Today, many people and companies in the UAE own personal and commercial vehicles. The market for the premium automobile components is growing for luxury cars to public transport. You can begin an auto spare parts business in Dubai to fulfill the rising demand of the routine maintenance.
Strategic positioning of the UAE at the crossroads of three continents makes it an international trading hub. So, the UAE is ideal for trading of the automotive components both locally and globally. Particularly, the cities of Dubai, Abu Dhabi and Sharjah are emerging as the automotive component centers in the MENA region.
Starting an automobile accessories business in Dubai offers a significant potential for growth and profitability. It is true regardless of your level of experience as an entrepreneur, investor, or vehicle components trader. This guide covers everything from the preliminary thoughts to business registration, location, and overcoming operational obstacles.
Key takeaways of the auto components market in Dubai
These are notable findings of the auto spare parts market in Dubai, UAE.
- Dubai is the perfect place for the car spare parts shops, because it is a global center for automotive trade.
- The need for vehicle accessories is gradually increasing both domestically in the UAE and abroad.
- Wholesale, retail, and online trading with e-commerce are some of the business concepts available to automobile components investors in Dubai.
- The business-friendly environment of Dubai provides 100% ownership, top-notch infrastructure, and tax perks to the automotive accessories traders.
- Success of a Dubai auto spare parts business depends on having active trading license and picking user accessible shop location.
Process to register license for Dubai auto spare parts firm
Establishing an automobile components trading business in Dubai requires a methodical licensing and registration process. The mechanism is a little complex, but still you have to follow all the requirements. This is the step-by-step procedure for registration of a license for auto spare parts business in Dubai.
- Select legal jurisdiction: Decide on forming automotive spare parts shop in Dubai mainland or in a suitable free trade zones. You may require a local service agent, but mainland companies can trade throughout the United Arab Emirates. Free zones limit you to conducting business within its area, or through a distributor on the mainland. However, they provide simple procedure, complete foreign ownership, and tax exemptions.
- Reserve business and trade name: Choose a company name that accurately describes the operations of your Dubai automobile accessories setup. Also, single out a trade name that follows your brand values. While conforming to the UAE’s corporate naming regulations, and upholding religious sentiments, it must avoid derogatory language.
- Get initial permission: Get a preliminary approval for your automotive components business in Dubai. In case, you opt for Dubai mainland, seek a no-objection certificate (NOC) from the Department of Economic Development (DED). Otherwise, if you are going with a free zone setup, then seek a go ahead from its authority.
- Secure business premises: Rent/lease an appropriate auto components center on an accessible location in Dubai. Remember, it is always more than just getting a physical address. Moreover, arrange a warehouse for the storage of auto spare parts.
- Obtain trade license: Apply for a commercial trade license for your Dubai automobile accessories company. Specifically, you need to mention “Auto Spare Parts Trading” in the business activity. Submit the licensing application with these essential documents, pay the fee, and acquire the license after approval.
- A valid UAE visa
- Copy of passport
- Business plan
- NOC from DED or a free zone
- Trade name reservation certificate
- Memorandum of Association (MOA)
- Articles of Association (AOA), if applicable
- Local Service Agent (LSA), if necessary
- Ejari agreement for lease/rental of premises
- Acquire import export code: Avail an import export code (IEC) from Dubai Customs. Also known as Customs Client Code, it enables you to import and export automotive components.
- Seek additional approvals: Get extra permissions from the Roads and Transport Authority (RTA) or Dubai Municipality, depending on your particular business operations.
Consult with us
FAQs about the spare auto components sector of Dubai
These are the answers to the common questions about the auto spare parts sector of Dubai, UAE.
The entire registration and licensing process typically takes 5 to 10 business days.
No! Full foreign ownership is available in the free zones of Dubai. Expatriate investors can have 100% ownership of the businesses on the Dubai mainland. However, the mainland businesses in other Emirates of the UAE may require a local corporate partner to run operations.
Yes! You can trade both new and second-hand auto spare parts in Dubai. However, make sure your license reflects the sales of the used automobile accessories. Also, your business must comply with the applicable vehicle safety standards of the UAE.
AED 50,000 to AED 150,000 is the usual range for startup expenditures, depending on your business strategy and region.
Although, you can operate your business online, a physical address is necessary for licensing.
Author Bio
