Dubai has long been known as a major international hub for innovation and business. The automotive industry in Dubai is one of the many profitable domains in the Emirate that stands out due to its wide range of prospects. With the nation’s affluent population and inflow of tourists throughout the year, there is a high demand for all kinds of cars. This is another reason why it is a great time to start a car business in Dubai. With its booming used car markets and imports of luxury cars, the city is ideal for aspiring businesses. This blog gives a detailed overview of starting a car business in the city.
Why Start a Car Business in Dubai?
Dubai is home to numerous car dealerships, showrooms, and rentals that have a variety of cars, ranging from high-end models to more affordable alternatives. Let us look at some of the reasons to start a car business in Dubai:
- The strategic location makes it a global trade hub connecting Asia, Europe, and Africa.
- High demand due to increase in expat population and tourists in the city.
- Demand for premium cars due to the high number of wealthy people.
- A dedicated economic zone for the automotive industry called the ‘Dubai Car and Automotive City Free Zone’ that offers streamlined registration and licensing processes.
- Strong resale market and rental profitability in the city.
Types of Car Business in Dubai
There are many options available if you are planning to venture into the automotive industry in Dubai. You can choose from a range of options, including starting a car dealership or a car rental business in Dubai, or setting up a platform to sell used cars. Here are a few common types of car businesses in Dubai:
Car Dealership
A car dealership in Dubai involves importing and selling either new or used cars. Car dealerships in the city get to serve diverse clients as it is home to luxury car buyers and budget-friendly customers. There is a new segment in the Dubai automobile sector called ‘Electric Vehicle (EV) Dealership’. EV dealerships are a niche offering because of the rising demand for electric vehicles.
Used Car Business
Knowing how to start a car rental business in Dubai can open up many opportunities. Expats with temporary residence permits prefer to buy used cars. This has created a big market for used cars in Dubai. There is a big chance to sell used cars in Dubai to a wide range of buyers, whether you’re starting an online marketplace or opening a physical store.
Car Rental and Leasing Services
Establishing a car rental business in Dubai offers corporate leasing or short-term rentals can be very profitable, particularly if the company is located in a popular tourist or business district.
Online Car Sales Platform
As the e-commerce sector in Dubai expands, more buyers are willing to research and even purchase cars online. Establishing a tech-based platform to sell new or used cars in Dubai could put your company in a position to grow quickly.
Car Customisation Shops
In Dubai, a lot of car owners have a strong interest in maintaining or personalising their vehicles. This need has led to car shops for detailing, repairs, or modifications.
Step-by-Step Guide to Start a Car Business in Dubai
For a car business setup in Dubai, you’ll need to follow a few legal steps:
Step 1: Choose the Jurisdiction
The first step for starting a car business is to choose the right jurisdiction. You can choose to set up either in the mainland or free zone. A car business in the mainland gives you flexibility to set up anywhere within Dubai. A business in the free zone offers many benefits such as tax rebates, 100 percent foreign ownership, full repatriation of profits, and a simplified business setup process.
Step 2: Determine the Legal Structure
The next step is to choose the legal business structure of the business based on the ownership structure and the amount invested. You can choose from structures such as sole proprietorship, partnership, limited liability company, private limited company, and branch office of a foreign company or Gulf Cooperation Council (GCC).
Step 3: Register the Trade Name
The trade name is the name of the car business which must comply with UAE naming conventions mentioned by the Department of Economic Development (DED). After selecting the name you must register it with the Dubai DED.
Step 4: Get Initial Approval
As part of the initial approval the Dubai DED grants a no-objection certificate to the business. With this approval, the authorities can grant the license and the investor can move forward with the next steps to establish a business.
Step 5: Create Necessary Documents
The next step is to create necessary documents such as memorandum of association (MoA), articles of association (AoA), and board resolution. For mainland businesses, you might need a local service agent agreement.
Step 6: Identify the Business Location
Every company operating in Dubai is required to have a physical address. The company’s location and facilities must adhere to the zoning laws and regulations set by the Dubai municipality.
Step 7: Submit Documents and Collect the License
To get the license, the final step is to submit the required documents mentioned above and pay the registration fees.
Conclusion
The automobile industry in Dubai is thriving with opportunities. The Dubai free zones further facilitate import and export activities, attracting global manufacturers and investors. Whether you are looking at a traditional dealership or a digital marketplace to sell used car in Dubai or sell new cars, success lies in understanding your clientele well. Contact Commitbiz if you are planning to set up a profitable car business in Dubai. Our team of experts will guide you through the entire business setup process in a hassle-free manner.
