Dubai’s roads are full of possibilities and not just for travellers, but for entrepreneurs too. In the first half of 2025 alone, nearly 10 million international visitors came to the city, making it one of the top travel destinations globally. Along with tourists, Dubai has a large expatriate population and a thriving business scene, all of which create a strong demand for cars and convenient transport options.
The car rental market in Dubai is growing fast. Experts expect it to grow by around 13% every year from 2024 to 2030. This growth is driven by tourists, business travellers, and residents who need flexible mobility solutions. Short-term rentals are especially popular, but long-term and luxury rentals are also on the rise.
Starting a car rental business in Dubai isn’t just about buying cars. You also need to understand local rules, get the right licenses, and follow the proper business setup steps. Doing this the right way can save you time, money, and headaches.
Why Start a Car Rental Business in Dubai?
If you’re thinking about a business with steady demand and great growth potential, a car rental service in Dubai checks all the boxes.
1. High Tourism Numbers
Dubai attracts millions of tourists every year, from vacationers to business travellers. Many prefer renting a car over public transport to explore the city conveniently, creating a steady demand for rental services.
2. Massive Market Valuation
The car rental market across the UAE is not just growing - it's booming. The market revenue is projected to reach $5.2 billion by 2030, growing at a healthy CAGR of over 13%. This signifies a long-term opportunity for new entrants.
3. Growing Expat Community
With thousands of expatriates living in Dubai, there’s a constant need for both short-term and long-term car rentals. Residents often rent cars while waiting for their own vehicle registrations or for temporary purposes.
4. Opportunities in Luxury and Exotic Cars
Dubai is famous for its love of luxury and high-end cars. A well-managed luxury or exotic car rental service can attract high-paying clients, boosting profitability.
5. Flexibility and Variety of Market Segments
The market allows you to cater to multiple segments: tourists, residents, corporate clients, luxury car enthusiasts, or even niche areas like electric vehicles and chauffeur services. This diversity increases profit potential.
6. New Revenue Opportunities
The market is evolving with new trends like car subscription models (projected to grow by 42% annually) and the rising adoption of Electric Vehicles (EVs), which are being supported by government incentives and infrastructure. These emerging niches offer new avenues for specialized services and competitive advantages.
Types of Car Rental Businesses in Dubai
Before starting a car rental business in Dubai, it’s important to decide which type of rental service you want to offer (or even combine a few for a wider reach).
1. Short-Term Rentals
These are daily or weekly rentals, popular among tourists and residents who need a car for a limited time. They usually generate higher margins but require frequent customer turnover and maintenance.
2. Long-Term Rentals
This is ideal for residents or companies that need vehicles for months at a time. Long-term rentals provide steady, predictable income and lower operational hassle compared to short-term rentals.
3. Corporate Rentals
Businesses often rent fleets for their employees or clients. This segment offers long-term contracts, repeat business, and stable cash flow.
4. Luxury and Exotic Car Rentals
Dubai’s love for luxury cars is unmatched. Renting out sports cars, convertibles, and high-end SUVs can be highly profitable if you target the right audience, such as tourists and influencers.
5. Chauffeur-Driven Services
Some clients prefer convenience and comfort over driving themselves. Offering cars with professional drivers (especially luxury or executive vehicles) can attract high-paying customers.
6. Electric and Eco-Friendly Rentals
As Dubai pushes for sustainable mobility, electric and hybrid car rentals are gaining attention. This emerging segment appeals to eco-conscious tourists and businesses.
7. Car Subscription Model
A growing trend offering all-inclusive monthly payments (insurance, maintenance included) with the flexibility to change the car model or pause the subscription. Appeals to those who value convenience and predictability.
Dubai Car Rental Business Setup Requirements
To start a car rental business in Dubai you need to secure the right licenses and approvals to operate legally and avoid fines or delays. Here are the key requirements:
Business License:
To operate your car rental business, you’ll need a commercial license. If you’re setting up on the mainland, this license is issued by the Department of Economic Development (DED). If you prefer a free zone setup, the license will be issued by the respective free zone authority. Your license should clearly state your business activity as “Car Rental” or “Passenger Vehicle Leasing.”
