Foreign businessmen are generally looking to open an auto parts store in Dubai. Because the GCC’s (Gulf Cooperation Council) second-largest vehicle market is in the UAE. The potential of this market is remarkable. Businesspeople and investors from across the globe are encouraged by this fact to set up an auto spare parts business in Dubai, UAE. Additionally, Emirates provides the perfect setting for the growth of businesses in several market sectors which leads to an outstanding return on investment.
The demand for car parts service in Dubai will also continue to be high due to a number of things, including growth in population, anticipated increases in auto sales in the future, and increasing competition in this industry. The advantages of launching this business in Dubai, the process of establishing the company, and the cost of an auto spare parts trade license for businessmen, are all crucial things for this business that are covered in this article.
Documents Required To Set Up an Auto Spare Parts Business in Dubai
Entrepreneurs and investors who want to open an auto parts store in the UAE must have the following documents to smoothly establish their auto spare parts business in Dubai:
- A passport-sized photo
- Copy of the company shareholders’ passports
- Entry stamp or Visa page
- Partnership agreement and MOA
- Filled registration application form
- Office lease agreements
- Documentation of incorporation (if required)
- NOC, to be provided by the employer, if you are a Dubai resident
- Initial approval certificate’s fee receipt
- Planned business activities
How to Set Up an Auto Spare Parts Business in Dubai, UAE?
Follow the steps mentioned ahead to start your own auto spare parts business in Dubai, UAE right now:
Step 1. Choose the Business Activity
Choosing your business activity is the first step. Prepare a list of business activities that you are willing to perform which will be submitted to a legal body such as the DED (Department of Economic Development). The business can be physical or online, offering 24-hour active services, auto parts trading, or some other mode to conduct the business.
Step 2. Define Your Market
To ensure that you can outperform your competitors, you must first conduct market research in your target area. This is the second step of the process and a crucial one. Compare the geographic location of the already established spare parts business to the population and size of the city.
Step 3. Craft a Solid Business Plan
Next up, you should make a strong business plan for the company. Information about your business operations should be included in your business strategy. For instance, how you will purchase your auto parts, what will be the product line, what price you will set to make a profit, and other similar things. The local competition and target audience should be mentioned in your marketing plan.
Step 4. Company Name Registration
There are certain rules and regulations for business names in Dubai that you have to follow when naming a business. One of the rules is that the business name must be appealing and distinctive. Additionally, it must not refer to or insult a certain religion. Do not use abbreviations if you are willing to name a business after yourself. Also, avoid choosing a name inspired by names of popular firms and businesses. Thus, have these things in mind as you choose the name of your auto spare parts company.
Step 5. Pick a Business Location
Depending on the needs of the business, picking the most suitable location is important. These specifications may include things like team size, accessibility to the market, transportation, and client demographics. Either you can have 100% ownership (free zone) or an Emirati owns 51% of your shares (mainland), it depends on where you set up your business.
Step 6. Get the Initial Approvals
Submit the required documents and paperwork to the DED (Department of Economic Development) to get the pre-approval certificate. Later on, you will need to get this certificate approved by some other legal governmental bodies that run the respective economic zone.
Step 7. Issue the Legal Business License
A trade license is either professional or commercial. The approvals and business activities decide which license you should have to operate your business in Dubai, UAE in a legal way. As far as an auto spare parts trading License in Dubai is concerned, it falls under the category of a commercial License.
Step 8. Apply for Visas
Next up, you have to apply for visas. Whether it is for you, your family, business partners, or staff, managing visas is extremely crucial. When this is taken care of, your legal and business setup requirements will be substantially met.
The application procedure for visas is as follows:
- Applying for an entry permit
- Status modification
- Successful medical examination
- Registering for an Emirates ID
- Stamping of the visa
Step 9. Open a Bank Account
To set up a trading business like this one in Dubai, UAE, you’ll also need a bank account. You can choose from a variety of local and international banks. Overseas businessmen and entrepreneurs, however, You may find opening an account a difficult task to perform.
In order to find the best financial institution for your business needs and the one most likely to provide you with excellent corporate banking services, you should familiarize yourself with different financial institutions.
Benefits of Starting an Auto Parts Trading Business in Dubai, UAE
Try to start an auto spare parts store if you are oversea investors or a businessman looking to establish a retail business in Dubai’s automotive industry. Dubai provides a platform for expanding businesses both abroad and domestically. The following advantages can be availed if you establish such a business in Dubai, UAE:
Beneficial Locations of the Free Zone
Entrepreneurs and investors are given access to the UAE’s favorable business conditions through Dubai’s free zones. If you want to open an auto parts store in the United Arab Emirates quickly, consider opening in the Dubai free zone. Starting a business in the free zones lets you get full ownership of the auto spare parts company. Whatsmore, in a Dubai free zone, profits and capital are 100% repatriable.
