The nature of Dubai’s large expatriate population and global business destination means many people are in the emirate for short- or medium-term stays. Additionally, Dubai attracts many tourists here for weekend breaks or longer stays.
Together, this creates an opportunity for businesses to meet the needs of the emirate’s constant influx of visitors – and one thing most visitors to the UAE need is transport. Whether for business or pleasure, car rental is in high demand here, with total market volume expected to grow by 4.15% to USD 214.7m by 2029.
If you have the skills and determination to launch and grow a successful car rental business in Dubai, this article will help you on your way, covering all the key considerations.
How to start a car rental business in Dubai: step-by-step
Starting a business in a new jurisdiction can seem complex, but Creative Zone can simplify the process for you considerably. We’ll help you launch your new venture in just five simple steps.
Step 1: Decide on a location
The first key decision is where you will start up. When starting a car rental business in Dubai, you’ll need to take on physical premises – both an office and a lot or garage to house your fleet. Ideally, this should be in a built-up location or at a transport hub such as an airport or train station.
It is a good idea to make this decision early on in the process as it could impact the licences and permits you require to trade.
Step 2: Outlining your business activities
Next, you’ll need to clearly outline your business activities. Failure to do so can cause issues further down the line, and carrying out unlicensed activities may lead to fines or even license revocation.
Your stated activities must be chosen from the official list published by Dubai’s Department of Economic Development (DED). When starting a car rental business, the official DED activity is ‘Car rent and passenger transport’.
If you intend to do anything other than rent automobiles for short periods without drivers, you will need to add more activities to your license. The Creative Zone team will help ensure you have the correct approvals to run your business.
Step 3: Choosing your company name
The third step is equally important: choosing a company name. There are a few key things to keep in mind at this stage – many that would not apply anywhere else in the world.
Be aware that you must abide by a strict set of naming conventions. In short, you should avoid any offensive or blasphemous language. Avoid names of well-known organisations and avoid abbreviations if naming your company after yourself – i.e. Dave Mann Consulting, rather than D Mann Consulting. You must also check that your chosen name is available to register.
Step 4: Making your license application
To operate a car rental business in Dubai and the wider UAE, you will require a commercial license.
In addition to your commercial license, you will need approval from the Road Traffic Authority (RTA), and your staff may also be required to undergo RTA training.
Step 5: Making your visa applications
Finally, if you do not already have one, you will require a UAE visa to work here. Again, with the right guidance, the visa application process can be incredibly straightforward. Once again, the team at Creative Zone will guide you through this step.
As a UAE business license holder, you can sponsor others for their visas. This could be a spouse, parent or child, or a domestic worker such as a housekeeper. The maximum number of visas you can apply for will depend on the size of your company, your chosen setup and, for dependant visas, your personal earnings.
Documents required to start a car rental business in Dubai
When applying for your commercial license to start a car rental business in Dubai, you must submit the following documents along with your application form.
- Passport copy
- Visa copy
- A no objection certificate (NoC) from your current sponsor (if relevant)
- A copy of your commercial space rental contract
- Approval from Dubai’s Road and Transport Authority (RTA)
Benefits of starting a car rental business in Dubai
There are numerous benefits to starting a car rental business in Dubai, including:
Welcoming environment
Dubai is built for business. Its company formation and immigration processes are designed with simplicity in mind. The local economy is strong, and tax rates are low – 0% on personal income and 9% on taxable corporate profits above AED 375,000.
Thriving tourist industry
Dubai attracts over 15 million tourists every year. This creates a high and steady demand for ad hoc and temporary services such as car rental.
Premium audience
Many of Dubai’s tourists and temporary residents are known to enjoy the finer things in life. This generates more demand for higher profit margin services such as executive and luxury cars or pick up and drop-offs.
Large and growing talent pool
Dubai’s pull makes it possible to recruit staff from all over the world. This significantly widens your search when looking for the right talent to help launch and grow your business.
Repeat custom
With business travellers and permanent residents making frequent visits to the UAE, there is major potential to build a large and loyal regular client base through exceptional customer service.
How to scale a car rental business in Dubai
Diversify your fleet
One of the best ways to grow your car rental business in Dubai is to stand out from the competition. You can do this by offering a choice of vehicles that may currently be undersupplied. This could be premium or eco-friendly options such as EVs.
Offer transparent pricing
Car rental is notorious for hidden fees and expensive add-ons. Differentiate your business by offering fair, transparent and fixed pricing for your services. If customers know the price you quote is the price they’ll always pay, they’re more likely to come back to your business.
Go the extra mile
In a competitive field like car rental, customer service can be the difference between repeat custom and a bad review. Make life as easy as possible for your customers, include complimentary extras and add personal touches wherever possible.
About Creative Zone
Starting a car rental business in Dubai can be complicated, particularly if you’re new to working in the UAE. That’s why selecting the right partner is critical when looking to launch or grow a business out here. As the Middle East’s most trusted business setup advisor, Creative Zone has been empowering entrepreneurs and SMEs with comprehensive support since 2010. With a strong reputation for assisting businesses locally and globally, we offer a complete range of solutions for all your business setup needs.
When you work with us, you get fast, reliable and unbiased advice on your unique business setup requirements. We can help you choose the right kind of license for your business activity and take you through the entire process from start to finish.
We’re here to assist every step of the way. No matter your chosen activities, legal entity or visa requirements, we’re on hand with support, guidance and expertise. So, if you’re looking to lay the foundations for life in the UAE, Creative Zone is your ideal starting point.
Contact us today to kickstart your business in Dubai.