Car Rental Permit:
In addition to the business license, you’ll need a Car Rental Permit from Dubai’s Roads & Transport Authority (RTA). This permit ensures your company meets all safety, insurance, and operational standards set by the RTA for rental vehicles.
Other Approvals and Requirements:
Before you start operations, you’ll also need to register your trade name and get it approved, secure comprehensive vehicle insurance for your fleet, obtain necessary municipality and traffic department approvals depending on your office location and operations.
Documents Required for License:
To start a car rental business in Dubai, you’ll need to submit a few key documents for approvals and licensing. These typically include:
- Passport copies of all shareholders and partners
- Emirates ID and residence visa (for UAE residents)
- Trade name reservation certificate
- Initial approval certificate from the Department of Economic Development (DED) or relevant free zone authority
- Tenancy contract or Ejari for the office space
- Memorandum of Association (MOA) and Articles of Association (AOA)
- RTA approval for operating a car rental service
- Comprehensive vehicle insurance documents
How to Start a Car Rental Business in Dubai, UAE?
Discover the essentials of starting a car rental business in Dubai, UAE. From licenses to costs, our guide covers everything you need for a successful launch in this thriving market.
1. Market Research and Business Plan
Research existing car rental companies in Dubai to understand their offerings, pricing structures, and customer service practices. This competitive analysis will help you pinpoint strengths and weaknesses in the market.
2. Choose Your Business Structure and Location
Decide whether you want to set up your company in the Dubai mainland or a free zone. Mainland setups allow you to operate anywhere in the UAE, while free zones may offer tax benefits and lower setup costs.
3. Select Your Car Rental Company Name
Pick a unique and relevant name for your business. Make sure it follows the UAE’s naming guidelines and get it approved by the Department of Economic Development (DED) or your chosen free zone authority.
4. Apply for the Business License
Submit your business documents and apply for a commercial license under the activity “Car Rental” or “Passenger Vehicle Leasing.” The license is issued by the DED (for mainland) or the respective free zone authority.
5. Obtain an RTA Car Rental Permit
Once your business license is approved, apply for a Car Rental Permit from the Roads & Transport Authority (RTA). This ensures your business complies with Dubai’s transport and safety regulations.
6. Lease or Purchase Your Fleet
Depending on your business plan and budget, you can buy vehicles or lease them from dealers. Choose cars that suit your target customers - from affordable models to luxury brands.
7. Get Comprehensive Vehicle Insurance
Every vehicle in your fleet must be insured. Opt for comprehensive insurance that covers accidents, theft, and damages to ensure protection for both your business and customers.
8. Set Up an Office and Digital Platform
You’ll need a physical office space for your operations and customer service. Alongside, build a user-friendly website or app for online bookings and payments.
9. Hire Staff and Drivers (if needed)
If you plan to offer chauffeur-driven services, hire experienced and licensed drivers. Also, employ customer service and maintenance staff to ensure smooth operations.
What is the Cost of Starting a Car Rental Business in Dubai?
Starting a car rental business in Dubai involves several key expenses. The car rental business license fee can range from AED 12,000 to AED 20,000, depending on whether you choose a mainland or free zone setup. You’ll also need a car rental permit from the RTA, which may cost around AED 5,000–7,000.
Your vehicle fleet will be your biggest expense. The cost can vary widely based on how many cars you plan to start with and the type of vehicles.
You’ll also need a physical office and parking area for your vehicles. Renting a small office with basic parking can cost around AED 30,000 to AED 50,000 per year, depending on location.
To get more accurate cost breakdown, talk to our business setup expert today.
Ready to Drive Your Business Forward?
Starting a car rental business in Dubai is a great business opportunity for entrepreneurs and investors. The city is full of tourists, residents, and companies that always need reliable transport. All you need is the right plan, proper paperwork, and the right marketing to get your business moving in the fast lane.
We understand that it might seem like a lot at first - licenses, RTA approvals, insurance, and more, but once you get through the setup, the rewards are worth it. If you’d like to make the process easier, Shuraa India can help. Our team takes care of all the legal steps and documentation so you can focus on growing your business. Reach out to Shuraa today and start your car rental business in Dubai the smart way.