How to Start Car Rental Business in Dubai - RTA Approval & License Cost

In Dubai, cars are more than a way to commute - they’re a lifestyle. From flashy convertibles cruising Sheikh Zayed Road to luxury SUVs parked outside five-star hotels, it’s no surprise that the car rental business in Dubai is booming.

And here’s what’s even more exciting - you can be a part of this growing industry. Whether you want to start a rent-a-car company for tourists, cater to luxury-loving residents, or target long-term corporate rentals, Dubai gives you the infrastructure, the demand, and the legal support to succeed.

But how do you actually go about setting up a car rental company in Dubai? What are the licenses required? How much does it cost? What approvals are mandatory from RTA? And how can you stay 100% compliant?

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Let’s walk through all of that - step by step - and show you how COFTT helped real clients build car rental businesses from scratch.

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Like every business in Dubai, a valid trade license is the first legal step to getting started - and the car rental business is no different. However, what makes this industry unique is that it’s also regulated by the RTA (Roads and Transport Authority). That means in addition to your DED license, you’ll need a separate RTA approval before you can begin operations.

So, the process goes like this: first, you apply for initial approval from the DED, then you submit your application to the RTA for their activity-specific permit. Once both approvals are in place, you pay the final license fee and get officially licensed to operate your rent-a-car business in Dubai. Simple, structured, and fully legal - just how Dubai likes it.

The registration process for a car rental company is similar to any other company and we have outlined the steps below. If you want to know about each and every step in detail then please read our detailed article on how to open a company in Dubai.

Step to Start Car Rental Business -

Now that you understand the importance of having both a DED license and RTA approval, let’s walk through the actual business registration process. Each of these steps is part of building your legal foundation - and once done, your company will be 100% ready to operate in Dubai.

1. Finalise the Legal Structure of Your Business

Your first decision is choosing the legal form of your company. For most entrepreneurs, the best option is a Limited Liability Company (LLC). It’s flexible, allows for 100% foreign ownership (with a local service agent if needed), and works perfectly for car rental activities.

Other options like Sole Establishment or Civil Company exist, but LLC is the most widely accepted for investors starting with a fleet of cars - big or small.

2. Reserve a Trade Name

Next, you’ll need to choose and reserve a name for your business. The name should be unique, reflect your activity, and comply with Dubai’s naming regulations (no offensive terms, religious references, or duplicate names).

You can submit up to three name options, and the DED will approve the first available one.

3. Apply for Initial Approval from DED

Once your name is approved, it’s time to submit an initial approval request to the Department of Economy & Tourism.

This step confirms that:

a. Your business activity is permitted
b. Your chosen partners are eligible
c. Your legal structure is approved

The DED issues a green light to proceed, and now you can move to the next stage.

4. Apply for External Approval (RTA Permit)

Since you’re setting up a car rental company, you need special approval from the RTA (Roads & Transport Authority).

RTA checks your:

a. Intended vehicle fleet
b. Office and parking space
c. Compliance commitment
d. Business plan
e. Partner documents

Once approved, RTA will issue a commercial transport activity permit. This is mandatory before you pay your license fee and get your trade license issued. We will discuss RTA approval process later in this article.

5. Finalise Your Lease or Virtual Office Agreement

Your business must have a legal address. If you’re starting small or working remotely, you can opt for a virtual office in a business center - this is accepted for initial DED licensing.

If you plan to run a full-fledged rental outlet, you’ll need:

a. A proper lease agreement (Ejari)
b. Dedicated parking space (required by RTA)

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COFTT can help you choose the right option based on your setup size and budget.

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6. Draft and Notarize the Memorandum of Association (MOA)

For LLCs, the MOA (Memorandum of Association) is a legally binding document that outlines: Ownership percentages, managerial roles, business activities and capital contributions.

We’ll help you draft your MOA, submit it to Dubai Courts for notarization, and include all DED-mandated clauses for a transport-related business.

7. Pay the License Fee and Receive Your Trade License

Once everything is approved - including RTA clearance - it’s time to pay the final trade license fee.

This includes:

a. License issuance
b. Market fee (5% of rent if physical office)
c. Commercial activity charges

You’ll then receive your DED trade license, and your business will be officially active.

