Are you ready to dive into the car rental business in Dubai? You’re in the right place! We’ve seen a rise in demand for car rental business setup in Dubai, and we know the questions you might be asking: How do I get started? What license do I need? And what’s RTA approval all about?
We’ll take you through a simple, step-by-step guide so you can confidently launch your car rental business in Dubai or anywhere in the UAE. You will also get to know about the license cost and other important RTA permit fees and general guidelines about vehicle security and installation of SIRA approved tracking system. Whether you’re a first-time entrepreneur or looking to expand, you’ll find everything you need right here. So, let's get started!
But first, let’s explore why this is a golden opportunity for you!
Car Rental Business Opportunity in Dubai
Did you know? As per Google insights, over 50,000 people search online each month to book rental cars in Dubai! This means the potential customer base is huge. Tourists flood the city from November to May, and with so many visitors, the demand for rental cars is only growing. In fact, Dubai’s car rental industry is expected to reach a massive $5 billion by 2025 - 2028.
With short-term and long-term rentals both in demand, there’s plenty of room for new businesses. So, let’s break down exactly how the car rental business works in Dubai and what it takes to get started.
How the Car Rental Business Operates in Dubai
To run a car rental business successfully, it’s key to understand the booking process and what your customers expect. Ready for a quick tour of the car rental journey? Let's get started and take an example of the scenario:-
Customer Enquiry:
Tourists or residents can search for your service online or learn about it through partnerships with local hotels.
Fleet Display:
They browse your website to see a range of vehicles, from luxury cars to SUVs for families.
Booking Process:
They select their preferred car, complete the booking form, and choose a pickup location - either your office, their hotel, or the airport.
Document Collection:
At the pickup, you’ll check the customer’s ID, passport, driving license, and collect a security deposit.
Handover the Car:
You’ll go over the basic rules, including information on damages, insurance coverage, and vehicle return location.
Vehicle Return:
At the end of the rental period, the car is returned to you, and you check for any damages and finalize the process.
In Dubai, maintaining a good relationship with hotels can be beneficial since many tourists prefer booking through their accommodation. Online marketing is also key since many travelers rely on the internet to find services.
Ready to take the next step? Let’s dive into the details of business registration.
Car Rental Business License
In Dubai, every business needs approval from the Department of Economic Development (DED). You’ll need to get a specific business license to operate your car rental service. The car rental business activity comes under professional license.
Car Rental License Activity Code:
The primary activity for a car rental business is under Activity Code 7710001, which allows you to rent vehicles without drivers.
Additional Online Booking Activity: If you plan to offer online bookings, consider adding Activity Code 7710013, allowing rentals via electronic platforms. This will make it easier for customers to book online or through an app, which is a must in today’s digital world.
How to Start a Car Rental Business: Step by Step
1. Select a Trade Name:
You’ll need to propose three potential names, and the DED will finalize one based on availability.
2. Trade Name Reservation:
Reserve your approved name with the DED.
3. Initial Approval:
This approval allows you to proceed with office setup, lease agreements, and applying for RTA permit. So, after getting the initial approval from DED Dubai, you can other process in parallel.
4. Office Space and Ejari Registration:
Find and lease an office space, then register it with Ejari. Note that there’s a 5% market fee on the rental value.
5. Memorandum of Association (MoA):
The MoA is an official agreement outlining your business structure and ownership, required for final approval from the DED.
6. Fee Payment and License Issuance:
Once you’ve completed the above steps, pay the licensing fee, and you’ll receive your car rental business license.
Pro tip: With our experience at CSPzone, we’re here to help streamline this entire process and ensure all details are in place.
Car Rental License Cost in Dubai
Licensing costs can vary, generally ranging from AED 15,000 to AED 20,000, or around $5000, depending on additional business activities and the number of visas required. Remember, this amount doesn’t cover your office rental, Ejari registration, market fees, employee visas, or RTA training costs.
For a complete breakdown of all expected costs tailored to your needs, reach out to our CSPzone team for a full quote.
RTA Approval for Car Rental Business
Before you can officially begin renting cars, you’ll need to secure approval from the Road and Transport Authority (RTA).
Here’s what the RTA approval covers:
Activity Description: The license covers rental of regular, semi-autonomous, and self-driving vehicles for at least one day.
Licensing Agency: RTA’s Commercial Transport Activities Department issues this permit.
