Used car business in Dubai
One of the main investment decisions in many people’s lives are when they deciding to buy own car. There are many reasons in Dubai for car replacement and many consumers choose used cars option due to low cost. As in case of any maturing market, the recent years have seen that used car industry Out Space the more sluggish market for new cars. Over all Dubai used car market little to be desired with the broad array of marks and models, mostly which are light used and often with manufacturer warranty and service contracts. If you really wish to be a successful car dealer, than you need to be active and well aware of market trends all the time about the types, brands and pricing, which are highly in demand should be available with your to satisfy your buyers.
Activity details for used car business setup in Dubai
Activity Name: Used Automobile Trading
Activity Code: 4510901
Activity Group: Trading In Motor Vehicle and Motorcycles
License Type: Commercial
Activity Description: Includes reselling used vehicles for passenger transportation, whether being used for short or long term.
How to set up a used car business
Setting up a business in Dubai is no more a time consuming activity, it will hardly takes a 2 weeks time to get the trade license and start the business the only delay will be the office space and location which you have to finalize before starting the licensing process.
A used car trading business setup in Dubai is done in 3 ways such as:
- Mainland:Business setup allows you to open business any part of Dubai and can do business locally as well as internationally.
- Free zone: Business setup allows offers you 100% ownership and allows you to do business with in respective free zone only.
- Offshore: Business set up allows you to do business internationally only.
For used automobile business in Dubai one should understand following points:
- Type of Business: Once you select a type of activity which you want to set up the business that is used car trading than you should define the kind of license you require like commercial, professional or industrial license, as this license is defined as Commercial License.
- Type of Business Ownership: As per the activity Used Car trading it’s a commercial type of business and it can have 2 to 50 shareholders, LLC can indulge in only Commercial and industrial activities. Such companies need UAE national to sponsor their businesses.
- Legal Structure: 51% ownership should be with UAE nationals but profits can be accorded in different ratio.
- Trade Name: Trade name or Business name plays a vital part of the legal procedure. Trade name should indicate the nature of business.
- Location: As per the activity of Used Car Trading the Dubai Economic Department have already allocated the place which is at “AL AWEER AUTO MARKET” the office space and warehouse has to be located inside the designated area.
- Legal Support: Used Car Trading setup in Dubai require external approval from Dubai Municipality – “Department of Public Market”
Starting used car business
Once you are ready with your trade license for Used Car Trading, few steps have to be followed to ensure that your used car business is legally compliant and grow timely.
Register for VAT
You need to register for VAT if the threshold over by AED 1, 87,500 which is Voluntary registration and if the threshold pass over by AED 3, 50,000 will be Mandatory registration.
Open a Business Bank Account
By opening bank account in Dubai essential for recording your various expenses and sources of income which are critical to understand the financial performance of your business. Keeping accurate and detailed account will greatly simplify the VAT registration and return filling.
Obtain necessary permits and licenses
Need to obtain necessary license to do a proper business, failing to acquire related permits can result in hefty fines and may lead to shutting down the business
Establish your web presence
Your company website will allow customers to learn more about your services and the product you offer you can use social media to attract new clients or customers.
This blog post written by Ms. Nausheen, Business adviser at Flyingcolour business Setup, Accounting & VAT Service in Dubai and UAE, emphasize in providing the best advisory and customer satisfaction to clients. Feel free to contact us +971 4 4542366 or send inquiry to info[at]flyingcolour[dot]com