Author: Andreea Andron
Published: May 27, 2024
In the UAE, private transportation is exceedingly popular, with car ownership being very common. This is likely due to a few factors, from the extensive road networks to limited public transportation options in some areas and the hot climate, making walking less appealing.
The UAE has a thriving automotive industry, ranking second in the Gulf Cooperation Council (GCC). Luxury cars are also particularly popular, making up nearly 15% of sales.
The vehicle rental market in the UAE is expected to reach USD 1.7 billion by 2027. With a diversified economy, tourism growth, and the convenience of online services, vehicle rental is booming.
These are just a few reasons, amongst many, why an entrepreneur in UAE's car sales or car rental industry is in the perfect position to thrive. With numerous types of vehicles in the markets and consumers with varied needs, it's also important to understand which niche business area you want to specialize in.
If you want to set up a car sale or car rental business in the UAE, you'll need to know exactly which business activities you can choose from.
Under this category is a range of specific business activities for the sale of motor vehicles. Remember, you don't have to limit yourself to trading new vehicles—with this license, you can also match the right used vehicle to its new owner.
Here are the specific categories of vehicles you might be interested in specializing in:
There are two routes you can take as a car trader: wholesale or retail.
Wholesale Traders:
Retail Sellers:
Under this activity, entrepreneurs can conduct both wholesale and retail trade of the above vehicles, conduct car auctions, and work as commission-based agents too.
This business activity does not enable renting of vehicles, whether this includes a driver or not. Additionally, entrepreneurs with this business activity can only sell whole cars, and cannot separately sell car parts or accessories. This applies to all the business activities under the group 4510.
From regular passenger motor vehicles to specialized passenger motor vehicles, this activity is a useful one to have in tow. It applies to standard cars (or vehicles) that have been modified to suit a specific purpose.
SPC Free Zone recommends this for any wholesale or retail trader within the motor vehicles industry.
| Requirement | Status |
|---|---|
| Third-party Approval | No third-party approvals required |
| Filing of Economic Substance Return | Exempt |
| Anti-Money Laundering Compliance | Exempt |
Typically, entrepreneurs with this activity are involved in the buying and selling of commercial vehicles meant for transporting passengers (through buses) or cargo (through trucks).
With the UAE's thriving logistics sector, there is always a demand for sturdy, reliable trucks to transport goods. Meanwhile, in the cities, where the public transport systems are more popular, a wide network of buses keep things flowing smoothly. The country's tourist influx and booming event landscape have also propelled the need for private buses.
| Requirement | Status |
|---|---|
| Third-party Approval | No third-party approvals required |
| Filing of Economic Substance Return | Exempt |
| Anti-Money Laundering Compliance | Exempt |
No region appreciates classic cars like the UAE does. For a large population of high-net-worth individuals in the UAE, collecting and maintaining classic cars is more than a hobby – it's a lifestyle.
Classic cars are seen as valuable investments in the UAE, with their prices often appreciating over time. The UAE also allows for import of classic and vintage cars, making a wider variety available to collectors.
To break into this market, you'll need:
| Requirement | Status |
|---|---|
| Third-party Approval | No third-party approvals required |
| Filing of Economic Substance Return | Exempt |
| Anti-Money Laundering Compliance | Exempt |
While the market for the newest, most exciting vehicles is always booming, don't make the mistake of ignoring the thriving secondhand market in the UAE. For a plethora of reasons, many people opt for used vehicles and this activity gives you the ticket to trade in this booming industry.
| Requirement | Status |
|---|---|
| Third-party Approval | No third-party approvals required |
| Filing of Economic Substance Return | Exempt |
| Anti-Money Laundering Compliance | Exempt |
This encompasses a category of vehicles designed and equipped for specific functions beyond everyday passenger transport.
Emergency Vehicles:
Construction and Industrial Vehicles:
Commercial Vehicles:
Passenger Transportation:
| Requirement | Status |
|---|---|
| Third-party Approval | Required from Ministry of Economy (only the first time you apply for a new license) |
| Filing of Economic Substance Return | Exempt |
| Anti-Money Laundering Compliance | Exempt |
The electric car (EV) market in the UAE is still in its early stages but is poised for significant growth.
The UAE government is actively promoting EV adoption, and rising fuel prices coupled with growing environmental awareness and increased production of electric vehicles are making them more popular.
| Requirement | Status |
|---|---|
| Third-party Approval | Required from Ministry of Economy (only the first time you apply for a new license) |
| Filing of Economic Substance Return | Exempt |
| Anti-Money Laundering Compliance | Exempt |
From vehicles specialized to carry perishable goods to armored vehicles, fire engines, hazmat vehicles, and specific security vehicles, this activity is reserved for entrepreneurs trading vehicles that are meant to keep either goods or living things safe.
The focus is on vehicles that ensure the security and well-being of cargo or passengers during transportation.
| Requirement | Status |
|---|---|
| Third-party Approval | No third-party approvals required |
| Filing of Economic Substance Return | Exempt |
| Anti-Money Laundering Compliance | Exempt |
The UAE's thriving motorsport scene is fueled by a passion for fast cars and cutting-edge technology.
It goes without saying that this is an exciting segment of the industry to step into, provided you've equipped yourself with the right knowledge, of course.
| Requirement | Status |
|---|---|
| Third-party Approval | Required from Ministry of Economy (only the first time you apply for a new license) |
| Filing of Economic Substance Return | Exempt |
| Anti-Money Laundering Compliance | Exempt |
If your business's focus is on buying and selling brand-new, never-before-used cars specifically for export to other countries, this activity is a must.
A trader engaged in export acts as an intermediary between car manufacturers or authorized dealers and international buyers.
Your role would be to:
| Requirement | Status |
|---|---|
| Third-party Approval | No third-party approvals required |
| Filing of Economic Substance Return | Exempt |
| Anti-Money Laundering Compliance | Exempt |
This license covers renting and operational leasing of the following types of vehicles:
As discussed, renting of vehicles is a booming industry in the UAE and this license is the ticket you need to enter the trade. From passenger cars like SUVs and minivans to trucks, utility trailers, and recreational vehicles such as caravans, the scope here is immense.
Those operating with this business activity:
| Requirement | Status |
|---|---|
| Third-party Approval | Required from Traffic Committee (Sharjah) prior to obtaining your business license |
| Filing of Economic Substance Return | Exempt |
| Anti-Money Laundering Compliance | Exempt |
Did you find what you were looking for? Explore the other guides in the Activity Hub for exploring unique business ideas in Dubai and navigate the essentials of business setup with ease.
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Get your business license in the UAE today and explore a world of opportunities waiting for you.