Spare Parts Business in the UAE Guide

Over the past three years, the spare parts industry has undergone a significant transformation. In the wake of Covid-19, many spare parts business owners have needed to adapt in order to gain a competitive edge and are looking to more lucrative markets, such as the UAE, to grow their businesses. Entrepreneurs looking to start up a spare parts business with the best chance of success are turning to the region, too.

In this article, we’ll discuss the opportunities, legal requirements and setup process for launching a spare parts business in the UAE. We’ll explore the following topics:

• Spare parts business in the UAE – the market opportunity
• Steps to Starting a spare parts business in the UAE
• Benefits of starting a spare parts business in the UAE
• Spare parts business license cost
• Why work with SPC Free Zone?

Spare Parts Business in the UAE – The Market Opportunity

The spare parts industry can be a lucrative space to move into anywhere in the world, but particularly so in the UAE. The region is a leading supplier of spare parts for Iran, India, Africa and Eastern Europe. It is also the second-largest automotive market in the Gulf Cooperation Council (GCC), with notably high demand for parts such as radiators, exhausts and electrical components. This, coupled with a rapidly growing population and ongoing construction development, means this market is only set to get stronger too.

As rising inflation and interest rates slow down the automotive industry, demand for spare parts will grow too. Reconstruction and personalisation is already rising in popularity in the UAE, particularly amongst younger generations. The government is also committed to investing in the latest technologies, like 3D printing. As this develops and demand increases, business owners based in the UAE will be able to optimise their production lines to produce more for less.

Steps to Start a Spare Parts Business in the UAE

To start a spare parts business in the UAE, you’ll need to complete several steps. We’ve broken down the process into four simple stages to give you an idea of what to expect.

Stage 1: Pick your business name and register your company

First, you’ll need to choose your company trade name. Make sure this adheres to the UAE’s specific trading requirements and does not include any blasphemous or offensive language. Once you’ve selected your trade name, you can submit an approval form. If the authorities approve this, you can receive your license in under two hours.

Stage 2: Sign up for e-channel services

To help speed up the business setup process, the UAE has introduced an e-channel service. This online system requires minimal paperwork and enables you to get your entry permit faster. Your entry permit is a temporary visa and is valid for 60 days.

Stage 3: Change of visa status and Emirates ID

After you’ve received your entry permit, you’ll be able to update your visa. Depending on where you are from, you can do this in-country or by briefly exiting and re-entering the country. Then, you’ll need to take a medical test, which involves X-rays, blood tests and other relevant check-ups. Once you’ve passed this, you can apply for your Emirates ID card.

Related Article: Emirates ID Renewal Guide for Expats

Stage 4: Open your bank account and rent a property

As soon as you receive your Emirates ID card, you’ll legally be able to open a corporate bank account, rent a property and sign leases, and take out phone contracts in the UAE.

Applying for a spare parts business license and setting up your business in the UAE isn’t exactly rocket science, but it does require some careful planning and knowledge of the specific legal and local business requirements of the market. Working with SPC Free Zone makes the process much more straightforward and can help speed up each stage, too. For more information about setting up your spare parts business in the UAE, reach out to us today.

Benefits of Starting a Spare Parts Business in the UAE

Entrepreneurs who set up a spare parts business in the UAE are in a better position to maximise their profits by leveraging a wide range of strategic, legislative and business-friendly advantages, including:

• Strategic location

The UAE boasts one of the most convenient locations for spare parts businesses in the world. Located in the heart of the Middle East, entrepreneurs have Asian, African and European markets at their fingertips. It’s also home to some of the world’s busiest seaports, and one of the busiest airports in the world. That offers up a rich pool of import and export opportunities.

• Highly developed manufacturing industry

The government has identified the manufacturing industry as one of the region’s most promising markets. Along with friendly government policies, manufacturing is also becoming more localised as supply chains and global value chains are regionalised.

• High demand

The UAE’s automotive market has recorded the highest demand in the past five years. This applies to all cars too, whether you’re looking for a run-around or luxury model. Many UAE car buyers are now willing to pay a premium for spare parts. Modifications and personalisation to cars are in high demand, too.

• Business-friendly incentives

In free zones like SPC Free Zone, you can benefit from 100% ownership, 100% repatriation of profits, zero paid-up capital and low corporate and income tax.

• High quality of life

Owning a lucrative spare parts business enables you to make the most of the UAE’s famously high living standards. From world-class restaurants and brilliant beaches to first-rate infrastructure and healthcare, entrepreneurs can live a life of luxury for a fraction of the cost of that in other highly-developed cities.

Spare Parts Business License Cost

The cost of a spare parts business license in the UAE is around AED 6,000.  However, you’ll need to price in other factors to the total cost, such as warehouse and facilities, logistics expenses, visas, legal fees and more.

SPC Free Zone offers some of the most affordable and comprehensive business setup packages in the UAE and its free zones. For a bespoke quote tailored to your specific business needs, reach out to us today.

Why work with SPC Free Zone?

SPC Free Zone offers fast, affordable and flexible business setup in the UAE. Conveniently located in the heart of Sharjah, SPC Free Zone is located just 15 minutes from Dubai International Airport and seven minutes from Sharjah International Airport. With immigration services on-site, business owners can get company documents issued within a day and a license issued in under two hours.

With SPC Free Zone, you can choose from over 1,500 business activities, get up to 20 visas under one license and select a dual-license option that offers both mainland and free zone on the same license. We can help you maximise your profits with low corporate and personal income tax, zero paid-up share capital and a whole host of more affordable setup packages.

Interested in learning more about setting up a spare parts business in the UAE? Get in touch with our friendly advisors today.

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