The car rental industry in the country is expected to cross over $174 million in 2025. The growing tourist and resident population makes this a great industry for entrepreneurs to tap into and start a car rental business in Dubai.
Why Start a Car Rental Business in Dubai?
Dubai is a highly popular tourist spot. There were almost 10 million people visiting Dubai in the first half of 2025. And most of these tourists would want to rent a car to explore more of the city and the rest of the country.
These are some of the benefits of a Dubai car rental business setup:
- A growing number of customers: Tourism is on the rise, and so is the expat population. Both groups of people are target markets for car rental businesses.
- High demand for cars: You should offer both luxury cars and more economical options to appeal to a wider customer market.
- A business-friendly environment: Dubai has a low corporate tax of 9% and no income tax. There is also less red tape around company registration in the UAE.
Steps to Start Car Rental Business in Dubai
You need a car rental license in Dubai to legally start a car rental company. Working with a business consultant can streamline the process and help you avoid delays in starting your business.
1. Develop Your Business Plan
- Your target customers (tourists, locals, corporate clients)
- Types of cars you plan to offer (luxury, economy, SUVs)
- Cost breakdown (pricing model and packages)
- Marketing strategy
- Maintenance and insurance plans
Having a business plan is also necessary to get initial approval from the relevant licensing authority, as it is one of the documents you need to submit with your application.
2. Decide Between Free Zone and Mainland
- Pick a name for your business that is compliant with the UAE’s naming rules.
- Choose the correct business activity.
- If you’re setting up in a free zone, you can choose between legal structures like FZE, FZCO, and a free zone branch company.
- If you’re setting up on the mainland, you can choose between legal structures like sole establishment, LLC, partnership, and a branch company.
- Dubai free zone companies can now trade with the mainland with a permit from DET (Department of Economy and Tourism)
3. Get Initial Approval
- You should get initial approval from the DET for a car rental company formation in the Dubai mainland.
- Free zone companies have to apply with the relevant free zone authority.
- Every application submission has to contain a business plan, owner’s personal identification documents, and an NOC from your current sponsor.
- You can only apply for a trade license after you get initial approval.
4. Find a Physical Office and Fleet Parking
- You will need to find an office space that also has parking space for your rental cars.
- Your office has to comply with the RTA’s (Road and Transport Authority) guidelines.
5. Apply for Car Rental License
- Submit your application and pay the fees to get a car rental license.
- Make sure you follow the RTA’s guidelines.
- Once your license is issued, you can sponsor visas and hire employees.
6. Acquire Your Fleet
- You have the option to lease pre-owned vehicles or rent new vehicles.
- Car rental businesses can also work with private contractors to use their vehicles.
- The RTA is in charge of licensing the vehicles you use for your business.
Requirements for Car Rental Business in Dubai: The Essential Documents
- Passport copy of the owner(s)
- Emirates ID (for residents)
- Trade name reservation certificate
- Initial approval confirmation
- Office and parking space contract
- Tenancy contract (Ejari)
- RTA approval and compliance documents
- Memorandum and Articles of of Association (if necessary)
- Certificate of Incorporation (if necessary)
RTA Rules for Car Rental Licenses
- Carry out only the specific activity listed in your license.
- Set up a proper office, have enough vehicles, and provide suitable parking based on your business activity.
- Train your staff on how to use the electronic rental systems.
- Install a GPS tracking system approved by the Security Industry Regulatory Agency (SIRA).
- Do not place promotional stickers or ads on vehicles without RTA’s written approval.
- Comply with all approved vehicle inspection requirements.
- Use only the parking spaces approved by RTA and other relevant authorities.
- Renew the tracking system installation certificate every year.
- Report any failure in your digital systems within three hours.
- Do not rent out vehicles by the hour.
- Avoid operating during restricted times or in restricted locations as specified by authorities.
What is the Cost of Car Rental Business Setup in Dubai?
You can expect to spend upwards of AED 15,000 on your car rental license in Dubai. Other costs include:
- RTA approval fees (AED 2,000 – 6,000)
- Cost of office rent and parking (AED 25,000 – 50,000/year)
- Vehicle purchase or lease (AED 40,000 – 120,000/vehicle)
- Insurance and maintenance costs (AED 5,000 – 10,000 per vehicle/year)
Essential Tips for a Successful Car Rental Business
- Offer a variety of vehicles so you can meet the needs of different customer types.
- Start with a manageable fleet and expand only when you see consistent demand from your target market.
- Choose fuel-efficient, reliable vehicles. This can help you reduce running and maintenance costs over time.
- Make it easy for customers to make a booking by building a good, functional website.
- Renew your trade license and RTA approvals on time.
- Promote your business on social media, through online ads, and by partnering with local hotels or agencies.
- Encourage happy customers to share their reviews and leverage their feedback to continuously enhance your service quality.
Get a Car Rental License in Dubai With A&A Associate
Looking for business setup in UAE? A&A Associate offers expert business setup services by consultants who can handle the entire company formation process. We can help you get initial approval, apply for a license, and open a bank account.
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