As the UAE continues to innovate and grow, so does the demand for auto repair shops. It has transcended mere market trends and become a vital service that’s gearing up for significant growth. With an estimated 3.5 million vehicles on the road and counting, the UAE’s auto repair industry is no longer about fixing cars but about tapping into a billion-dirham opportunity where specialisation and expertise reign.
The scorching desert heat isn’t just tough on people—it’s tough on vehicles too, creating a constant demand for maintenance and repair, especially for high-performance and luxury vehicles that dominate the UAE’s streets. Add to this a booming population, a growing expat community, and a strong economy, and you’ve got the perfect storm driving an unrelenting need for auto repair services.
Yet, what’s truly fueling this demand? Beyond the obvious need for vehicle maintenance, the rise of digital services, government mandates on vehicle safety inspections, and the sheer increase in high-value car imports are shifting gears for the industry. Projections suggest the market could hit AED 7.8 billion by 2027, offering both new entrants and established businesses significant room for growth.
Nonetheless, is it worth investing in this sector? Absolutely. So, with the industry’s promising outlook and lucrative opportunities, the next step is determining how to position your business within this thriving market. If you’re planning to establish an auto repair shop in the UAE, here are the various business activities you can choose under your license:
4520.00 – Maintenance and Repair of Motor Vehicles
This business activity involves a broad range of services aimed at ensuring the functionality, safety, and longevity of motor vehicles such as cars, trucks, vans, and buses. This activity includes routine maintenance tasks like oil changes, tire rotations, brake adjustments, and fluid checks, as well as more complex repairs, such as engine diagnostics, transmission repairs, and electrical system troubleshooting. It also covers the replacement of faulty or worn-out parts like batteries, brakes, and exhaust systems. The service providers typically include specialised garages, workshops, and authorised service centres that use diagnostic tools and skilled technicians to perform the work.
However, business activity 4520.00 excludes activities related to the retreading and rebuilding of tyres. The scope of this business category is critical for vehicle owners to maintain roadworthiness, comply with safety regulations, and prevent costly breakdowns, contributing to overall vehicle efficiency and durability.
- 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
Maintenance and repair of motor vehicles refers to the business activity focused on the upkeep and restoration of motor vehicles through various services, including:
- Mechanical Repairs: This involves diagnosing and fixing issues related to the vehicle’s engine and drivetrain systems. Mechanics address problems such as engine failures, transmission malfunctions, and other critical mechanical components to ensure optimal performance and safety.
- Electrical Repairs: This service focuses on the vehicle’s electrical systems, including the battery, starter, and alternator. Technicians troubleshoot and repair wiring issues, faulty sensors, and other electrical components, ensuring that all electronic features function seamlessly.
- Electronic Injection Systems Repair: This specialised repair involves addressing malfunctions in fuel injection systems, which are crucial for engine efficiency and performance. Technicians may recalibrate or replace components to optimise fuel delivery and emissions control.
- Ordinary Servicing: Routine maintenance services, such as oil changes, filter replacements, and tire rotations, fall under this category. These essential services help prolong the life of the vehicle and ensure it operates efficiently, reducing the risk of major repairs in the future.
- Bodywork Repair: This service addresses both structural and cosmetic damage to the vehicle’s body, including dents, scratches, and collision-related repairs. Skilled technicians restore the vehicle’s appearance while maintaining its structural integrity.
- Repair of Motor Vehicle Parts: This includes the assessment and repair of individual vehicle components, such as brakes, suspensions, and exhaust systems. Ensuring that all parts are functioning correctly is critical to overall vehicle safety and reliability.
- Washing, Polishing, etc.: This service enhances the vehicle’s exterior through thorough cleaning, polishing, and detailing. Regular washing and care not only improve the vehicle’s aesthetic appeal but also help protect its finish from environmental damage.
- Spraying and Painting: Professionals in this area apply new paint or touch-ups to restore the vehicle’s exterior. This process may involve colour matching and the application of protective coatings to enhance durability and appearance.
- Repair of Screens and Windows: This service includes fixing or replacing damaged windshields, side windows, and rear screens. Proper repair is essential for safety and visibility, ensuring that the vehicle meets regulatory standards.
- Repair of Motor Vehicle Seats: This involves fixing issues related to seat comfort and aesthetics, such as torn upholstery, malfunctioning seat mechanisms, and structural repairs.
4520.02 – Tyre And Tube Repair, Fitting or Replacement
This business activity directly involves the servicing of vehicles through the repair, installation, or replacement of tyres and tubes. This includes activities such as patching or replacing damaged tyres, fitting new tyres onto vehicles, and ensuring proper inflation and alignment of tyres to enhance vehicle performance and safety.
4520.03 – Anti-rust Treatment
This business activity, essentially, refers to the process of applying protective coatings or treatments to motor vehicles to prevent or minimise rust and corrosion. This service is part of the maintenance and repair of motor vehicles, aimed at extending the lifespan of vehicle components, particularly those exposed to moisture and harsh environmental conditions.
4520.04 – Installation of Parts and Accessories not as Part of The Manufacturing Process
This business activity pertains to the post-manufacturing modification and integration of automotive components and accessories in motor vehicles. This encompasses retrofit installations, where non-original equipment manufacturer (OEM) parts are fitted, including aftermarket enhancements, performance modifications, and ancillary systems. This activity focuses on service operations that do not involve the original production line processes but instead occur in a maintenance and repair environment, aiming to optimise vehicle performance, aesthetics, and functionality through skilled mechanical labour and technical expertise.
Exclusions directly related to business activities 4520.01, 4520.02, 4520.03, and 4520.04 include the retreading and rebuilding of tyres. These exclusions are distinct from the auto repair services provided within this class.
- Third-party Approval: No third-party approvals are required for the 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.
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