Setup a Used Car Business in Dubai

by Zaara 24, Aug 2021

Setup a Used Car Business in Dubai

According to the Roads and Transport Authority, do you know that Dubai has 540 cars per 1,000 people? It is the highest in the Gulf Corporation Council region and also one of the highest in the world. As Dubai continues to experience a rise in population in the lead up to Dubai expo 2020, the used car sales will go up since new cars have more significant depreciation. This is also increasing the business opportunities in Dubai for expo 2020

In this blog, we will tell you how to set up a used car business in Dubai in the lead up to Dubai expo 2020

Used Car Business in Dubai

One of the leading investment decisions in an individual's life is deciding to buy their own car. There are many reasons for trading used cars in Dubai, and many people choose used cars option due to low cost.

 In the lead up to expo Dubai, the used car industry is outperforming the more sluggish market for new cars. Dubai 2020 used car market has a broad collection of marks and models, mostly which are less used, manufacturer warranty and service contracts. If you really want to be a triumphant car dealer, then you have to be energetic and well aware of market trends about the types, pricing, and brands, which are highly in demand and should be easily available for the buyers.

Activity details for used car business setup in Dubai

Activity Name

Used Automobile Trading

Activity Code


Activity Group

Exchange in motor vehicles and motorcycles

License Type


Activity Description

Includes reselling used vehicles for transportation, whether being used for short or long term.

How to Set up a Used Car Business in Dubai

Setting up a business in Dubai is not a time-consuming activity at all. It will hardly take two weeks to get the trade license and start the business in Dubai. The only delay will be the office space and location, which you have to decide before starting the licensing process.

A used car trading business in Dubai is done in 3 ways. They are

  • Freezone: Business setup allows you 100% ownership and allows you to do business in Free zones within a suitable Dubai free zone only.
  • Mainland: Business setup allows you to start a business in Dubai in any part of Dubai expo 2020 locations. It also allows you to do business locally and internationally.
  • Offshore: Business set up lets you do business internationally only.

Key Points to Understand for Setting Up Used Car Business in Dubai

  1. Type of Business:  You should define the kind of license you need like a professional, commercial, or industrial license. As you have chosen your activity as used car trading, then this license is defined as a commercial license
  2. Type of Business Ownership: As it’s a commercial business, it should have a minimum of two and a maximum of 50 shareholders. LLC can be in only Commercial and industrial activities. Such companies need Dubai to sponsor their businesses.
  3. Legal Structure: 51% proprietorship should be with UAE nationals. The profits can be yielded in a different ratio.
  4. Trade Name: The trade name plays a crucial part of the legal procedure. The trade name indicates the nature of the business.
  5. Location: As per the activity of Setting up used car business in Dubai in the lead up to Dubai expo 2020, the Dubai Economic Department has already assigned the place at "AL AWEER AUTO MARKET." The office space and storeroom have to be located inside the designated area.
  6. Legal Support: Setting up used Car business in Dubai 2020 requires external approval from the Dubai Municipality – "Department of Public Market."

License to Execute a Business Selling Motor Vehicles in Dubai

You should keep in mind that the registration procedure of your company should be subject to an exclusive license granted by the authorities that supervise the activities of the Dubai Automotive Zone(DAZ). The commercial license is available for one year and must be restored before getting expired within a couple of days.

 When you are applying for a commercial license in DAZ, your company documents should be enough. For a successful business in the used car business in Dubai in the lead to Dubai world expo, we suggest you to create a website and present your company and car collection for sale. When everything will be ready, you can enter the market as a car dealer.

Starting Used Car Business in Dubai

Once you are ready with your trade license for Used Car Trading, you have to follow a few steps then to ensure that your business is legally compliant and will grow timely.


Register for VAT

You need to register for VAT if the threshold surpasses AED 1,87,500 that is voluntary registration. If the threshold passes over by AED 3, 50,000, that will be mandatory registration.

Open a Business Bank Account

You must open a bank account in Dubai. It is essential for recording your various outlays and sources of income, which are vital to understanding your business's financial performance. Keeping a precise and detailed account will significantly simplify the VAT registration and return filling.

Obtain Necessary Permits and Licenses

You must obtain a necessary license to do proper business, failing to which can result in heavy fines and may lead to shutting down your business.

Establish your Web Presence

You need to establish a website for your company. It will allow the customers to learn more about your services and the product you offer. You can use social media platforms to attract new customers.

We can say that Expo 2020 has an immense platform for everyone to come forward and set up their business, and you can be one of them. Dubai is the perfect place for you. Our business consultants in Dubai will help you in setting up a business in Dubai

Why Us?

We, at Commitbiz, have been one of the business consultant players in the UAE region. We provide services for companies and business people interested in establishing their progress in the UAE. If you need any further assistance, contact us. We will be glad to help you.


Which license is required for vehicle reselling business in Dubai?

You require a commercial license.

Which is the best freezone to start an automotive business?

Dubai Auto Zone (DAZ), Dubai Cars and Automotive Zone (DUCAMS) are a few best freezones for automotive businesses.

How to file VAT online?

You can use FTA’s e-tax portal for VAT returns.

How to start a used car dealership in Dubai?

Register yourself as an authorised dealer with the Road and Transport Authority (RTA) of Dubai.

Is the used car selling business profitable in Dubai?

Yes, having a car has become mandatory in Dubai and the used car business clearly targets a group audience and thus becomes so profitable. 

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