How to Start a Car Rental Business in Dubai, UAE

How to Start a New Car Rental Business in Dubai?

There are several compelling reasons for company formation in Dubai. Everything about it, including its 0% tax rate and advantageous location, is well known. However, there are a few additional factors that make Dubai the ideal place for beginning a car rental business. There is a sizable ex-pat community in the Emirate who may not want to buy a car while living in the UAE, preferring to use public transportation for everyday errands and rent a car for longer journeys. Another factor is the growing number of tourists visiting Dubai, which has grown by about a million each year and is predicted to reach 20 million this year. The majority of these guests will need a car to travel around and are willing to pay for the service.


As of 2021, approximately 3 million people were living in Dubai, according to the most recent numbers released by World Population Review. About 85% of them are non-citizens. They may like renting a car in Dubai for many reasons like less maintenance, accessibility, less time, availability, less formality, etc. The enormous and expanding automobile rental sector in the emirate is caused by all of these elements and more. The market for leasing and renting cars in the UAE was valued at USD 1.8 billion in 2018. This is anticipated to rise to USD 2.5 billion by 2023. Interesting, huh? Then continue reading to learn how to start a car rental company in Dubai. Contact A&A Associate to know more.


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How Does Car Rental Operate in Dubai?

Customers can rent out cars from car rental companies for a limited time. However, the business does not offer drivers. In Dubai, those with licenses who do not own a car, foreign visitors, and owners of damaged or totaled cars who are waiting for repairs can all rent a car. These can be reserved using web channels and sophisticated mobile phone applications. The car rental businesses in Dubai carefully arrange the automobiles in areas of the city that are easy for customers to reach to pick up and return their hired car. Customers can conveniently reserve their preferred vehicle for the time frame they want as a result. To operate a car rental business in Dubai, you must make sure that the lessee follows your instructions and returns the vehicles on schedule and in the same condition as when they were rented out. A pre-paid agreement would also be advantageous to you. Keep in touch with us for every inquiry.


Why Should Start a Car Rental Company in Dubai?

Here A&A Associate gives you the reasons why you should start a car rental business. A few reasons are listed below:


  • Time saver: 

The city’s public transit system makes it simple and convenient to get to most of the city. There are some restrictions, though, such as having to adhere to rigid work schedules during peak hours or organizing brief excursions to other Emirates. As a result, many people opt to set their travel times.


  • Less paperwork: 

Renting a car in Dubai is also simpler for foreigners who want to avoid the heavy paperwork associated with purchasing their vehicle. Searching for spare components whenever a repair or change is needed or wanted can be a tiresome process as well. With four-wheelers that are rented, this is not the case.


  • Minimum investment: 

Owning a car requires paying for maintenance and insurance renewals. As a result, renting an automobile is preferred over buying one in Dubai. Connect with to know  about setting up a business in Dubai


Read here to know about how to own a business in Dubai


Steps To Start a Car Rental Company in Dubai

Starting a car rental business in Dubai is simple from beginning to end if you engage with professionals like A&A Associates that specialize in business setup.


  • Step 1: Decide the location

You will need to invest in physical space when launching a car rental company in Dubai, including an office and a lot or garage where you can keep your fleet. This should ideally be near a city or a major transportation center, like an airport or train station.

You can choose between being on the mainland or in a free zone. While free zone setup is frequently more affordable, keep in mind that in order to conduct direct business with the UAE market, you would either need to create a branch or work through a distributor.

Read about freezone and mainland locations


  • Step 2: Describe your company’s operations

Outlining your business operations in detail is crucial when beginning a UAE company. Failure to do so may result in problems down the road, and engaging in unlicensed activities may result in fines or possibly the cancellation of a license.

The official list of your specified activity must be selected from the Dubai Department of Economic Development (DED). The DED activity for founding a car rental company is “Car rent and passenger transport.” You are allowed to “…hire cars for brief periods of time, without drivers…,” according to this activity.


  • Step 3: Choosing a name for your business

The third step, selecting a company name, is similarly crucial. At this point, there are a couple of important considerations that are unique to our situation. You must adhere to a rigid set of naming rules, so be mindful of that. Simply put, you must refrain from using vulgar or unpleasant words. When calling your firm after yourself, stay away from acronyms and names of well-known organizations.


  • Step 4: Applying for a license

You will need a commercial license to run a car rental business in Dubai and the rest of the UAE. You must submit the following items when applying for your license: a completed application form, a copy of the proposed owner(s)’ passport, and two passport-size colored pictures.

Additionally to your business license, you will require the Road Traffic Authority’s blessing (RTA). RTA training might also be necessary for your staff.


  • Step 5: Making your visa applications

And finally, in order to work here, you will need a UAE visa if you do not already have one. Again, with the appropriate direction, the visa application procedure can be very simple. The majority of business formation agents can assist you with both this phase and your licensing application. If you have a business license from the UAE, you can also sponsor the visas of others. This could be a household helper like a housekeeper or a spouse, parent, or child. Your ability to apply for a certain number of visas will be influenced by the size of your business, the setup you have chosen, and, in the case of dependent visas, your financial situation.


Documents Needed to Start a Car Rental Business in Dubai

The following paperwork must be ready if you are in the UAE and want to start a car-rental business setup in Dubai:

  • Copy of passport
  • Visa page copy
  • Emirates ID (EID) 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)

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What does It Cost to Launch a Car Rental Business in Dubai?

Starting a car rental business in Dubai is very expensive. The cost of the license, the lease on your property, and any RTA approval fees are all additional costs. You also need to think about how much your automobiles will cost. Although the size of your fleet is entirely up to you, most respectable businesses have at least ten vehicles. These can either be leased or acquired outright. It is impossible to provide a general estimate of the cost of starting a car rental business due to the wide variations among them in terms of size, location, and level of service. Contact us for any questions.

However, some prior understanding of the procedure is necessary. Furthermore, it is crucial to keep in mind that the application procedure is only simple if your license application is finished and error-free at the time of submission. Working with a company formation expert like A&A Associate will assist you to make sure that this is the case, we assure you that we are the best company formation consultants in Dubai. We are a group of experts in company formation that are passionate about helping ambitious business owners realize their dreams. For any information, contact us at +97142690673 or via email at [email protected].

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