How to Start a Car Rental Business in Dubai?

By Laxita Gautam
  | Published: 16 August 2021 | Last Updated On: 24 August 2021

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Dubai attracts a lot of entrepreneurs for setting up a business due to its strategic location and large tourist gatherings, providing ample opportunities for new businesses to grow. And when it comes to starting a car rental business, few additional benefits follow. There are a lot of expatriates who don’t want to buy a vehicle and rather prefer to take public transport or rent a car in Dubai. Moreover, tourism has been growing over time, and in the coming years, it is expected that Dubai will host around 20 million visitors. Most of the visitors will require a car for sightseeing and adventure. That is precisely why a car rental business in Dubai might be a very good idea.

Car rental business in Dubai doesn’t seem to have any saturation point coming in, in the near future as it is projected to grow up to 2.5 billion by the year 2023. Dubai has also recently organised international events for car lovers, and that only adds up to the advantage list for opening a car rental business in Dubai. So if all the reasons seem promising to you, then here are the steps on how to open a car rental business in Dubai.

Starting a car rental business involves more or less the same strategy as any other new business venture in Dubai. Deciding on a profitable location, organising the fleet of vehicles and other equipment and getting the paperwork done are some initial steps to open a car rental business in the UAE.

  • Select a strategic location in Dubai - It is always advisable to establish a business where the customers are easily and readily available. This ensures an effective and profitable bet on the business. A location close to the airport or other transport hub can increase the business visibility, thereby captivating more customers to rent a car in Dubai. Similarly, a location near the beaches, markets and hotels can also be a right choice incurring lesser startup costs.
  • Building up the Fleet - While building up your fleet of cars and equipment, you can plan the collection according to the type of customers you are targeting. If your rent a car in Dubai business is targeting tourists, then going for premium and luxury cars can be an effective strategy. But if the target clients are corporate personnel and daily commuters, then it's better to go for affordable cars. The choice of your fleet is important as it will decide the profit margin and cost of opening a rental car business in Dubai.
  • Define your Business Activity Description - It is important to define the type of business activity you are performing from the official list of activities mentioned by the Department of Economic Development (DED). Failing in doing so can get your license revoked or get you into paying huge penalties. For a car rental business, the activity details are mentioned below:

Activity Code

711105

Activity Group

Passenger Transport and Car Rent

License

Commercial

Activity of Business

Includes an enterprise for short term vehicle rent, without drivers, for tourists and people without car, out of town and vehicle owner who are awaiting car repairs

  • Choosing the Name of Your Company - It is also a vital strategy to choose the name of your company that is unique and easy to remember. You can avoid using abbreviated names or copying the names of well-established companies. Once decided, check for the availability of the name and get it registered.
  • Filing up your license application - Once the above steps are performed successfully, you will have to move ahead with filing a license application for opening a car rental business. To own and operate a car rental business, you will require a commercial license. You may need the following documents:
  • A duly filled license application form
  • A copy and original passport of owner/owners
  • A couple of passport size photographs

Apart from this, you will also need an RTA (Road Transport Authority) approval at the time of application for a commercial license.

  • Getting your UAE Work Visa Permit - In case you don’t already have a work visa in the UAE, you will have to apply for the same. It can be easily done with the help of agencies, and once your visa process is done, you are good to go with expanding and marketing stuff.
  • Marketing - Marketing is an effective way to increase your reach among the customers, which consequently increases the profit of your business. Find your target clients and plan your marketing strategies to reach out to them effectively. A car rental business in Dubai focusing on tourists can make hoardings and public displays to catch the eyes of the tourists. Digital marketing can be a cost-effective measure to reach out to potential customers.
  • Services - Offering better and attractive services is very important to attract customers. Get your vehicles timely serviced and they must be clean and in smooth working condition at the time of hire. You can provide pickup and drop service to offer ease to your customers, which will, in turn, bring them back to use your car renting services.

Also Read How to Find the Best Car Rental Services in Abu Dhabi?

What is the startup cost for starting a car rental service in Dubai?

The initial cost for starting a car rental service in Dubai depends on various factors like the number of cars in your fleet, office space, the total number of employees and expense in marketing, including other services that you want to include along with renting cars in Dubai.

Additionally, it also depends on the type of clients you are focusing on. Opting for luxury cars will obviously cost you more than having an affordable fleet of cars. The cost of paperwork and documentation will also add up to the total cost of starting your car rental service in Dubai.

Things to keep in mind before opening rent a car service in Dubai

Following are some important points to keep in mind before starting a car rental service in Dubai.

  • Make sure you abide by all the rules and regulations laid down by Dubai’s Department of Economic Development.
  • Get all your vehicles insured with car rental insurance. There are several insurance products for commercial vehicles like short-term car insurance also known as temporary car insurance to keep your fleet of vehicles safe.
  • Make sure you have all the paperwork ready and complete at the time of starting a car rental service in Dubai.
  • If you already don’t have a work visa permit, reach out to the authorities and apply for the same.
  • Having a business license, you can also sponsor other people to have work visa permits, like family members and other workers employed with you.

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Conclusion:

Setting up a car rental business in Dubai requires some knowledge of the process beforehand. However, once you begin executing the above-mentioned steps, the process of establishing the business will become a lot easier and straightforward. Car Rental services in Dubai and the rest of UAE is a profitable business and will keep on growing in the coming years.

Laxita Gautam
Laxita Gautam137 Posts

Senior Content Writer | She functions on classic British fiction, Japanese manga, and strong americanos. Laxita is tailor-made to create engaging, interactive pieces that offer simplified insights into complex subjects.