Setting Up a Car Parts Business in Dubai?

September 22, 2022

Done Right, Selling car Spare Parts in UAE can Prove to be a Lot Profitable

The meteoric rise of the metropolis that Dubai is today was not as quick as one would think. It started its life as a sleepy fishing town and up until 1968, there were only 13 cars registered. Today, though, Dubai is one of the most significant players in the GCC and North Africa automotive industry. Today Dubai’s export and re-export have reached Dh 147.3 billion. Dubai is setting a five-year plan to increase foreign trade to 2 trillion and the automotive sector is the largest contributor to this plan.

Such robust growth and intense focus on the automotive sector mean there are many opportunities to explore the automotive sector. Spare parts businesses are turning out to be gold mines in generating revenues. UAE is the leading supplier of automotive spare parts for many surrounding countries. The UAE government helps the sector by charging zero surcharges on the auto accessories trade.

Specialized commercial zones are set up in Dubai that offers supporting tax systems, economical overheads and labour force, and an abundance of opportunities to do business commercially and abroad. Authorities tend to provide every help including special tariffs to initiate the localized production of OEM spare parts.

Automotive Spare Parts
Automotive Spare Parts

An abundance of Sources for Car Spare Parts

A good reason to start a spare parts business in UAE or Dubai is the abundant resources that are available to you. UAE government and authorities actively promote policies that encourage the import of auto vehicles and auto parts at reduced tariffs to help the automotive industry flourish. Following are some of the main sources from where you can obtain the spare parts from.

Local Auto Auctions

One of the easiest and most comprehensive ways to obtain spare parts is to purchase salvage or accidental vehicle and break it for spare parts. Multiple auctions are going on in all Emirates all the time that provide salvage vehicles that can be used for spares and repairs.

Copart is the leading seller of used and salvaged vehicles. Selling over 2 million vehicles every year and operating over 170 facilities across the world, Copart has hundreds of salvaged vehicles to choose from. Marhaba auctions and Emirates auctions also prove to be excellent sources to find salvaged vehicles

Imports From Abroad

Not only you can import a vehicle from abroad into Dubai but it is a very smooth process as well. This is perhaps a reason that the UAE is one of the largest importers of used vehicles from the US. A large quantity of used and reconditioned vehicles come from Japan and Korea as well.

The only consideration that you should look out for is that according to the new regulations, you are not allowed to flip a vehicle that is tagged as salvage in UAE. This decision was taken by health and safety laws as salvage vehicles pose a threat to their passengers and other road users.

Online Scrape Car Buying

IT is revolutionizing the way businesses are being run and conducted and it is helping in locating salvage vehicles from all the Emirates in UAE. The process of this method is quite comprehensive and easy to practice.

In case you had an accident somewhere in the UAE. You call your insurer to provide them with the details of the collision and then either contact the salvage car buyers online or over the phone and they collect your vehicle and provide you with a comprehensive amount. Those scrap car buyers can be reached to buy vehicles for spares.

Tap into a Profitable Business

We can see that there are plenty of ways for you to acquire vehicles at reasonable prices and kick-start your business of used and reconditioned spare parts. There is never a shortage of salvage vehicles in UAE and you can easily find them. It is up to you how you capitalize on them and make the best use of the deal that you have in hand. 

Where Can You Sell Used and Reconditioned Parts

UAE has established itself as the strongest market to provide used and reconditioned spare parts not only domestically but within the GCC region and Africa as well. Traders in those regions know and depend on UAE resources to provide a wide range of spares for their booming spare parts markets. Not only you can sell the parts within the UAE Emirates but you can tap into the huge potential that other regions offer.

Many used and reconditioned parts sellers are testing the waters online as well as this is the most convenient way to find and purchase spare parts. A relevant example in this regard is Partfinder UAE. You can register with them once you have completed their checks and balances and once you are part of their network, you can showcase your whole stock that is visible to millions of people who visit the website whenever they are in need. Not only do you get valuable exposure to so many potential customers but you also get to understand the demand pattern of spare parts and their current asking price. People from abroad such as in the GCC region and Africa can also take a look at your stock and prices and place orders as they fancy.

