All about starting a rent a car business in Dubai
You think of a car and there is it, handsomely cruising down the roads in Dubai. The ‘city of gold’ is also popular for exotic cars and luxury on wheels. Therefore, if you are planning to set up a rent a car business in Dubai, you have certainly made a profitable choice.
The following blog will help you understand the nitty-gritty of how you can establish your rent a car business in Dubai. However, first one needs to know what the business is all about.
How does renting a car in Dubai work?
Car rental enterprises allow clients to rent out automobiles for short periods of time. However, the company does not provide drivers. People with licenses who do not own a car, visiting expats, and owners of damaged or destroyed vehicles which are awaiting repair can rent a car in Dubai.
Similarly, hourly car rental firms engage in renting out vehicles on an hourly-basis. These can be booked via online platforms as well as smart applications on mobile phones.
The companies that rent a car in Dubai strategically place the vehicles in locations across the city which are convenient for the clients to access to pick up their rented car and drop it off. Thus, the customers can easily reserve a vehicle of their choice for the period of time they desire.
However, if you are to run a rent a car business in Dubai, you must ensure that the lessee drives according to your instructions and returns the vehicles in due time and in the same condition as it was when rented out. A pre-paid deal would also work in your favour.
Why should you set up a rent a car business in Dubai?
According to the latest statistics published by World Population Review, around 3 million people reside in Dubai as of 2021. Out of this, 85% people are non-citizens. Below are some of the reasons why they are likely to prefer to rent a car in Dubai:
- Time saver: The public transportation network provides smooth and convenient commute to most parts of the city. However, there are certain limitations such as meeting strict work timings during rush hours or planning quick trips to the other Emirates. Therefore, people often choose to have control over their commute timings.
- Less formalities: Foreigners also find it easier to rent a car in Dubai to dodge excessive paperwork, which comes with buying one’s own car. Another tedious task could be looking around for spare parts when any repair or modifications are required or desired. This is not the case with rented four-wheelers.
- Minimum investment: Having one’s own vehicle means paying for insurance renewals and maintenance. Thus, people would rather rent a car in Dubai than buy one.
You can now have 100% ownership of your business
Previously, one would require partnering with an Emirati sponsor to establish any rent a car business in Dubai. This meant that the entrepreneurs would have to form a Limited Liability Company in Dubai.
Now however, the Department of Economic Development provides professional or service license for rent a car business in Dubai. You will still require a local service agent for judicial formalities.
Procedure for setting up rent a car business in Dubai
If you are in the UAE, you need to prepare these documents for starting a rent a car business in Dubai:
- Passport copy
- Emirates ID (EID) copy
- Visa page copy
- A no objection certificate (NoC) from your current sponsor
- A copy of your Ejari (commercial space rental contract)
- An undertaking from Dubai’s Road and Transport Authority (RTA)
How can you get the RTA Approval for your business?
For carry out a rent a car business in Dubai, you need to get the RTA’s heads up by proving the following:
The date of manufacture of the vehicles shall be of the same year in which the registration application submitted or shall not exceed 24 months from the date of registration application.
Below vehicles are exempted of such requirements:
- Luxury cars or vehicles that are priced above AED600,000, provided that the date of manufacture does not exceed four years in the same year. The value of vehicles should also be substantiated with official documents.
- Classic vehicles which are older than 30 years, in accordance with the requirements specified by Vehicles Licensing Department (VLD).
- Vehicles that have not been used at all.
2. Provide at least 10 vehicles in the first year
3. Insurance of all cars
4. Allocate parking spaces
Cost breakdown of steps involved in setting up rent a car business in Dubai:
|LSA Agreement||AED900 (approx.)|
|Ejari||Depends on the commercial space rented|
|Final submission of documents at DED||AED8,500 (approx.) if the trade name is non-Arabic|
Consult with corporate advisors
Shuraa Business Setup comprises a team of experienced business consultants, public relations officers (PROs) with key connections at the government agencies, VAT and tax experts. The team can assist you and even do the leg work required for setting up your rent a car business in Dubai.
To book a FREE consultation with one of our corporate legal advisors, call on +971 44081900. You can also chat with us by sending a WhatsApp message to +971 501287254 or drop an email to [email protected]