The AED 65 Million Question: Can You Still Get a Car Trading License in Dubai?

The AED 65 Million Showroom Question

Spend a few minutes browsing online property listings in Dubai and you will quickly find something striking.

Automotive showrooms along major commercial corridors, particularly on Sheikh Zayed Road and in other well known automotive districts, are being marketed for extraordinary prices. In some cases, listings exceed AED 60 million for a single showroom.

For investors and entrepreneurs attracted to Dubai’s thriving automotive trade, the opportunity can appear compelling. The emirate has long been one of the region’s largest markets for vehicle trading, and second-hand car dealerships remain a major component of the retail automotive ecosystem.

But behind the glossy listings and impressive valuations lies a question that investors often overlook:

Can the business license actually be issued or renewed?

In recent months, industry participants have quietly begun asking this question with increasing urgency.

A Market That May Be Entering a New Phase

Dubai’s automotive retail sector may soon experience one of its most significant structural shifts in decades.

Authorities have announced plans for the Dubai Auto Market, a major new development expected to transform the way vehicles are traded in the emirate.

The project is reported to span more than 22 million square feet, potentially housing over 1,500 automotive showrooms and related businesses within a single integrated marketplace. Developed in collaboration with DP World, the initiative aims to consolidate automotive trading infrastructure and create one of the world’s largest dedicated vehicle marketplaces.

If realised at the scale envisioned, the project could reshape how automotive businesses operate in Dubai.

And whenever large scale infrastructure projects emerge, markets often begin adjusting long before the ribbon is cut.

When Licensing Becomes the Real Asset

In many industries, investors focus primarily on physical assets, property, inventory, location, or brand.

But in regulated sectors, the true asset is often the license itself.

For automotive traders operating in mainland Dubai, a second hand vehicle trading license issued by the Department of Economy and Tourism (DET) is required in order to legally operate a dealership.

Without that license, a showroom is simply a building.

With it, the property becomes a functioning business.

This distinction becomes particularly important when investors are purchasing existing showrooms or acquiring businesses with the expectation that licensing can continue uninterrupted.

The Due Diligence Gap Many Investors Miss

In practice, many investors assume that because a dealership has historically operated in a particular location, licensing will automatically continue.

That assumption can be dangerous.

Licensing frameworks evolve. Zoning policies change. Sector specific regulations can shift as governments modernise industries or introduce new strategic developments.

When this happens, the renewal or issuance of certain business activities may become subject to new conditions, location requirements, or administrative review processes.

This is why licensing due diligence is just as important as financial due diligence when acquiring regulated businesses.

Before committing tens of millions of dirhams to an automotive showroom, investors should be asking several critical questions:

• Is the specific activity, such as second-hand vehicle trading, still permitted in that location?
• Are new licenses currently being issued for that activity?
• Can existing licenses get routinely renewed without restrictions?
• Will there be any upcoming regulatory changes affecting the sector?
• Any strategic developments that may influence future licensing decisions?

Without verifying these factors, buyers risk acquiring assets that cannot legally operate as intended.

The Rising Stakes of Automotive Investments

Dubai’s automotive sector has historically thrived because of its openness to trade, strong logistics infrastructure, and regional connectivity.

Thousands of businesses operate across vehicle trading, re-export, dealership sales, and related automotive services.

However, as the sector grows and evolves, regulators inevitably adapt policies to manage market development, infrastructure planning, and industry organisation.

Large scale projects such as the Dubai Auto Market illustrate how the emirate continues to modernise commercial sectors in line with long term economic planning.

For investors, the lesson is simple:

Markets evolve, and licensing frameworks evolve with them.

Why Legal Due Diligence Is No Longer Optional

In an environment where individual showrooms may command prices exceeding AED 60 million, regulatory oversight can no longer be treated as a secondary consideration.

Before purchasing an automotive dealership or showroom in Dubai, investors should conduct comprehensive legal and regulatory checks including:

• Verification of current licensing status
• Confirmation of renewal eligibility
• Regulatory authority approvals
• Zoning and location compliance
• Business activity permissions
• Sector specific licensing conditions

These checks may appear procedural, but they can determine whether an investment functions as a business or remains simply a piece of commercial real estate.

Dubai’s Automotive Future

The UAE continues to invest heavily in infrastructure, logistics, and commercial ecosystems designed to support global trade.

The development of large scale projects like the Dubai Auto Market reflects the country’s ambition to strengthen its position as a regional hub for automotive commerce.

For investors, entrepreneurs, and automotive traders, these developments present opportunities, but also underscore the importance of careful legal planning and due diligence before entering the market.

How Al Kabban & Associates Can Assist

Al Kabban & Associates advises investors and businesses on regulatory compliance, licensing matters, and commercial due diligence across a wide range of industries in the UAE.

Our services include:

• Business licensing advisory
• Commercial due diligence for acquisitions
• Regulatory compliance analysis
• Corporate structuring and business setup
• Strategic advisory for regulated industries

For guidance regarding automotive dealership licensing or investment due diligence in Dubai, contact us at +971 4 453 9090 or visit www.alkabban.com. You can also follow us on social media for more updates on everything law related in the UAE: @Alkabban_Law

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