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Holiday home license in Dubai – 2020 detailed guide

Dubai’s holiday home and short-term lets rental industry – like that of many other global cities – was once entirely controlled by large hoteliers and corporations.

However, thanks to the rise of sites such as Airbnb and similar, this is no longer the case. Now, anyone who can afford just one potential rental property stands to make a significant income.

The industry is so potentially lucrative that Airbnb’s market share alone is estimated to generate over USD 101m in Dubai every year.

Properties listed on sites such as Airbnb often offer lower nightly rates than traditional hotels, making them hugely popular in expensive cities such as Dubai. So popular, in fact, that listings in the emirate recently increased by almost 70% year-on-year.

Here in Dubai, listing properties on sites such as Airbnb requires a license. The good news is, with the right support, it is simple to obtain this license, along with any other approvals and visas that you may require. Read on to find out how to get your holiday home license in Dubai.

 

How to get your holiday home license in Dubai

When you work with a company setup expert, the process of starting a holiday home business in Dubai doesn’t have to complex.

 

Step 1: Outline your business activities

When starting a UAE business, it’s vital that you clearly outline your business activities. Failure to do so can cause issues further down the line and carrying out unlicensed activities can lead to fines or even license revocation.

Your stated activities must be chosen from the official list published by the Dubai Department of Economic Development (DED). When starting holiday rental business, the official DED activity is ‘Vacation Homes Rental’.

This activity allows you to rent property to ‘…vacationers on a daily, weekly, monthly or annual basis.’

 

Step 2: Choosing your company name

The next step is equally important: choosing a company name. There are a few key things to keep in mind at this stage – many that would not apply anywhere else in the world.

Be aware that you must abide by a strict set of naming conventions. In short, you should avoid any offensive or blasphemous language. Avoid names of well-known organisations and avoid abbreviations if naming your company after yourself – i.e. Dave Mann Consulting, rather than D Mann Consulting. You must also check that your chosen name is available to register.

 

Step 3: Procedure to get your holiday home license

There are two steps to obtaining a holiday home license in Dubai. You must apply for the trade license itself, sometimes referred to as a tourism license.

When applying for this license, you will be required to submit:

  • Completed application form
  • Passport copy of the proposed owner or owners
  • Two colour passport size photos.
  • Details of your property

On top of this, you will also need approval from the Department of Tourism and Commerce Marketing (DTCM). Only when you have received your license and the DTCM approval are you permitted to trade.

All DTCM licensed properties must be registered and inspected at regular intervals to ensure they comply will all standards. You will also receive an official certificate of registration from the DTCM which must be displayed within your rental property.

 

Step 5: Making your visa applications
Finally, if you do not already have one, you will require a UAE visa in order to run a holiday homes business in Dubai.

Again, with the right guidance, the visa application process can be incredibly straightforward. Most company formation agents can help you with this step as well as with your license application.

As the holder of a UAE business license, you can also sponsor others for their visas too. This could be a spouse, parent or child, or a domestic worker, such as a housekeeper.

The maximum number of visas you can apply for will depend on the size of your company, your chosen setup and, for dependant visas, your personal earnings.

 

Cost of a holiday home license in Dubai

There are several costs involved in starting a holiday home business in Dubai. As well as the price of the license there is also the cost of DTCM approval.

There is also a separate permit fee which is calculated on the number of rooms for rent. For each room, or unit, that you offer for rent, you will be required to pay AED 300 per year, up to a total of AED 1,200. On top of this, there is a tourism fee of AED 10-15 per bedroom.

Of course, if you do not already have a property portfolio, you will also need to raise the capital to invest.
As there are so many factors involved, the best way to get an idea of the cost of starting a holiday home business in Dubai would be to meet with a company formation expert and outline your requirements.

 

Holiday home benefits

There are many benefits to letting out holiday homes here in Dubai. One if the biggest is the sheer size of the market. The emirate sees over 15m visitors to its shores every year.

And that’s not all. This number is set to increase. With Expo 2020 fast approaching, Dubai’s visitor numbers are expected to exceed 20m – all looking for high-quality affordable accommodation.

 

Are you ready to start your holiday home business in Dubai?

Hopefully this guide has made clear that if you’re armed with the right knowledge, setting up a holiday home business in Dubai doesn’t have to be overly complex.

That being said, it does require a level of prior knowledge of the process. What’s more, it is important to note that the application process is only straightforward if your license application is complete at the time of submission and free from errors.

To help you to ensure that this is the case, it’s a good idea to work with a company formation specialist such as Business Incorporation Zone (BIZ) when establishing a new company in the UAE.

We are a team of company registration professionals who are passionate about bringing the dreams of aspiring entrepreneurs and SMEs to life.

As well as handling your license application, BIZ can also assist with the opening of corporate bank accounts and advise on the most appropriate financial institution to suit your specific needs.

We also offer visa and immigration services and can handle all government formalities, permissions, work permits and visas applications that are required to trade in the UAE.

In short, our experts can establish your company on your behalf, make your license and visa applications, and take care of all the necessary admin – leaving you free to get on with running your business.

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