Used or Reconditioned Spare Parts
Used or Reconditioned Spare Parts

Step-by-Step Procedure for Starting a Spare Parts Company in UAE

Starting any new business is both exciting and nerve-wracking, and a helping hand at those desperate times can go a long way. Below we are going to provide a step-by-step procedural guide to help you set up the spare parts company in UAE.

You can choose to start your business in two main jurisdictions. You can apply to start your business on either mainland where you can open the business anywhere in Dubai or UAE or you can opt to set up your business in the Free Zone. You get to have 100% ownership of your business when in the Free Zone.

List the Type of Business Activity You Would Like to Start

Certain legal authorities should be notified about the nature of your business activity and you must be crystal clear about the procedures and requirements. For example, you must specify if you are going to provide spare parts physically or if you would incorporate an online store with 24/7 customer services. Make a precise and comprehensive list to be presented to the legal authority.

Decide and Register a Business Name

You must decide on a name for your business as the first step to getting your business registered and must meet certain requirements such as the name should be unique and should not infringe with other business titles. The name should not be related to any religion or should not offend any religious sentiments.

Choose Business Location Wiseley

Choosing a business location can make a huge difference and determine the fate of your business. Choosing a location in the free zone would mean you own 100% of your business and deciding to start a business on the mainland would mean that an Emirati would own 51% of your shares. The UAE government is facilitating foreign investors and encouraging them to start auto manufacturing businesses in the free trade zone. This would create opportunities for the spare parts businesses to grow.  Whatever location you choose, make sure that you have frequent and good transport access, customer accessibility, customer footfall, and so on.

Apply for a Pre-Approval Certificate

Submit all the required documents and obtain a pre-approval certificate from the relevant authority which would be beneficial in acquiring approval from other governing bodies too.

Obtain a Trade License

There are two main types of trade licenses professional and commercial. It depends on the nature of your services or your business activity and what kind of trade license fits better. A trade license is compulsory to provide legal cover to your company in Dubai.

Apply for Necessary Visas for Business Operation

When setting up your business, you may require to move your family, employees, experts, or your business partner to UAE. For this purpose, you may require to get the visa process going. First of all, you apply for an entry permit, you get your status adjustment, you are told to clear your medical tests, your Emirates ID registration is completed and then the visa is stamped.

What Documents are Required to Set up Auto Spare Parts Business in UAE

Certain documents are compulsory to be produced in front of the authorities in the UAE. You have to produce passport copies of all business partners and owners of the intended company. Acquire a registration application form, pay the fee for the initial approval certificate and attach the receipt, if you are a resident in Dubai and are working then you would require to provide NOC from your employer. Provide office lease agreements and MOA and partnership agreements.

To set up an auto spare parts trading business you require trading licenses and the cost of the license could be anywhere between AED 10000 to AED 40000 depending on the size and investment and nature of the business.

Partfinder UAE is the Best Place to Find Used Parts

It’s not easy to find the right salvage car at the right price and finding used or reconditioned spare parts from dealers or sellers can be tricky as well. However, one way to bypass this problem is to find a reputable and trusted source online that you can rely upon to find you best prices on all used and reconditioned parts of all makes and models.

We have over 20 years of experience and manage one of the largest networks of used and reconditioned spare parts dealers. You can find plenty of spare parts and can compare the prices right there which could save you some valuable money. All you do is, provide the make, model, and part details that you require and our sellers send you a no-obligation quote so you can decide according to your specifications and budget. you can resell the parts at a good profit. Businesses are dependent on the state of the economy of the country they operate within. Dubai has a rapidly expanding economy that provides plenty of opportunities to help turn your business into a source of high income. Foreign investors are taking advantage of favorable policies by the authorities and the latest marketing technologies to push the envelope constantly. This is high time that an investment should be made in this lucrative business. A surge in the economic activities within UAE is evident after the inactivity during the Covid19. This is the high time when you should invest in a proven and profitable business.