Car Rental Services in Dubai is a popular business choice for many entrepreneurs trageting . Dubai has a large ex-pat population and a growing tourist base every year.
To cater to this audience group, Car Rentals in Dubai offer daily, weekly, monthly & yearly rentals and lease contracts accordingly.
Obvious Advantage for Corporates and Expats from Car Renting
The attraction for Car Rentals among corporates and individuals is that it comes at a Zero maintenance package. Also, there are no yearly payments for vehicle renewals or insurance.
All the overheads are all taken care of by the service provider and it all comes at relatively low monthly installments. It is economical for companies to use car rental services in Dubai for their employees and business travel purposes.
Car Leasing or Renting allows companies to not spend on depreciating assets, eliminate the spending for maintenance, renewals, etc., and keep the overhead expenses low.
Also, there is a growing demand for car rental fleets from the hospitality sector for transporting guests and for arranging personal tours, airport pick & drop, etc.
Why is the Mainland of Dubai the Ideal choice for Car Rental?
To expand the Car Rental Business easily by adding more branches across the UAE and handling large fleet operations, the mainland of Dubai is the ideal business jurisdiction to start.
The Car Rental Services company can choose its fleet to cater to the wide audience base in UAE. The corporates mostly prefer budget-friendly vehicles to rent, the same is with ex-pats who are looking for a vehicle to commute to their workplace in UAE.
The tourist and ex-pats who are ready to pay more have options to choose the Luxury Cars and SUVs. So, Car Rental companies have a huge target audience to cater to through specialized car rental services.
How to Start a Car Rental Business in Dubai?
1. Applying for the Commerical License & RTA Approval
Car Rental Service Companies must have approval from the Roads & Transport Authority of Dubai for smooth functioning.
The company must be registered with the Department of Economic Development (DED). The car rentals must have physical office space with ample parking space and maintenance areas for their fleet.
2. Finding a Local Sponsor for Opening an LLC Company
To start a Car Rental Service, the entrepreneur must partner with a local UAE national and prepare a shareholding agreement stating 51% of share ownership by the UAE national and the rest 49% with the entrepreneur.
3. Trade Name Approval from DED & No Objection Certificate from RTA
Now get the trade name approved, and submit the passport copy and tenancy contract along with the shareholder agreement to the DED for issuing the license.
Also, a No Objection Certificate from RTA must be submitted to DED to issue the business license.
Activity Type and Scope as per Department of Economic Development, Dubai
Name: Car Rental
Activity Code: 711105
Activity Group: Car Rental and Passenger Transport
License Type: Commercial
Activity Description: Rent a car license in Dubai enable a firm to rent automobiles for short periods; that is without drivers, to people who do not have their car. Also, travelers who are out of town, or owners whose car is damaged in an incident and are waiting for repair.
4. Choosing the Right Location
Choosing the location is important for the success of the Car Rental business, depending on the target audience, being closer to their living area, workplace, or hotel apartment is ideal, however, the yearly rent in such areas might be high.
Also, ensure the office space you take has ample space for parking to house your fleet.
5. Documents Required for Car Rental Business Application at the DED, Dubai
The entrepreneur must apply for a commercial license to successfully run their car rental operations in the UAE.
Following Documents Are Required for Applying for the Car Rental Business License:
- Completed business application form from DED
- Passport Copy & photograph of the Shareholders
- Approval from the Road Transport Authority
- Office Details and Tenancy Contract (Ejari)
- Training Completion Certificate (Staff must undergo RTA Training)
6. Obtaining the Business License from DED
Once you submit the required document and pay the fees, the Business License will be issued from DED, Dubai. Now you can officially launch your Car Rental business in UAE.
Also, the investor of the car rental company is eligible to apply for a UAE residential visa for him, family, & employees. The maximum number of visas available will depend on the office areas leased.
What is the Cost of Starting a Car Rental Business in Dubai?
The cost of a Commercial Mainland License with one visa cost, labor card, etc., is approx. around AED 15-20K, excluding the Office Rental/Leasing cost.
Apart from the business setup fees, for a car rental business specifically, there is a significant capital investment required mainly for acquiring the fleet of cars.
A minimum of 10 cars is required to sustain the business. The fleet could be owned or leased accordingly by the investor.
Overhead Expenses for Car Rentals – Fleet Maintenance, Office Rent, Parking Management
It is impossible to eliminate the cost of fleet maintenance. The fleet will require periodic maintenance works.
Followed by that would be the rent for the physical office, parking for the fleet, employee salary, office equipment, marketing expenses, and many more,
Again, having a thorough market knowledge and experience in the field of Car Rentals will enable entrepreneurs to easily scale up their business through the enormous networking opportunities in the UAE.
A long-term contract with employers and ex-pats would help in achieving business sustainability faster. Currently, the current players cannot meet the growing demand for car rentals in UAE.
To know more about the Car Rentals Service company setup procedures in Dubai, talk to our expert business consultants
Contact: Aurion Business Consultants