Dubai, a gem in the crown of the UAE, is renowned for its wealth and luxury. As one of the richest emirates in the wealthiest nation of the MENA region, it boasts a population of nearly 70,000 high-net-worth individuals. Add to this the thousands of affluent travellers who frequent the city, and the need for limousine services becomes evident.
Entrepreneurs should be aware that starting a limousine company in Dubai requires a fleet of at least 20 cars.
In this article, we dive deeper into the process of starting a limousine business in Dubai. We will explore the following topics:
- Limousine business in Dubai – an overview
- Limousine business licence in Dubai – step by step
- Cost of getting a limousine licence in Dubai
- Pros and cons of starting a limousine business
- Cost of running a limo business in Dubai
- Is a limousine business profitable?
- How Worldwide Formations can help
Limousine business in Dubai – an overview
The global limousine industry has grown significantly in the past few years – and Dubai is no exception. By 2025, the global industry is predicted to have grown by more than 7% annually. According to recent data, the limousine sector in Dubai showed an 85% growth rate in the second half of 2022, compared with the same period in 2021.
This sharp growth has been helped by the rise of AI and booking apps and an increasing consciousness of carbon footprints. Limousines provide a high-class and luxurious experience, while cutting down on emissions.
In Dubai, there are three main markets for limousine services: hotels, large businesses and individuals.
- Hotels are currently the largest market for limousines and luxury vehicles. Dubai is home to hundreds of high-end hotels hosting high-net-worth clients who require transportation. Many hotels provide this service free of charge for events, so it’s worth building relationships with this market.
- Large businesses are the second largest market for limousines. Important clients and employees regularly require transportation from the airport to the boardroom.
- Individuals and groups are another popular market for limousines. As a popular destination for weddings, hen nights, birthdays and other special occasions, the demand for limousines is high.
Limousine business licence in Dubai – step by step
Setting up any business in a new territory can be daunting, particularly for international expats who might not be familiar with the intricacies of local culture and law for a limousine License at Dubai. Worldwide Formations can help to simplify the process for you. Steps involved to form a limousine company license in Dubai are below:
Step 1: Name and define your business
First, choose a name for your limousine company. This will need to adhere to UAE naming conventions and should not be considered blasphemous or offensive in any way. You will also need to define your business activity to ensure you have the right licence.
Step 2: Choose your location
Next, you need to choose whether to operate in a free zone or on the mainland. Both locations have their advantages. Businesses registered in a free zone can enjoy 100% repatriation of profits, zero upfront capital and zero income tax.
Step 3: Submit your licence application form
Next, you must submit an application form for your business license. You will need to provide a range of documents, including copies of your passport, visas, proof of residency (if applicable) and evidence that your company name has been approved.
Step 4: Approval
Once your license has been approved, you can apply for your Emirates identity card. All businesses operating in the UAE are legally required to hold an Emirates ID card to operate a business in the UAE. The application process involves a medical check-up.
Cost of getting a limousine license in Dubai
The cost of obtaining a limousine license in Dubai, which generally ranges from AED 15,000 to 20,000, depends on various factors such as the number of shareholders, office location, and the number of vehicles. External approval costs can also vary based on the number of luxury cars. Notably, there is no need for a 5 million dirham deposit for the Roads and Transport Authority (RTA), and no local sponsor is required.
For a more accurate quote tailored to your specific needs and requirements, reach out to the team at email@example.com today.
Pros and cons of starting a limousine business
Running a limousine business in Dubai can be hugely profitable, with significant advantages such as:
High return on investment
While the startup costs for a limousine business in Dubai will be higher than a regular chauffeur service, the profit margins are higher too.
Setting up a limousine business in Dubai is relatively straightforward, particularly when you choose to use a company formation service such as Worldwide Formations.
Earnings from the outset
You can start earning from your limousine business with your first customer.
As a tourism and business hub, the demand for chauffeur and limousine services in Dubai is high. Hotels require elegant vehicles to ferry their high-net-worth clients, and large businesses need to transport clients and employees across the city. Dubai is a popular location for weddings, birthday parties and other special occasions, too. Many of these customers will be on the lookout for a luxurious ride.
However, it’s worth taking into consideration that, like any business, running a limousine service has its downsides.
High upfront costs
While obtaining a limousine license in Dubai is relatively affordable, purchasing or renting a limousine requires an upfront capital investment.
Limousines and luxurious SUVs come at a cost. You’ll need to pay for upkeep, additional drivers’ salaries, maintenance and storage.
Cyclical business model
It can be difficult to predict the peaks and troughs of business. The longer you operate, the better idea you can get of how much you will earn in any given month.
Cost of running a limo business in Dubai
The cost of running a limo business depends on various factors, such as how many and which types of cars are in your fleet. The total startup cost will amount to the cost of the license and the cost of the car, as well as marketing and upkeep. Prices could vary between AED 51,400 and AED 110,000. However, it is possible to keep costs low initially by limiting business to one or two vehicles.
Is a limousine business profitable?
Yes, running a limousine business can be profitable in Dubai, provided you invest in advertising, build a strong reputation and keep driving the bottom line. After accounting for startup costs, profit margins average around 75%.
How Worldwide Formations can help
Setting up a limousine business in Dubai can offer lucrative opportunities for entrepreneurs, but it pays to have local insights and market expertise. That’s where Worldwide Formations can help. As experts in business setup in the UAE, we can ensure that setting up a company in Dubai is as quick and pain-free as possible.
Worldwide Formations is a one-stop-shop for company formation that offers a range of value-added services, from license applications to VAT registration. Conveniently located at Farimont Dubai and DNATA Travel Center, we have helped countless aspiring entrepreneurs turn their business dreams into reality.
For more information and a personalised quote, please visit Worldwide Formations.