from the list available on the official website of the Department of Economic Development (DED). DED Dubai has all the information you need to define your business activities. By selecting the right services for car rental, you will be eligible to rent vehicles within the city.
SELECT A COMPANY NAME
There are a few things to keep in mind when selecting a company name in the Emirates. The use of offensive or blasphemous language is prohibited. Additionally, the names of well-known organisations and abbreviations should be avoided. It is advised to make sure that the company name has not been previously registered. This can help you avoid further inconvenience.
APPLY FOR A LICENCE
You must have a business licence to start a car rental business in Dubai. There are different types of business licences in Dubai for you to choose from as per the nature of your business. Apart from the business licence, you also need approval from the Road and Transport Authority (RTA). Additionally, your business staff may also be required to go through RTA Dubai training.
DOCUMENTS REQUIRED TO START A CAR RENTAL BUSINESS
Following is a list of documents you need to be eligible to start a rent-a-car business in Dubai:
- Copy of Emirates ID
- Copy of Passport
- Copy of Visa page
- No Objection Certificate (NOC) from the current sponsor
- Copy of Ejari Dubai contract
- Undertaking from RTA
For the undertaking from RTA, the date of registration of vehicles should be of the same year or must not exceed 24 months from the date of the registration application. You must also provide at least 10 vehicles in the first year with allocated parking space. All the vehicles available for rent should also be insured.
OTHER CONSIDERATIONS
A UAE visa is a must to start a car rental business. If you do not have one, you should apply for it to carry out business in the city. Additionally, with a UAE business licence, you can sponsor others such as a spouse, children, maid or workers for visas. The vehicles you use for your business should also be well-maintained and safe to drive.
COST OF STARTING A RENT-A-CAR BUSINESS
The perks of a rental car business can be intriguing, but you should consider the costs too. You must pay the charges for getting a business licence, leasing the space, rental contracts, insurance, and the approvals attained by RTA. You must also consider the cost of vehicles which can vary on the types of vehicles you offer in your fleet.
The cost details are listed as follows:
- Business Licence – The cost of small business licence can vary from 8000 AED to 10,000 AED
- EJARI contract – Ejari contract fee can vary depending on the size and value of the property
- Name approval – 600 AED, 10 AED each for knowledge and Innovation fee
- RTA car rental service fee – 1000 AED, 10 AED each for knowledge and Innovation fee
Once the business is up and running, there is the cost of vehicle maintenance and monthly rent. The rent may vary depending on the size of the property and the location. The visa sponsorship charges should also be considered, depending on the number of visas applied for.
This was everything you needed to know to start a car rental business in Dubai. The city of gold offers ample opportunities to all, and a car rental business can be a good option. You must fulfil the car rental business requirements to avoid any conflicts with the law and run your rent-a-car business smoothly.
Furthermore, used cars are also a feasible option and you can add some to your fleet if they meet the registration year requirements. Browse through these used cars for sale in Dubai and select from a wide variety of the latest models listed.
Stay tuned to UAE’s top auto blog for auto business guides and more.
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