How to Set Up an Auto Repair Shop in the UAE

Author: Hanoof Al Naama
Published: December 5, 2024
Category: Business Activity

Overview of the UAE Auto Repair Industry

The UAE's auto repair industry represents a significant growth opportunity driven by several key factors. With an estimated 3.5 million vehicles on the road and counting, the automotive repair sector has evolved beyond basic car maintenance into a billion-dirham market where specialization and expertise are paramount.

Market Drivers and Demand Factors

The demand for auto repair services in the UAE is fueled by multiple factors:

Industry Growth Projections

The UAE auto repair market is positioned for substantial expansion. Projections suggest the market could reach AED 7.8 billion by 2027, offering significant opportunities for both new entrants and established businesses.

Key Industry Trends

Beyond traditional maintenance needs, several trends are reshaping the auto repair landscape:

Business Activities for Auto Repair Shops in the UAE

When establishing an auto repair shop in the UAE, entrepreneurs can choose from several business activity classifications. Each activity code defines the scope of services your business can legally provide.

4520.00 – Maintenance and Repair of Motor Vehicles

Scope of Services

This business activity encompasses a comprehensive range of services for motor vehicles including cars, trucks, vans, and buses. The activity covers:

Routine Maintenance:

Complex Repairs:

Parts Replacement:

Service Providers

This activity typically includes specialized garages, workshops, and authorized service centers that utilize diagnostic tools and employ skilled technicians.

Exclusions

Business activity 4520.00 excludes activities related to the retreading and rebuilding of tires.

Regulatory Requirements

Third-party Approval: Business activity 4520.00 requires approval from the Sharjah Traffic Committee following the issuance of a new license.

Filing of Economic Substance Return: Business activity 4520.00 is exempt from this requirement.

Anti-Money Laundering Compliance: Business activity 4520.00 is exempt from this requirement.

4520.01 – Maintenance and Repair of Motor Vehicles

Detailed Service Categories

This business activity focuses on comprehensive vehicle upkeep and restoration through various specialized services:

Mechanical Repairs

Diagnosing and fixing issues related to the vehicle's engine and drivetrain systems. Mechanics address:

Electrical Repairs

Services focused on the vehicle's electrical systems, including:

Electronic Injection Systems Repair

Specialized repair services for fuel injection systems, crucial for:

Ordinary Servicing

Routine maintenance services including:

Bodywork Repair

Services addressing structural and cosmetic damage:

Repair of Motor Vehicle Parts

Assessment and repair of individual vehicle components:

Washing, Polishing, etc.

Vehicle exterior enhancement services:

Spraying and Painting

Professional paint application services:

Repair of Screens and Windows

Glass repair and replacement services:

Repair of Motor Vehicle Seats

Seat-related repair services:

4520.02 – Tyre and Tube Repair, Fitting or Replacement

Service Scope

This business activity directly involves servicing vehicles through tire and tube-related services:

4520.03 – Anti-rust Treatment

Service Description

This business activity involves applying protective coatings or treatments to motor vehicles to prevent or minimize rust and corrosion. The service is part of vehicle maintenance and repair, aimed at:

4520.04 – Installation of Parts and Accessories not as Part of The Manufacturing Process

Service Scope

This business activity pertains to post-manufacturing modification and integration of automotive components and accessories. Services include:

Retrofit Installations:

Service Focus:

Exclusions for Activities 4520.01, 4520.02, 4520.03, and 4520.04

All four business activities exclude the retreading and rebuilding of tires, which are distinct from the auto repair services provided within these classifications.

Regulatory Requirements for Activities 4520.01, 4520.02, 4520.03, and 4520.04

Third-party Approval: No third-party approvals are required for business activities 4520.01, 4520.02, 4520.03, and 4520.04.

Filing of Economic Substance Return: Business activities 4520.01, 4520.02, 4520.03, and 4520.04 are exempt from this requirement.

Anti-Money Laundering Compliance: Business activities 4520.01, 4520.02, 4520.03, and 4520.04 are exempt from this requirement.

Additional Resources

For entrepreneurs looking to establish an auto repair business in the UAE, SPC Free Zone offers several resources:

Related Business Guides

Explore other business setup guides available:

This guide provides information on business activities and licensing requirements for auto repair shops in the UAE. For specific licensing assistance and business setup services, contact SPC Free Zone.