RTA Approval for Car Rental Business

Once you have DED’s initial approval in hand, the next step is to submit a permit application to the RTA through their approved service channels.

Here’s what you need to include in your RTA application:

a. Initial approval or valid commercial license copy
b. Owner’s passport or Emirates ID (including all partners)
c. Residency visa copy for non-citizen partners
d. Any other approvals if required by law (like Free Zones or special areas)
e. A signed undertaking to comply with RTA's rules and conditions

Fees for RTA Car Rental Permit

Let’s break down the costs briefly:

Permit renewal fee: AED 1,000
RTA training fee: AED 100

Annual permit fee: Based on your fleet size

Up to 100 vehicles: AED 2,000
101–500 vehicles: AED 4,000
501–1,000 vehicles: AED 5,000
1,001+ vehicles: AED 6,000

This permit is renewed annually, and you’ll need to maintain compliance with RTA’s fleet and office space requirements.

RTA Requirements for Operating Legally

Once you receive your RTA approval, there are specific responsibilities and compliance requirements your company must follow - and this is where many new businesses need support.

Let’s highlight the most important ones:

1. Provide an actual office space and approved parking
2. All rental vehicles must be registered in Dubai
3. No vehicle branding without prior RTA approval
4. Install GPS tracking systems from approved vendors
5. Use only RTA-approved platforms and systems, including the TARS (Transport Activities Rental System)

You’ll also need to ensure:

1. The vehicle passes technical inspection
2. You follow the vehicle age rules (typically 3–4 years max from registration, depending on type)
3. You keep updated digital records of rentals
4. You don’t transport passengers - unless they’re staff

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Sounds like a lot? Don’t worry - COFTT can manage all of this for you so you stay compliant and avoid delays.

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Special Vehicle Age & Type Rules

The RTA is strict about vehicle lifespan and classification, especially for luxury and elite vehicles.

Here’s a quick summary:

New vehicles: Must be 0 km and bought from an agent inside the UAE
Used vehicles: Can’t be more than 3–4 years old at the time of registration
Elite & Luxury vehicles: Must be on the RTA-approved list

All vehicles must be replaced after a certain number of years (usually 4–10 years depending on type)

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For example, if you're offering premium cars like Range Rover or Mercedes S-Class, they need to be on the approved luxury list, and you’ll need special documentation.

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Final Step: Vehicle Registration Under Your License

Once the permit is approved and your vehicles meet all RTA criteria, it’s time to register each car under your commercial car rental license.

Each car must be:

a. Registered in Dubai
b. Tagged under your company license
c. Fully insured for rental use
d. Fitted with RTA-approved tracking systems

After that - you're ready to operate.

Car Rental License Cost

The total cost to set up a car rental company in Dubai will depend on your setup, but here’s a realistic estimate to help you plan. The initial incorporation, including trade name reservation and MOA drafting, typically costs AED 1,250. You’ll then need to pay AED 1,050 for RTA activity approval, plus AED 2,500 for NOC-related formalities.

RTA also requires an online training, which costs around AED 1000 (contact us for updated pricing), followed by licensing documentation fees of AED 1,050.

The main license fee itself is approximately AED 15,000, plus a 5% market fee based on your office rental value. Compliance and supporting documentation may add another AED 3,500 + VAT, and if you choose to go with a virtual office, budget an additional AED 7,000 - which often includes inspection clearance.

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At COFTT, we simplify this entire cost structure and guide you through every fee, approval, and form. Any outlined fee structure can change at any time, please get it touch with us for updated pricing.

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COFTT Can Handle the Entire RTA Process for You

We know - paperwork process, technical specs, permit templates, and system registrations can feel overwhelming. That’s where COFTT steps in.

We help you:

1. Get your DED license
2. Prepare and submit your RTA application
3. Assist in system registrations and approvals
4. Assist in staying compliant year-round

Whether you're starting with 5 vehicles or 500, we’ll guide you every step of the way.

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Let COFTT help you start the right way, stay compliant, and grow smartly. From DED licensing to RTA approvals, our team will handle it all - while you focus on building your fleet and brand. Contact us today - Email us at info@coftt.com or submit a contact form.