How to Get a Trade License for a Car Dealership in a UAE Free Zone

19 Aug 2024 Helpful Tips

“trade 

When it comes to starting a car dealership in the UAE there are two options. You can either choose to trade on the mainland or you can choose to trade in a UAE free zone. Both options have their advantages and disadvantages. For expat aspiring car dealers, starting a car dealership in a trade zone is an attractive option.

The first step to starting a car dealership in a free zone in the UAE is getting a trade licence. EasyCars has put together the complete guide that will walk you through the process of getting a trade license in a UAE free zone.

Understanding Free Zones in the UAE

Free zones in the UAE are designated areas that foreign owned business can operate. Free zones in the UAE were created to attract international entrepreneurs by offering 100% foreign ownership benefits, and most importantly tax exemptions. The important thing to know about UAE free zones is each free zone is governed by its own authority.

What are some free zones in the UAE to start a car dealership? The main free zones to start a car dealership in the UAE are Jebel Ali Free Zone (JAFZA), Dubai Airport Free Zone (DAFZA), and Sharjah Airport International Free Zone (SAIF Zone).

Types of Trade Licenses Available

Before you think about applying for a trade license in the UAE, it is important that you understand all the different types of trade licenses available in all the UAE free zones. For car dealerships, the most important and required license is a commercial license.

A commercial license in the UAE allows you to trade goods including selling your cars for sale in the UAE within the free zone and internationally. A commercial license will allow you to import, export and store your cars for sale.

It is important to note that in some free zones, you may need to get additional permits or licenses depending on the type of car dealership that you are looking to operate.

How to get a trade license in the UAE

  1. Choose the Right Free Zone: The first step to getting a trade license to operate a car dealership in the UAE is choosing the right free zone. Before you choose a location for your car dealership in Dubai, it is important that you consider factors like availability, cost, accessibility and proximity to major infrastructure.
  2. Determine Your Business Structure: Free zones have different business structures that your car dealership can use, these include Free Zone Establishment (FZE) and Free Zone Company (FZC).The business structure that your dealership chooses to operate from will depend on the number of shareholders in your dealership, the scale of your dealership and any future expansion plans.
  3. Select Your Business Activities: When you apply for a trade licence for your car dealership, you will need to specify what type of dealership you’re and how you will go about selling cars. Each free zone has a list of permitted activities that all businesses including car dealerships need to adhere to.
  4. Submit Your Application: Once you’ve chosen the free zone for your car dealership in the UAE, your dealerships business structure, and how you are going to trade, you can submit your trade license application to the free zone authority. The trade license application will typically require the following documents:
    • A completed application form
    • Passport copies of the business owners and shareholders
    • Proof of residence (for non-resident investors)
    • A detailed business plan outlining your dealership's objectives, target market, and financial projections
    • A lease agreement for office space within the free zone (if required)
    • Bank reference letters or proof of financial standing

It is important to note that some free zones in the UAE may also require you to make an initial deposit in a corporate bank account.

After you apply you will then need to:

  1. Get Initial Approval: After reviewing your application, the UAE free zone authority will provide an initial approval for your car dealership. Initial approval will mean that your proposed dealerships activities are acceptable. This approval is normally valid for a limited time.
  2. Lease Office or Warehouse Space: Most free zones in the UAE mandate that businesses need to have a physical presence which means you need to rent a location. For your car dealership it is a requirement that you have adequate space to trade from and where you can store your vehicles within your free trade zone in the UAE.
  3. Finalize Your Trade License: Once your car showroom in the UAE has got initial approval, and a lease agreement, you are now ready to finalize your trade license. To finalize your trade license you will need to pay the remaining fees.
  4. Open a Corporate Bank Account: Once your car dealerships trade license has been approved, the next step is you will need to open a corporate bank account. Most banks in the UAE will require a copy of your trade license before they will allow you to open an account with them.
  5. Apply for Visas: As a licensed business in a free zone, your dealership will be able to apply for UAE residence visas for yourself, your employees, and your dependents. The number of visas you can apply for will depend on the size of your office space and the free zone’s regulations. The visa process in the UAE typically involves medical tests, Emirates ID application, and health insurance.
  6. Comply with Ongoing Regulations: Once your trade license is approved it is so important that your dealership comply with the free zones ongoing regulations. Failing to adhere to the regulations will result in fines and the revocation of your trade licence.

Final Word,

Getting a trade license for a car dealership in a UAE free zone is a structured process that involves careful planning and adherence to regulations. The 10 steps presented in this piece are proven ways to get a trade license for a car dealership in the UAE.

We hope you enjoyed reading this article. To read more articles like this, please visit the EasyCars latest news page here.

DISCLAIMER – The content within this blog does not constitute professional advice and is intended to be general in nature. Please consult with all relevant parties prior to making any decision.

About EasyCars,

EasyCars by Jeal is a UAE Motor Industry Specific, Dealer Management Software that automates the daily tasks of running a motor dealership. Using the latest technologies, EasyCars removes frustrations experienced at the dealership - opening the doors to future growth.

EasyCars features include Simple Stock Management, Automated Advertising, Automatic VAT Calculations, Xero Accounting Integration, Facebook Automotive Inventory Ads, Dealer Websites and Business Reporting in the one central management software.

To learn more about EasyCars or to arrange a no-obligation free demo of the software, please submit the form below.

Learn more about our dealer management system.

Contact Us