New UAE car rental regulations will require rental companies to install approved tracking devices, register vehicles on a unified electronic platform and use standardised rental agreements from January 1, 2027.
New UAE car rental rules from 2027
Car rental companies across the UAE will have to meet new licensing, vehicle tracking and registration requirements under executive regulations for Federal Law No. 14 of 2024 on the Regulation of Traffic.
The rules, which take effect on January 1, 2027, require businesses operating vehicle rental services to obtain a permit from the relevant licensing authority before starting operations.
The changes will also introduce an electronic system to help authorities monitor rental vehicles, track their geographical movements and record information about their rental activities.
Four requirements for car rental permits
Companies seeking permission to operate a vehicle rental business must meet four conditions:
Install a tracking device approved by the licensing authority in every vehicle offered for rental.
Register with the unified platform approved by the Ministry and the licensing authority.
Meet any additional requirements imposed by licensing or traffic enforcement authorities.
Hold a valid commercial licence for vehicle rental activities, issued by the relevant authority.
The rental permit will be valid for one calendar year and can be renewed for another year.
Electronic system to monitor rental vehicles
The regulations require the Ministry to develop an electronic system for registering vehicles owned by rental agencies.
The platform will allow authorities to monitor the geographical movements of registered vehicles and record data and information relating to their rental.
The system is expected to bring vehicle registration and rental records into a centralised digital process.
New responsibilities for UAE car rental companies
The regulations also set out five key obligations for licensed rental agencies.
Companies must verify that prospective customers hold valid driving licences before renting out vehicles.
They must also use the standardised rental agreement available through the vehicle rental system approved by the licensing authority. Each agreement must be registered with the authority through its approved electronic systems.
Rental agencies will only be allowed to conduct rental operations using vehicles registered in their own names and licensed for rental purposes.
The rules also prohibit rental companies from lending vehicles to other rental agencies unless the arrangement is covered by a rental agreement registered with the licensing authority.
An exception applies when vehicles are used by the agency’s own employees, subject to conditions set by the licensing authority.
The new requirements will come into force across the UAE on January 1, 2027.
tanvir@dubainewsweek.com
