How to establish car rental services in Dubai?

Car rental services in Dubai are a popular choice for entrepreneurs targeting the city's large expat population and growing tourist base. These services cater to a wide audience by offering daily, weekly, monthly, and yearly rental options, as well as lease contracts.

Car rentals provide an obvious advantage to corporates and expats as they come with a zero maintenance package. Companies and individuals can avoid yearly payments for vehicle renewals and insurance, as all overhead costs are taken care of by the service provider. This makes it economical for companies to use car rental services for their employees and business travel needs.

The demand for car rental fleets is also growing in the hospitality sector, where they are used for transporting guests, arranging personal tours, and airport pick-up and drop-off services.

When it comes to starting a car rental business in Dubai, the Mainland LLC company set up is the only choice. It allows for easy expansion by adding more branches across the UAE and handling large fleet operations. Car rental service providers can choose a fleet that caters to the wide audience base in the UAE. Corporate clients and expats often prefer budget-friendly vehicles, while luxury cars and SUVs cater to those willing to pay more. This diversity allows car rental companies to target a broad range of customers with specialized rental services.

To start a car rental business in Dubai, several steps need to be followed. Firstly, the company must obtain approval from the Roads & Transport Authority of Dubai and be registered with the Department of Economic Development (DED). A physical office space with sufficient parking and maintenance areas for the fleet is also required.

Local sponsor is not anymore required, so foreign entrepreneurs can have 100% company ownership. 

Obtaining trade name approval from the DED and a No Objection Certificate from the RTA are also necessary. The car rental business should be classified under the activity code 711105 for "Car Rental and Passenger Transport" and obtain a commercial license.

Choosing the right location for the business is crucial, considering the target audience's proximity to the office. Additionally, the entrepreneur must submit the required documents, such as completed business application forms, passport copies, photographs of shareholders, RTA approval, and tenancy contracts.

Once the necessary documents and fees are submitted, the DED will issue the business license, allowing the car rental company to officially launch its operations in the UAE. The investor can then apply for a UAE residential visa for themselves, their family, and employees, depending on the leased office area.

The cost of starting a car rental business in Dubai includes the commercial mainland license fees, which range from AED 15,000 to AED 20,000, excluding office rental/leasing costs. Additionally, there is a significant capital investment required for acquiring the fleet of cars, with a minimum of 10 cars needed to sustain the business. Overhead expenses, including fleet maintenance, office rent, parking management, employee salaries, and marketing expenses, should also be considered.

Having thorough market knowledge and experience in the field of car rentals is crucial for success. Building long-term contracts with employers and expats can help achieve business sustainability faster, as the current market players cannot meet the growing demand for car rentals in the UAE.

To learn more about the setup procedures for a car rental service company in Dubai, consult with our business setup advisors.