Starting a car dealership in Dubai is an exciting prospect. The first thing that you need to do when it comes to starting a car dealership in Dubai is registering your business. The UAE Business registration process involves several steps and can be complex for those unfamiliar with local regulations.
EasyCars has put together the complete guide that will walk you through the process of registering your car dealership or your car showroom in Dubai.
Let’s get into it!
Step-by-Step Guide to Registering Your Car Dealership in Dubai
Step 1: Determine Your Business Structure
The first step in registering your car dealership in Dubai is to set your business structure. In the UAE there are two different business structures. You can either choose to setup your car dealership on the mainland or you can choose to operate in a free zone.
- Mainland Business Registration UAE: Setting up a dealership in the mainland in the UAE allows you to trade directly within the local market but most importantly apply for and engage in government contracts. However, to operate a car dealership on the UAE mainland you will need a local sponsor who owns 51% of the business.
- Free Zones Business Setup UAE: The benefit of starting a car dealership in a UAE Free Zone is they can be 100% foreign owned. Free zones offer different tax exemptions and a simplified setup. It is important to note that car dealerships in Dubai’s free zones are restricted to operating in the free zone only.
Step 2: Choose a Business Name
The second step to registering your car showroom as a business in the UAE is to choose a business name. Choosing an appropriate business name is so important as it will reflect your brand identity.
It is important that your business name complies with the UAE’s business name conventions. Another important note before choosing a business name is to search availability, you cannot choose a business name that already exists in the UAE. You can check the availability of your chosen name through the Department of Economic Development (DED) or the respective free zone authority.
Step 3: Apply for Initial Approval
Once your dealership has chosen its business structure and an available name, the next step is to apply for initial approval from the relevant authority.
If you’re starting a car showroom under a mainland setup you will need to register your business with the DED. On the opposite side, if you’re planning to trade in a free zone you will need to register through your selected free zone authority in Dubai.
Applying for initial business registration approval in the UAE involves submitting documents including:
- Passport copies of the shareholders
- Copy of your chosen business name
- Description of your business activities
Initial approval means that the UAE government has no objection to you starting a car dealership in Dubai. However, this is not the final approval.
Step 4: Draft a Memorandum of Association (MOA)
For mainland dealerships, it is required that you draft a Memorandum of Association (MOA). An MOA outlines the ownership structure of your car dealership or car showroom in Dubai, highlight the responsibilities of shareholders, and most importantly describes your intended business activities.
Your Dealerships MOA must be notarized by a public notary in Dubai. If you’re setting up a car dealership in a free zone, the requirements may vary, and you may need to draft similar documents depending on the specific free zones requirements.
Step 5: Secure a Business Location
When it comes to operating a car showroom in Dubai, nothing is more important than location. You need to be visible to customers and showcase yourself as the best car dealership in Dubai.
For mainland dealerships, you need to lease commercial space and get a tenancy contract. The lease agreement must be registered with Ejari, the official rental index in Dubai.
For free zone dealerships in Dubai, you can lease office space, warehouses, or retail units directly through the free zone authority.
Step 6: Obtain Necessary Licenses
The next step that you will need to do to get business registration approval in the UAE is to get the mandatory licences to operate a car dealership. The type of license your car dealership will need will vary based on the type of dealership that you’re looking to operate.
- Commercial License: Required for trading activities, including selling cars.
- Industrial License: Required if you plan to manufacturer or assemble cars.
- Service License: Required for dealerships that are looking to provide automotive services such as repairs and maintenance.
For mainland dealerships, licenses are issued by the DED. Free zone businesses must get their licenses from the free zone authority in which they are trading.
Step 7: Register with the Dubai Chamber of Commerce and Industry
To legally operate your car dealership in Dubai, you need to register your business with the Dubai Chamber of Commerce and Industry. This registration provides you with a membership certificate, which is required for all business operations and legal compliance.
Final Word
To register your car dealership in Dubai, there are several steps that you need to complete. The 7 steps presented in this piece are the common way to apply for business registration in the UAE.
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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.
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