We all want a pair of wings to fly from one place to the other! And who knows one day we’ll have one, but for the time being, wheels aren’t any less! Especially in Dubai, where roads are a treat for the senses (literally!). Born with a silver (or should we say golden!) spoon in its mouth, the ‘city of gold” is also infamous for exotic cars and extravagance on wheels. At present, about 40% of the UAE’s 3.5 million cars can be seen breathtakingly cruising down the handsome roads of Dubai. No wonder, the most glamorous city of the UAE has more cars per capita than New York and London. I mean, think of a car, and it is there, maybe in the parking lot right in next to your house!
Whether for the daily to-fro office trips, business meetings, long trips with a girlfriend, shopping with kids, taking your doggo to the vet or weekend barbecues with friends, a car is the most convenient and preferred means of transport in Dubai or any other emirate of the UAE. But unfortunately, or fortunately, not everyone owns a car in Dubai. So, if you are wondering about starting a car rental business in Dubai then you’re in luck as the city has no dearth of car enthusiasts, one! And two, most expats in Dubai, despite the availability of cars at affordable prices, are reluctant to maintain a car for myriad reasons, such as rising fuel prices, expensive parking, costly upkeep, insurance, regular cleaning and other hassles. I am sure, this blog will help you understand the process of setting up a car rental company in Dubai. Let’s get started and have those engines revving!
Why setting up a rental car business in Dubai is worth it?
Dubai is a small city but a great business hub. Sumptuous luxury, cutting-edge facilities, archaic appeal, strong tourist mass, and the whole nine yards, there’s a long list of attractive reasons why Dubai is the perfect spot to start a car rental business. Let’s look at some other justifications for why your car rental company formation will pay you off handsomely:
- The automotive sector in Dubai is one of the most profitable sectors in Dubai for plenty of reasons
- Car rental companies in Dubai are able to serve their rides to customers at a competitive rental fee complemented by fatty discounts and affordable daily, weekly and monthly car hire packages. 24/7 emergency assistance, free delivery & pick-up are the other benefits the Dubai-based rental car providers offer to their consumers
- The industry is getting innovative. There are car-sharing service providers in Dubai, such as U-Drive, that charge car rentals by the minute. Just register for free on their app, find the car nearby, unlock it using your phone, and it’s all yours
- Although the public transport system in Dubai is mind-blowing, still they do not reach all the destinations
- Dubai, around the year, is swamped with international tourists, holding valid international driving licence hoping to rent a car to reach their destination effortlessly without changing 2 or 3 public vehicles or getting ripped off by the taxi fares
- A car rental fee is way cheaper (as low as AED 30/day) than taxi fares here, that’s why the car rental business in Dubai is always at its peak
- Restricted public transportation choices in most areas
- Boasting a world-class road infrastructure flanked with jaw-dropping skyscrapers as far as the eyes go, Dubai is tempting to driving-lovers and wanderers
- 90% busy birds of passage from worldwide on their non-stop ambitious career journey
- Scorching heat 365 days and relatively low fuel prices!
- A huge customer base because residents/expats (with 21+ age and a valid driving licence) choose to rent a car instead of buying their own for all good reasons such as affordability, variety, effortless process, and high level of comfort as well as convenience compared to public transport, etc.
- The easy and quick business formation process with minimal formalities
- 100% ownership of your car rental business on the mainland is possible now. However, you are required to engage a Local Service Agent for an annual service fee as part of the mandatory requirements to fulfill to acquire a service/professional trade licence in Dubai, UAE.
Steps to Start a Car Rental Business in Dubai
Setting up a company in Dubai is a cakewalk if you are aware of the UAE rules and regulations and the process of business formation. You have to gather the required documents and take the right decisions every step of the way, which can be time and money-consuming at times. However, hiring an experienced company setup advisor in Dubai such as Adam Global can be a great idea if you want to save your valuable time, money and energy. Working with them means you don’t have to jump through hoops to set up your dream company, but they will. And since they are experts in the field, the process of starting a car rental company in Dubai would be a lot easier, quicker and affordable from start to finish.
Finalise your car rental location
To accommodate your car rental business in Dubai, you’ll need a perfect commercial property that has enough room for your office and garage to park the fleet, either in the mainland or the free zone. Better if you can find the place in proximity to a built-up location or at a transport junction such as an airport or train station. If you are opting for a Dubai free-zone, you may be required to open a branch or involve a distributor to deal directly with the local market.
Arrange appropriate fleet to lease
Your choice of vehicles for the fleet hugely depends on the clientele you want to target. For instance, if you want to lure tourists, you want to keep high-end luxury cars in your inventory. On the other hand, if you are intending to serve corporate professionals, you want to house standard and affordable cars. You may also want to keep a mixed bag of all car types, so you have a car to suit all occasions and budgets of the clients, whether they need an economy car, luxury car, or an SUV. The upkeep of the fleet you lease is your responsibility, signing up for a service agreement with a maintenance company can be a great idea.
