What License Do You Need to Start a Car Dealership in the UAE?

27 May 2024 Helpful Tips

dealer license

Starting a car dealership in the UAE is an exciting business venture. The UAE’s automotive industry continues to grow on the back of record population growth and an increased desire for luxury automobiles. However, starting a car dealership in the UAE involves understanding and adhering to complex legal requirements. The first and most important step when starting a car dealership in the UAE is gaining the correct licenses and permits.

In this article, EasyCars will offer a comprehensive guide on the licenses that you need to start a car dealership in the UAE and how you can proceed to gaining the licenses to operate a car dealership.

Let’s get into it.

Understanding the UAE Regulatory Landscape

When it comes to operating a business in the UAE there laws are well defined. The key regulatory body that you need to collaborate with when starting a car dealership in the UAE is the Department of Economic Development. On top of this you will also need to collaborate with specific automotive regulatory authorities.

It is important to note that the requirements may vary slightly depending on where you want to open a car showroom in the UAE.

Types of Car Dealerships in the UAE

Before jumping into the car showroom license process in the UAE it is important to understand the different types of car dealerships and car showrooms you are legally permitted to start in the UAE.

In the UAE you have the option of setting up the following types of car dealerships or car showrooms:

  1. New Car Dealership UAE: Selling new cars to members of the UAE public directly from manufacturers.
  2. Used Car Dealership UAE: Selling pre-owned vehicles to Emiratis.
  3. Multi-Brand Dealership UAE: Selling both new and used cars from multiple manufacturers.
  4. Online Car Dealership UAE: Operating primarily through an online platform.

Each type of dealership and showroom may have their own specific license requirements so it is vital to understand what type of car showroom that you want to operate early in the planning process.

Key Licenses and Permits for Car Dealerships in the UAE

1. Trade License

The first and most important license that you will need to start any type of car dealership in the UAE is a Trade License. A trade license in the UAE authorises you to engage in commercial activities within the UAE.

How do you apply for a trade license in the UAE? The department of economic development issues trade licenses. The process often involves the following:

  • Choosing a Business Activity: Choose the specific business activities you will be involved in, such as selling new cars for sale in the UAE, selling used cars for sale in Dubai, or both.
  • Business Name Registration: You will need to register a unique business name that complies with the UAE’s naming conventions.
  • Initial Approval: Gain initial approval for a trade license from the DED, which confirms that the business activity and name are acceptable.

2. Automotive Dealership License

The second most important license that you need to operate a car dealership in the UAE is an Automotive Dealership License. An Automotive Dealership License in the UAE is also issues by the DED.

How do you get an Automotive Dealership license in the UAE? To gain a Automotive dealership License to operate a car showroom you often need to complete the following:

  • Manufacturer Agreements: Provide and secure agreements with car manufacturers if you’re planning to sell new cars for sale in the UAE.
  • Automotive Regulatory Approval: Gain approval from the relevant automotive regulatory authority, which may involve inspections and adherence to specific standards.

3. Commercial Space Approval

Your car showroom in the UAE will need a physical location to operate from. To start operating a car showroom in Dubai, your location must be approved by the local municipality.

Gaining approval for your car showroom location includes completing the following:

  • Lease Agreement: Gain a lease agreement for a commercial space suitable for a operating a car dealership in the UAE.
  • Zoning Approval: You need to ensure that the location of your car showroom complies with local zoning laws and is approved for automotive sales.
  • Fit-Out Permit: You will also need a permit for any modifications or fit-outs required to set up the dealership.

4. Health and Safety Permits

Health and safety is paramount when running a car dealership in the UAE. To ensure that your dealership complies with health and safety regulations, you will need to complete the following:

  • Civil Defence Approval: You will need to ensure that your car showroom meets fire safety and other civil defence requirements.
  • Health Department Approval: Just as important, your car showroom in the UAE will need to adhere to local health regulations, especially if you plan to have a service centre or workshop.

5. Environmental Permits

One of the most strident regulations for businesses in the UAE are environmental related. If you are planning to operate a car dealership in Dubai with a service centre attached you may beed to:

  • Environmental Impact Assessment (EIA): Depending on the size and scope of your dealership, you may need an EIA to assess the environmental impact of your dealership operations.
  • Waste Disposal Permits: If you have a service centre in Dubai at your car dealership, you will need permits for the proper disposal of hazardous materials and waste.

Final Word,

Starting a car dealership in the UAE involves gaining the necessary permits and licenses. Before starting a car showroom in the UAE it is important that you understand what type of showroom that you are looking to operate and you apply for and gain the required licenses.

DISCLAIMER – The content within this blog does not constitute professional advice and is intended to be general in nature.

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