RTA Approval Process:
1. Get initial approval from the DED - The initial approval which you have received from the DED will be required here.
2. Complete the RTA’s application form.
3. Submit supporting documents, including ID, passport, and residency documents for partners if applicable.
Important RTA Compliance Guidelines
If you’re running a car rental business in Dubai, you’ve probably heard about RTA compliance, right? But did you know there are a few specific rules you have to follow to keep your RTA permit? Let’s dive in together to make sure you know what’s required to keep your business fully compliant and running smoothly. Sound good? Let’s get started!
1. Follow Only RTA-Approved Activities
Did you know that with an RTA permit, you’re only allowed to do exactly what’s listed on it? It’s true! This means if your permit says "car rental," you’re all set to rent out vehicles, but that’s it - no extra services unless RTA approves. Staying within these limits is crucial for keeping your permit.
2. Keep Your Office, Vehicles, and Parking Spaces Up to Standard
Here’s an important one! To stay in line with RTA standards, your office space, vehicles, and even your parking spaces must meet certain requirements. From maintaining a clean, well-organized office to ensuring your cars are always in top condition, RTA has high standards. It’s amazing how much of an impact this can have on keeping your operations legit!
3. Register All Your Rental Vehicles in Dubai
You might be wondering: Do I really need to register every single vehicle? Yep! Every car in your rental fleet, whether it’s owned or leased, needs to be registered in Dubai. This is non-negotiable and helps RTA keep everything on record. Following this rule? Great - you’re on the right track!
4. Keep Stickers to a Minimum - Get RTA’s Okay First!
Planning to add some cool promo stickers on your vehicles? Hold on! RTA needs to approve any promotional materials on rental cars first. This might sound strict, but it keeps the city’s roads looking neat and uniform. So, get the green light from RTA before adding any promotional materials.
5. Don’t Share Your Permit Without RTA’s Permission
Here’s a good one: Did you know your RTA permit is just for you and your business? Yep, no lending, renting, or sharing it with other businesses unless you have special permission from RTA. It keeps the permit’s purpose clear and helps avoid any mix-ups with other companies.
6. Use RTA-Approved Parking and Cooperate with Officials
Ever wondered where you’re supposed to park those rental cars? RTA has designated parking spaces, and you’re expected to use these spots only. Plus, whenever an RTA official needs to inspect or chat with you, full cooperation is the way to go. Keeping things smooth with RTA means a better experience for you and your customers!
7. Install and Renew an RTA-Approved Tracking System
This is good for security reasons! All rental vehicles need a tracking system that’s certified by the Security Industry Regulatory Agency (SIRA). But wait, there’s more! This tracking system needs to be renewed every year. It’s a fantastic way to keep an eye on your fleet and stay compliant. Amazing, right?
Choosing the Right Location and Marketing Your Business
Location and marketing go hand-in-hand for a successful car rental business. Consider setting up in a high-traffic area like the Dubai Airport car rental zone for easy access. Online marketing is a must, especially since tourists and residents often search online for car rentals. Partnering with hotels for direct referrals can also boost visibility.
During peak tourist season, paid ads and targeted online promotions can really set you apart. Keep your marketing efforts visible and make sure your online booking system is smooth and easy to use.
Set Up the Right Fleet of Vehicles
Alright, here’s the fun part - choosing your cars! Dubai is known for luxury, so while economy cars are always in demand, luxury and sports cars can be very popular with tourists and locals alike. Here’s a quick rundown of what you might consider:
Economy Cars: Affordable and great for daily rentals.
Luxury Cars: Think BMW, Mercedes, and Audi. Perfect for clients looking for a high-end experience.
SUVs: Ideal for families or groups that need extra space.
Sports Cars: Popular for short-term rentals by thrill-seekers and tourists.
Get Insurance for Your Vehicles
Here’s something you don’t want to skip - insurance. Having insurance on every rental vehicle is a requirement, and it’s just good business sense. You’ll need comprehensive insurance that covers damages, theft, and liability. Make sure to shop around for policies and pick one that offers the best protection without breaking the bank.
Ready to Start?
Starting a car rental business in Dubai involves multiple steps, from licensing, RTA permit, to marketing. With our CSPzone expertise, you’ll have guidance for each phase, ensuring you’re fully compliant and ready to roll. Contact us today, call or WhatsApp @ +971504655861 or email us at info@cspzone.com for a personalized consultation without any fee!