Outline your car rental business activities
You must clearly define the business activities you want to carry out under the trade licence of your car rental business in Dubai to steer clear of hefty fines or other consequences of non-compliance with the permissible activities, such as licence cancellation. For the car rental business, the authorised DED-approved business activity is ‘Car rent and passenger transport’. You may refer to the official list that the Dubai Department of Economic Development (DED) while picking your activities or simply connect with one of the best business formation consultants in Dubai, such as Adam Global.
Decide on a unique and suitable business name
Now comes the most interesting yet onerous step – getting DED’s approval on the chosen name of your car rental business in Dubai. The task is easy if you abide by the naming conventions of the UAE. Just think of at least three names that suit the personality of your business and the country’s values, without copying the names of other already existing companies in the industry. Simply put, you can’t use names that are taken already and contain any derogatory or hurtful terms to ensure it is eligible to register. And if you are naming your Dubai-based car rental business after yourself, sidestep abbreviations.
Apply for the professional trade licence with DED
To establish and run a mainland car rental company in Dubai, you need a commercial licence that DED dispenses. Submit to DED an online application complete with all the required details and attachments to obtain one. Below is the list of documents that are required for a car rental business licence in Dubai:
- Duly filled-in application form
- 2 coloured passport-sized photographs
- Valid visit or residence visa for partners
- Preliminary approval of the licencing authorities (Dubai Economy – Free Zones)
- Copies of the partners’ passports
- Emirates ID of citizen partners (if applicable) or passport in case the citizen doesn’t have identification papers
- NOC from the sponsor in case the partner is a non-GCC citizen
- Undertaking to abide by the conditions and requirements related to the requested type of activity
- Approval of other governmental bodies for some business activities (check the table in the Terms and Conditions section).
- A letter from the Road Traffic Authority (RTA) bearing their consent
Furthermore, your employees may also have to undergo RTA training.
Apply for visas
You may skip this step if you already have a UAE visa to work, there will be no issues in establishing a business in Dubai. If you don’t have any, apply for one. You can also take professional assistance from visa service agents in Dubai or your business formation specialist in Dubai to get the visa at the earliest. In case you bear a UAE business licence, you can sponsor others for their visas as well. Those could be your parents, children, spouse, or domestic help. Be informed that the maximum number of visas you can apply for depends on the size of your car rental company.
Promote your car rental business in Dubai
Grabbing the eyeballs of the target audience is the most difficult phase for a new business in a saturated market. So once your Dubai car rental company formation is complete, your first and foremost move must be marketing. Because before you, there are a large number of companies in Dubai that are already serving the community you have your eyes on. Fret not, the demand for rental cars is still huge in the emirate and car users turn to the company that offers the best deals. You are at the initial phase of your rental car business in Dubai, and adding value to your potential customers through various introductory offers and benefits can work like a charm! For instance, attractive discounts on the first ride, free rides, free kilometres, free fuel, etc. So, giddy up with an immaculate marketing strategy and deep pockets to stand out in the crowd.
The Cost of Starting a Car Rental Business in Dubai
There are several factors that influence the cost of incorporating a car rental company in Dubai, especially your preferences, budget, requirements and goals. The overall cost of establishing a car rental company in Dubai mainland can easily surpass the figure of AED 80,000. In addition to the costs incurred in obtaining the trade licence, commercial rental/lease charges and the expense of arranging any documentation and authorizations required by the RTA, there are so many other things as well you have to consider. For instance, the number of vehicles you want in your fleet. You may calculate the overall cost considering the rental/lease/purchase cost of at least 10 vehicles, initially, which is the common fleet size for reputed companies to kick off.
Giving you the exact information, you might be looking for before starting a car rental business in Dubai is nearly impossible without meeting you in person. With the help of this post, we have just tried to explain how you can install scaffolding around your dream company. To be able to enlighten you about car rental business formation in Dubai in a precise way, we need to know your requirements, first thing. So that you (or we) can establish the company block by block! How about booking a free consultancy with one of our expert Dubai business advisors!
Meet your car rental business setup expert in Dubai…
At Adam Global! We strongly believe that “what starts well, ends well”, in business at least! And you want some expert assistance in the beginning, if not later. Without a doubt, Dubai is on the bucket list of millions of people in the world, and with an increasing number of tourists visiting every year, your rental business is sure to succeed, provided you make the right decisions and avoid costly mistakes – right from choosing the site for your company in Dubai to hand-picking the business activity or licence to deciding the legal form of the company. And that’s where an experienced business setup consultancy, like ours, helps you.