About Auto Spare Parts & Components Trading License

Dubai thrives as a global trade hub, extending its reach far beyond luxury goods and tourism. The Emirate’s strategic location and booming automotive industry have fuelled a thriving market for auto spare parts and components, presenting lucrative opportunity for ambitious entrepreneurs like you.

According to statistics, the UAE’s auto parts sector is expected to grow at a compound annual growth rate (CAGR) of 7.5% over 2021-2025. This growth is fuelled by the city’s ever-expanding resident population, a surge in car ownership, and a rising preference for premium vehicles.

An Auto Spare Parts and Components Trading License allows you to capitalize on this dynamic market by legally importing, exporting, and trading a wide range of auto parts and components.

Ready to become a key player in Dubai’s automotive industry? Here’s everything you need to know.

A Closer Look:

Activities Components Trading License

Activities You Can Do Under an Auto Spare Parts & Components Trading License

An auto spare parts & components trading license in Dubai allows a company to engage in a wide range of trading activities. These activities may include:

  • Reselling spare parts for motor vehicles, buses, trucks, and trailers.
  • Providing products essential for repairing and maintaining vehicles, such as oils, detergents, and paints.
Benefits Of Auto Spare Parts

Benefits Of Auto Spare Parts & Components Trading

Setting up an auto spare parts & components trading company gives businesses access to a host of benefits:

  • Versatility: With this license, you can engage in the trading of a wide range of auto spare parts and components, catering to various vehicle types and models.
  • Market Demand: The automotive industry is consistently in demand, providing a stable market for spare parts and components.
  • Revenue Potential: Selling auto spare parts and components can be profitable, especially if you can source quality products at competitive prices.
  • Diverse Customer Base: Auto spare parts and components are needed by individual vehicle owners, automotive repair shops, fleet management companies, and other businesses in the automotive industry, providing diverse customer base.
  • Networking Opportunities: Engaging in auto spare parts trading can help you build connections with manufacturers, distributors, retailers, and other stakeholders in the automotive industry, facilitating business growth and opportunities.

How To Get an Auto Spare Parts & Components Trading License:

Here are some steps to obtaining an auto spare parts & components trading license.

Auto Spare Parts
  • Choose a legal structure for your business. You can set up your business as sole proprietorship, a partnership, a limited liability company (LLC), a Free Zone company (FZCO) or a branch of a foreign company.
  • Choosing the right freezone for your business activity is very important. It is crucial to determine the specific trading activities to define the business scope and then select the right freezone.
  • Select a trade name. It is important to ensure that your business name should not be offensive or violate any trademarks or intellectual property rights and must comply with the guidelines set by the Department of Economy and Tourism (DET). An initial approval will be required from DET, after which you can reserve your trade name.
  • Prepare and sign the Memorandum of Association (MOA). If you are setting up an LLC, you will need to prepare and sign the MOA.
  • Obtain necessary approvals and licenses. Depending on your business activities, you may need to obtain additional approvals and licenses from various government authorities.
  • Obtain the General Trading license. Once you have completed all the above steps, you can apply for the General Trading license from the DET.
Trading License

What Are the Documents Needed for An Auto Spare Parts & Components Trading License?

Here are some documents that one might need:

  • Application form: A completed application form from the Department of Economy and Tourism (DET).
  • Passport copies: Passport copies of all shareholders, managers, and directors of the company.
  • UAE residence visa copies: Copies of UAE residence visas of all shareholders, managers, and directors of the company.
  • Emirates ID copies: Copies of Emirates IDs of all shareholders, managers, and directors of the company.
  • No-Objection Certificate (NOC): A No-Objection Certificate from the sponsor or current employer of the UAE resident shareholders, managers, and directors (depending on the jurisdiction).
  • Memorandum of Association (MOA): The MOA is a legal document that outlines the company’s objectives and the responsibilities of its shareholders. It must be signed by all shareholders and notarized by a public notary in Dubai.
  • Trade name reservation certificate: A certificate proving that the trade name of the company has been approved and reserved by the DET.
  • Lease agreement: A copy of the lease agreement for the office space where the company will operate from.
  • Bank reference letter: A reference letter from the bank stating the shareholders’ financial standing.
  • Business plan: A detailed business plan outlining the nature of the company’s activities and how it plans to generate revenue.

How can IFZA help?

IFZA creates easy access for companies to establish their business and enables Dubai as a global hub to drive future growth of the economy as well as attract investment.

IFZA Dubai provides fast and easy Free Zone company establishment with world class access to global markets.

IFZA provide numerous Free Zone company establishment benefits such as:

  • 100% ownership of commercial enterprises
  • 100% repatriation of capital and profit
  • Low taxes
  • No physical presence of the business owners is required during the company set up(incorporation) process
  • No mandatory office requirement under 4 visa allocation
  • All processes executed remotely (except medical test and Emirates ID biometrics)
  • IFZA offers a multicultural and multilingual team who can advise on business activities
  • It offers transparent and competitive pricing
  • Professional and Commercial activities can be combined under one IFZA license
  • IFZA offers a competitive General Trading License
  • IFZA does not publicly disclose shareholders of licensed companies
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Frequently asked questions

01. Is selling spare parts a good business?

Yes, selling auto spare parts in Dubai can be highly profitable due to the high market demand. The revenue you make will ultimately depend on various factors like competition, stock management and customer satisfaction.

02. How can I market spare parts?

If you are looking to reach a wider audience, then advertising online will be your best bet. You can also connect with local businesses to learn how you can collaborate. Let them know about your business by attending trade shows, meetings or even events that organized by the government.

03. Are car parts always needed?

There is undoubtedly a high demand for auto spare part across the UAE, Dubai in particular.

04. How do I sell more auto parts?

Some quick ways to improve sales would be implementing an online strategy, putting your business on google maps, using social media, paying for ads, offering good process and even introducing special deals.
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