Mature Automobile Manufacturing Sector
The residents of Dubai particularly fall for expensive vehicles. People in Dubai and UAE enjoy customizing and modifying their vehicles to make them look and perform well. In Dubai, there is a huge demand for automotive modifications since young people want their cars to have a unique appearance and perform better. As a result, businessmen and entrepreneurs have an excellent opportunity to conduct business in the area of motor vehicles, spare parts, and autos given the sector’s high level of development in recent years.
Support from the Local Government
The Dubai Emirate Government encourages the development of the automotive industry and draws in foreign capital to the country’s economy. Furthermore, the government of Dubai offers enormous support for auto parts production through Orignal Equipment Manufacturers (OEMs).
This lowers costs and increases sales of auto parts even more across the UAE. In addition to that, Dubai’s developed logistics system and international transportation centers depict a positive image for businesspeople who want to start an auto spare parts business in the UAE.
Amazing Location to Live and Work
You can live in luxury in the city’s finest areas if you own an auto spare parts business in Dubai, UAE. For business owners and investors, working anywhere in Dubai is fantastic. You will undoubtedly feel wealthy to be living here because of the awesome lifestyle, low taxes, and great high standard of living.
Dubai’s standard of living is improving faster than that of other rapidly industrializing countries across the globe. Dubai provides first-rate products and facilities that enable you to live the life you want.
Advantages of Starting an Auto Parts Business in Dubai Free Zone
There are numerous advantages to starting an auto parts business in the free zones of Dubai. The free zone in Dubai offers foreign companies beneficial business conditions in the United Arab Emirates. The expansion of the auto manufacturing industry is the primary driver behind opening an auto parts store here. It is the perfect global marketplace for companies that deal with motor vehicles and their replacement parts.
The Dubai government promotes the growth of the automotive industry and brings significant capital into the country’s economy. The UAE’s well-established international transport hubs and logistics systems are a bonus for setting up companies in the country.
Cost of a Spare Parts Trading License
The cost of a spare parts trading license is not fixed and varies from case to case. In general, depending on the size and type of your business, this license in Dubai might cost anywhere from AED 8,000 to AED 45,000.
If you plan to import spare parts or other things, you’ll also need to consider the customs duties, cost of the facility, and equipment.
Get in touch with Riz and Mona for a detailed analysis of all expenses related to launching your auto spare parts business in Dubai, UAE.
FAQs – Frequently Asked Questions
How do I start my own auto spare business?
Follow the following 9 steps to Start an Automobile Spare Parts Business:
Step 1. Choose a Business Activity
Step 2. Define Your Market
Step 3. Craft a Solid Business Plan
Step 4. Company Name Registration
Step 5. Pick a Business Location
Step 6. Get the Initial Approvals
Step 7. Issue the Legal Business License
Step 8. Apply for Visas
Step 9. Open a Bank Account
Is the automobile spare parts business profitable?
Yes, the automobile spare parts business is profitable. The market for car parts is always growing and has a bright future for all types of companies. It is one of the most successful and lucrative vehicle businesses out there.
How do you grow the auto spare parts business?
You must find customers who are in need of the items and level of service you are providing and clearly convey the advantages to them in order to expand your auto spare parts business. To grow your business,
- Beat the competition
- Find prospects
- Make trading simple
- Be convenient and adaptable
- Provide for big customers
- Promote your company
What car parts are in high demand?
AC compressors, engines, tail lamps, side view mirrors, alternators, and many other car parts are in high demand in Dubai.
Is selling car parts a good business?
Yes, selling car parts is a good business. The automotive aftermarket is a good area to start if you’re a small business owner looking to sell auto components online. Global Market Insights, Inc. predicts that by 2024, the aftermarket sector would generate $1.4 trillion in revenue.
Start Your Auto Spare Parts Trading Business in Dubai with Riz and Mona
If you are connected with the proper advisory firm in the UAE, starting a business in Dubai can be simple and efficient. Riz and Mona Company Formation Experts is one of the top business consulting organizations in Dubai that you can reach out to for this purpose. Not only will our team of professionals help you comprehend the available company formation options in Dubai, but they will also direct you through the licensing processes, offer guidance on how to start a business in the Emirates, and many other related procedures. Contact us right now and start your auto spare parts business in Dubai without wasting any time.
