The efficacy of a business plan depends upon the profitability of your proposed business venture. In that sense, setting up a car wash business in Dubai makes business sense as RTA data suggests that every second person now owns a car in the emirate. Initiating the process of business setup in Dubai by opening a car wash service seems to be promising due to the presence of people with high disposable income of the residents and citizens.
The desert-like conditions of the emirate is an advantage for the entrepreneurs as it makes the car owners in constant need of getting their vehicles cleaned and polished. The entrepreneurs can seek the help of business setup consultants in Dubai for obtaining a car wash license as they possess the legal know-how. With the right support, you could be up and running your business in simple steps. Before we look into the formation process, here are a few things to keep in mind when starting a car wash business in Dubai mainland.
Profitability of Setting up a Car Wash Business in Dubai
The landscape of business setup in Dubai is conducive to the car washing companies as the emirate has one of the highest vehicle densities in the world. As per RTA data published by Gulf News, the number of registered vehicles in Dubai crossed 1.8 million as of July 2020 compared to 1.4 million in 2015. Also, the number of driver licenses increased to 2.5 million in 2020. For Dubai residents, owning a car and maintaining it properly is a lifestyle choice rather than of necessity.
Being a tax-free jurisdiction, the people here enjoy higher standards of living compared to many other countries. Owning a car and maintaining it with regular washing and grooming is a matter of prestige for the residents and citizens. Also, the highly developed and well-maintained roads contribute to the increase in car purchases. All these factors augur well for the profitability of car washing businesses in Dubai. The car purchases are not going to die down soon and the demand for car washing services in Dubai will only surge.
The Right Location for a Car Wash Centre
It is better to start a car wash business in Dubai mainland rather than within any of the 30 plus free zones in the emirate. If incorporated in a free zone, you can operate only within the free zone and the potential customer base will be narrow. On the other hand, setting up a company in Dubai mainland allows you to cater to customers from any part of the UAE. However, the license will be issued only if the car wash Centre is located in gas/oil stations or industrial areas. If in doubt regarding the location choice, consult with the best business setup consultants in Dubai.
The Process of Obtaining a Car Wash License in Dubai
A license issued by the Department of Economic Development (DED) is mandatory for any investor initiating the process of business setup in Dubai mainland. A car wash license essentially comes under the broader category of a professional license in Dubai. Since it is a professional license, you need to appoint a Local Service Agent (LSA), which will grant you 100% ownership in your firm. The following are the major steps in obtaining a car wash license in Dubai mainland:
- Identify the right business activity
- Select a few trade names
- Determine the legal structure
- Apply for initial approval from DED
- Draft a Local Service Agent Agreement (LSA)
- Rent a space at the right location
- Obtain a tenancy contract from the landlord (Ejari)
- External approval from RTA in case it’s a mobile car wash
- Issuance of trade license
Are you ready to start your car wash business in Dubai, UAE?
Hopefully, this guide has made clear that if you’re armed with the right knowledge, setting up a car wash company in Dubai doesn’t have to be overly complicated. That being said, it does require a level of prior knowledge of the process of business setup in Dubai. What’s more, it is important to note that the application process is only straightforward if your license application is complete at the time of submission and free from errors. To avoid such mistakes, it’s a good idea to work with business setup consultants in Dubai such as Jitendra Business Consultants (JBC).
We are a team of company formation specialists in Dubai who are passionate about bringing the dreams of aspiring entrepreneurs and SMEs to life. As well as handling your license application, JBC can also assist with the opening of corporate bank accounts and advise on the most appropriate legal structure to suit your specific needs. In short, our experts can establish your company on your behalf, leaving you free to get on with running your business. Get in touch today to see how we can help set up your car wash company in Dubai.